No more monopoly money for Europe

Via O Insurgente, No more monopoly money for Europe:

Eurozone members have only two options - both are simple but neither is easy. The first involves radical liberalisation, in particular labour-market liberalisation, to ensure that eurozone economies are flexible enough to respond to shocks. The second is to contemplate a eurozone breakup.

But there is an alternative to wholesale destruction of the eurozone: monetary competition. The euro should be made a competing common currency - as envisaged by the UK government in the 1990s - and not a monopoly single currency. The treaties should be amended to allow any eurozone government to make any other currency it wishes legal tender alongside the euro - including a new local currency, privately issued currencies, sterling or even the dollar. Germany, for example, may opt to keep the euro and only the euro. Ireland may opt to have sterling, a new punt and the euro all as legal tender. No country would be able to opt out of the euro but no country would be forced to have the euro as a single legal-tender currency.

The existence of competing currencies within the EU would ensure that pressure was kept on the ECB to ensure that the euro is a low-inflation currency. Under this plan, businesses could still use the euro, contracts could be written and settled in euro and so on - but contracts could also be written in new national currencies. Transactions costs would be kept low and trade within the EU would still be facilitated by the existence of a common currency. Currency competition and a common currency would replace monetary monopoly and a single currency.