"In the view of some, the homogeneity
of the Eurozone prevents troubled member states
from ever repaying their national debt. Europe
is a far too a heterogeneous geographical and
economic entity for each country to be in the
same monetary straitjacket
The euro is very practical, but it has created
millions of victims. Far better would be if
Europe were to move towards a system of state-produced
currency. The Euro has an insoluble problem.
Even if presently heavily indebted countries
do manage, by dint of severe austerity, to cut
public sector spending, their debts will very
predictably recur again (rather like a yo-yo
dieter). This is because these countries are
victims of a fundamental flaw in the Euro.
Even before it started economists warned that
a single currency could work only if all participating
countries were economically homogenous
the founding countries that signed up to Euro
agreed to cut their public debt to 60% of gross
national product (GNP) and their fiscal deficit
to below 3% of GNP on the basis that exceeding
these limits represented a threat to Euro stability.
(Note: since the banking crisis broke neither
target has been observed by anyone in the Eurozone).
Today 20 of the 27 EU member states cannot
meet these budgetary criteria
that the Euro will fail is one thing. But advocating
we all simply return to our previous currencies
is, in my view, a very bad solution. Certainly
we will need new national currencies, but if
we are to avoid past mistakes, we need that
new hard currency to be issued by each State.
To understand why State money is so important,
we must understand what money is and how it
works. Money is neither present in circulation,
nor managed by governments. Instead almost all
money existing today was put into circulation
by commercial banks. In fact, you have no money
to your bank account, just electronic digits.
These figures are a "monetary illusion".
Your bank statement mentions how much the banker
holds for you, but only a tiny fraction of that
money actually exists (this is known as fractional
It is this deception, run by
the banking system, which allows bankers permanently
to inflate the money stock, a very dangerous
move as our societies have now discovered.
The bankers have corrupted all the world's
currencies with secret accounting tricks. The
Euro is no exception. Today, less than 5% of
all the money is real money in the form of banknotes
and coins. The rest is artificially created
by banks and exists only as digits in a an electronic
The growing mass of money creates a situation
where everything can be bought, even the state.
In many countries financial groups have already
purchased utilities -- gas, electricity, water,
public transport, posts, telecommunications
- and converted them into continuous revenue
This is a continuous process. Bankers and the
financial elite are taking more and more investment
decisions that shape our society, and pushing
aside the state - which in turn is losing power
The Euro is a currency owned by the European
Central Bank (ECB) in Frankfurt. The ECB acts
as the central bank of participating countries.
Despite their names, which might suggest they
are state institutions (Deutsche Bundesbank,
Banque de France, etc.), these institutions
are all independent of government and mostly
run by private boards. Despite it position as
a private institution, the ECB is an official
organ of the European Union.
Through Article 7 of the European System of
Central Banks (ESCB) and section 107 of the
Maastricht Treaty, the ECB enjoys total independence.
Note that this independence does not come from
any organizational or logical necessity, it
is purely a result of the belief that only independent
central bankers are able to manage the money
system properly. Well, if we do not question
this belief today, when will we ever? ...
Most people think money is issued by the State.
That indeed is what should happen. Money should
belong to society and not the private bankers.
This is the only way to get a system of honest
money and a government that does not depend
We can end this expensive and dishonest system
by creating a state bank, which will be the
only bank authorized to create money in the
country. It will create the money needed for
loans to business and individuals and for advances
to governments for national budgets. As for
private bankers, they would be barred from creating
assets without having a corresponding amount
of hard cash reserve. If bankers wanted to,
they could operate as intermediaries between
the state bank and the public in offering credit.
For this they would receive a fee but not earn
interest. They would also manage customer accounts
in the name and on behalf of the state bank
Politicians try to scare people by claiming
that it would be extremely expensive to leave
the euro, it would put economic development
back by years and so on.
Well, for starters, when the present EU states
joined the euro and set up a new currency countries
did not stop trading! And if a country opted
now for state money, the costs would be primarily
organisational and relatively small compared
to the gains. All the money necessary for the
change could be created from nothing by the
state bank. All banknotes in circulation in
the country could be purchased by the state
bank by issuing new money. The euro could be
set aside as a strategic reserve or used to
pay for imports