Acton Institute Powerblog

The euro, Brussels, and the Russian bear

 

The government of Poland is part of the new surge of populism, openly defying the European Union on numerous policy fronts and rebuffing calls for an “ever-closer union.” So, why did its prime minister recently raise the possibility of adopting the euro? What is happening, and how should people of faith think about a single European currency? Are there moral issues at stake?

“Adoption of the common euro currency should be understood first and foremost as politics, and only then as economics,” writes Marcin Chmielowski, vice president of Poland’s Fundacja Wolności I Przedsiębiorczości (Freedom and Entrepreneurship Foundation), in a new essay for Acton’s Religion & Liberty Transatlantic website. Nations in Eastern and Central Europe find themselves squeezed between Brussels and the Russian Bear:

The euro is primarily a political project aiming at encouraging the alignment, and integration, of national governments. The Baltic states are a great example of this. Until recently Lithuania, Latvia, and Estonia used their own local currencies, which were inherently prone to speculative attacks because they operate in small markets. Russia still can’t get over the loss of the Baltic countries, and their membership in the EU and NATO is a thorn in its side. These circumstances demanded they create a strong bond with the West.

As both a political and an economic issue, adopting the euro is intimately tied up with moral questions, he writes:

Surely, we can think of economics as the value-free science postulated by Ludwig von Mises, but in political practice, economic decisions are – and always will be – based on prevailing morality.

Monetary policy that allows some states to go into debt and makes other countries pay for it is hardly moral. Sacrificing the economic interests of smaller states in order to save the club’s larger shareholders is morally dubious, as well. The eurozone, whose aim was supposed to be enhancing the process of harmonization of the whole continent, mostly generates controversies and tension between states. Taking the risk of entering the euro area when no member has yet exited could be seen as irresponsible.

You can read his full essay at Acton’s Religion & Liberty Transatlantic website.

(Photo credit: Public domain.)

 

Rev. Ben Johnson

Rev. Ben Johnson is Executive Editor of the Acton Institute's flagship journal Religion & Liberty and edits its transatlantic website.