If the British vote for Brexit, the European Union will be reaping what it has sown.
In 1992, Denmark voted against the Maastricht Treaty, which established the possibility of creating a common European currency. In France's referendum on the same issue, only 51.1 percent voted in favour.
What if Europe’s leaders had listened to the doubts of their citizens and ditched the Maastricht Treaty?
The euro enabled countries to borrow more cheaply than they ever could have done without access to the ECB’s cheap financing. But this wasn’t a good thing.
It allowed Belgium, Greece and Italy to postpone necessary public sector reforms. As a result, the public sector and the public debt burden were allowed to grow even bigger.
It led to property bubbles and massive private debt in Ireland and Spain, which forced both countries to beg for a bailout. It led to transfers between countries, through the bailout funds and the ECB, and between taxpayers and banks. For example in Greece, the banks were able to dump a large part of their exposure on to eurozone taxpayers.
The common currency threatens the EU
The conditions linked to those transfers, in the form of a Troika or a Memorandum of Understanding, evoked a lot of anger in those countries forced to comply with the conditions.
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