Alan Brown: How the euro can be dissolved

HOW THE EURO CAN DISSOLVE

As the Irish bond crisis reignites the debate over the future of the euro, Schroders group CIO Alan Brown uses history to explain how a currency union can be dissolved.

Introduction There are entrenched views on both sides as to whether the euro can survive in its current form or not. On the continent, many regard speculation on the break up of the euro as Anglo Saxon shenanigans. And in the other camp, blind faith in the euro's stability is seen as a denial of economic realities. I want to step aside from that argument for a moment and instead want to consider what history can tell us about the dissolution of currency unions. First, there have been a surprising number of currency union dissolutions. Since the Second World War a total of 69 uni...