Step back from the current crisis to consider the long view, and currency unions — or even a single global currency — have a fair share of appeal. A universal medium of exchange could eliminate currency risk and jack up trade. It would mean speculators couldn’t short an individual country’s currency. Exporters wouldn’t have to fret over the gap between a price on a contract and the value of the payment. A single currency could halt spastic swings in prices and end conversion fees, leaving more of the pie for little stuff such as R&D and employee health insurance. Oh — and it could put an end to international disputes over currency manipulation. Hello? China?
True, sovereign currencies afford the ability to manipulate the money supply, jiggle the handle of interest rates, and buy up piles of toxic assets. When a boom goes bust, devaluing currency is the least bad way for governments to rein in wages and prices that are suddenly too high. But if you use the same currency as another country that isn’t in dire straits, good luck convincing them to accept devaluation.