Capitalist money often seems an innocent token for meeting people’s desires in markets, yet it is based on flimsy relations of debts-credits shared between financial sectors and governments. The global financial crisis (GFC) started in 2007 when UK and US global banks bankrupted each other and money nearly disappeared. Their governments acted, but mobile capital networks were extensive; European banks were in this with the others. Amidst capital withdrawals, panic and likely world recession, financial sectors’ attention shifted, hysterically, to the Euro and each member state. Long oblivious to consequences, their institutional petulance wreaked havoc on the main debtors, firms and households, while governments saved banks. Banks have not changed, we saw (Chapter 1), and took similar paths with the Euro crisis as with the Asian Financial Crisis (AFC) of 1997 (Chapter 2). The Euro, then ten years old, became the single (simplistic) focus, averting eyes from the same financial centres that created the AFC then GFC. Having sold debt for purposes with no lasting benefit, such as property bubbles, banks thereupon proclaimed ‘Europe’ as the alleged problem. Market players (banks, funds) panicked, desperate to recoup losses and pick over carcasses. This panic again demonstrated that market assumptions about money as a handy thing, a commodity for productive investment and exchange is one-sided. Money’s social relations involve unstable options. US banks sold packaged debt for bubbles. Afterwards, lurid stories, serious distress and blame-casting swirled about the European Union, as it had about Asia, the United States and the United Kingdom. What was this ‘thing’ called the Euro? This chapter deals with the social mechanisms of money behind the devastation for European member states: Soaring unemployment and suicide rates, foreclosures, industrial collapses and deflation. Huge benefits accrued to banks: Higher interest from member-states, higher debt values and bank bailouts, some of which were masked. Stepping back from the decade’s gloom, I compare the European Monetary Union (EMU) with the US, Australian and Canadian monetary federations. I include the United Kingdom, often taken to be a mono-state with full monetary sovereignty. In contrasting the EMU-Euro with old, messy, often terrible experiences of the US$, CAN$, AU$ and UK sterling, this chapter accepts fully Renate Mayntz’s account of the dearth of global governance and over-reliance on market ‘solutions’.
|Title of host publication||Critical junctures in mobile capital|
|Editors||Jocelyn Pixley, Helena Flam|
|Place of Publication||Cambridge|
|Publisher||Cambridge University Press|
|Number of pages||25|
|ISBN (Print)||9781107189515, 9781316639146|
|Publication status||Published - 2018|