chapter  5
The bank, the states, and the market: an Austro-Hungarian tale for Euroland, 1867–1914
ByMarc Flandreau
Pages 31

The continent has finally embarked into monetary union. For years, the project has led to extensive debates among money doctors. In the Old World, some have recommended it as the only solution to avoid re-enacting Europe’s tragic twentiethcentury story, with its deadly cocktail of protection, lack of co-operation, and exchange rate instability. Many American doctors on the other hand have expressed their doubts. Europe, they emphasized, ‘is not an optimum currency area’ – a polite way to mean ‘It Ain’t Going to Work’. At any rate, all serious experts have unanimously concurred in their characteristically conservative style that ‘something new is coming’ (Dornbusch, Favero and Giavazzi 1998).