Europe’s Unfinished Currency

Europe’s Unfinished Currency

The Political Economics of the Euro

By Thomas Mayer

Anthem Finance

Anthem European Studies

The Economic and Monetary Union (EMU) of the European Union is a unique historical experiment, as no monetary union of sovereign states has survived to date. This book explores how it could work, and develops scenarios of how things might evolve in case of failure.



October 2012

£15.99, $21.56

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About This Book

For more information please see the book website:


The euro was originally seen as another stepping stone to a politically unified Europe. Yet with the fall of the Berlin Wall, the disintegration of the Soviet Union and the unification of Germany, the need for European political union as a means to ensure peace in Europe disappeared. Due to the fading will for full political union, the euro project lost the prospect of a stable platform in the foreseeable future. As a result, the euro crisis forces policymakers to develop a new architecture for EMU. ‘Europe’s Unfinished Currency’ proposes that this can only be done by way of a currency union of sovereign states, which in itself is a unique historical experiment as no such union has ever survived to date. This volume offers ideas of how the EMU could potentially work, and sketches scenarios of how things might evolve in case of failure.  

Key Insights:

*Outlines the origins of the euro within the quest for the unification of Europe. 

*Explains the historical failures of past monetary unions, including the Latin and Scandinavian currency unions, the US dollar standard and the Austro-Hungarian union. 

*Posits that the European Central Bank in cooperation with a European Monetary Fund should act as the lender of last resort to all systemically important borrowers, including governments, to safeguard price stability.

*Proposes a new EMU architecture, which includes the creation of a European Monetary Fund.

*Discusses possible mutations of the EMU in case of failure.


‘Thomas Mayer, who was until recently the chief economist at Deutsche Bank Group, is both a strong defender and critic of the single currency. He insists that the repairs so far proposed for the euro do not yet add up to a comprehensive strategy for reinforcing the currency’s foundations. He puts forward his own remedy [...] [He has] produced analyses and conclusions written with a clear eye.’ —Stewart Fleming, ‘European Voice’

‘This first-rate book offers a thorough historical review of the euro and an insightful analysis of its current predicament. I highly recommend it’ —Bill Hayes, New York Society of Security Analysts

‘Mayer goes into detail on how to fix Europe’s economic woes and, having a track record in warning of recent crises before they happened, has advice on how to structure the EMU to avert future failures.’ —‘Nexus Magazine’

‘A stimulating read, Dr Mayer’s book combines a concise historical narrative of the events leading up to the euro with an imaginative suggested new architecture for the EMU. Particularly interesting are his insights on how a breakup, should it occur, would evolve.’ —Alan Greenspan, former Chairman of the Federal Reserve Board

‘Thomas Mayer was years ahead in predicting Europe's economic and very political crisis. Now, he blazes a trail to stability, a path that leads to the politics and union of nineteenth-century America. This is a time of essays and short sound bites. 'Europe's Unfinished Currency' is a concise, crafted book that should be the template for all seeking the new political economics of Europe.’ —Tom Keene, Editor-at-Large, Bloomberg News

‘Thomas Mayer’s new book is an important intellectual contribution to the most pressing political and economic debate in contemporary Europe. Some of his suggestions are no doubt controversial, but he has provided a coherent argument in a discussion that will profoundly change the European unification process as we know it.’ —Henning Meyer, Senior Visiting Fellow, London School of Economics and Political Science

‘This is absorbing, incisive and intellectually stimulating book. It is an essential reading for those who wish to understand the inner workings, politics and practical solutions to the issues with the eurozone. It makes transparent all the upcoming challenges the European integration will face. Ignore it all your peril.’ —Jason Manolopoulos, author of ‘Greece’s Odious Debt’

‘This fascinating and well-written book couldn't be more timely. With the discussion on the eurozone's future institutional framework in full swing, Thomas Mayer's book provides highly relevant economic insights and political perspectives on the debate over how to make the European Monetary Union more stable and sustainable.’ —Axel Weber, UBS Chairman, former head of Germany's central bank

‘Well organized, thorough, and replete with historical facts, this work explores the political and economic roots of the European Monetary Union and, most importantly, makes realistic suggestions for solving the current sovereign debt crisis and achieving greater stability in the long term.’ —Theo Waigel, former German Minister of Finance

‘Thomas Mayer has written a fascinating and thought-provoking book on the origin, performance and problems of the euro area. He questions much of the conventional wisdom about these topics, and proposes novel solutions that run counter to the historically prevailing view that currency union can only survive within a “political union” of the eurozone.’ —Leszek Balcerowicz, Former Deputy Prime Minister, Finance Minister and President of the National Bank of Poland

‘Anyone wishing to make informed commentary on the gathering troubles of the euro is well-advised to read Europe’s Unfinished Currency by Thomas Mayer. The book covers the historical circumstances that produced the euro out of a regional cooperation seeking to end centuries of intra-European conflict, then provides a balanced treatment of the current financial instability. Whatever one’s political view of the “European project”, this book is an essential reference.’ —John Weeks, Professor Emeritus, School of Oriental and African Studies, University of London

Author Information

Thomas Mayer is Senior Fellow at the Center of Financial Studies at Goethe University Frankfurt and Senior Advisor to Deutsche Bank’s management and key clients. From 2010 to 2012 he was Chief Economist of Deutsche Bank Group and Head of Deutsche Bank Research. He has previously held positions at Goldman Sachs and the International Monetary Fund.


Anthem Finance

Anthem European Studies

Table of Contents

List of Charts, Tables and Textboxes; Introduction; 1. A Question of War and Peace; 2. No Longer a Question of War and Peace; 3. A History of Failures; 4. The Euro’s Happy Childhood and Its Abrupt End; 5. A Crisis of Legitimacy; 6. A (Hidden) Balance-of-Payments Crisis; 7. Forward or Backward?; 8. In Search of a Lender of Last Resort; 9. The Politics of Euro Rescue; 10. A New Foundation for EMU; 11. Summary and Conclusions; Acknowledgements; Notes; Index


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