The constraints that the Euro places on European policy described and decried by Paul Krugman (The Euro Trap, New York Times, April 30, 2010) are exactly the same as the constraints placed upon the regions and states of the United States by our acceptance of the US dollar as a common currency.
Without the dollar, Massachusetts could solve it's budget problems by devaluing its currency thereby reducing imports from other states and increasing exports to those states.
Alas other states would probably reciprocate or add tariff barriers thereby making both Massachusetts and the rest of the country less well off.
We should be glad that the Euro provides those constraints and hope that the unified currency will survive the current stresses and strains and survive, like the dollar, for many centuries.
Sent to New York Times