While holding the eurozone together will be costly and difficult and painful for the politicians, breaking it up will be even more costly and more difficult.
Our future begins on January 1 1999. The euro is Europe's key to the 21st century. The era of solo national fiscal and economic policy is over.
It is obvious that the monetary union among 17 very different European countries does not work. As an economist, I know that the Eurozone is not an optimum currency area, as defined in economic theory.
There is a proposal to divide the currency zone into a north and a south euro. There is also the idea of setting up a core monetary union in the middle of Europe. I disapprove of these debates. Instead, we should devote all of our efforts to supplementing the monetary union with a political union.
A single currency means a single government, and that single government would be the government whose policies determined every aspect of economic life.
But sovereign debt is a wider question not only in Europe but across the globe. While every country is a unique case, I think it's not an issue of countries acting on their own. We need a more coordinated strategy not only in Europe but around the world.
The euro is good for Europe. But only if there is flexibility all around.
The European Union that emerges from the Eurozone crisis is going to be a very different body. It will be transformed perhaps beyond recognition by the measures needed to save the Eurozone.
