The Flaw

Every currency in history had rested on something. Behind the dollar stood the United States — a treasury that could tax, a government that could spend, a political community that could decide, in a crisis, to pool its resources and stand behind its money. The euro was different. It was a currency without a corresponding state. There was a central bank in Frankfurt but no European treasury, no shared budget of any real size, no common fiscal authority that could act on behalf of the whole. Seventeen governments shared a money while keeping their national finances separate.

Lordon sees this as the deepest structural problem, and it follows directly from the depoliticization project. A real fiscal union would have required real political union — a European democracy capable of taxing Germans to help Greeks, or borrowing collectively in everyone's name. That would have meant genuine transfers of sovereignty, debated and legitimated by voters. The euro's designers wanted the currency without the political community that a currency normally implies. They built the roof and skipped the foundation.

The test came in late 2009 and 2010. A new Greek government revealed that the country's deficits had been far larger than reported, and lenders reacted the way lenders do when they suddenly doubt they will be repaid: they demanded higher interest to keep holding Greek debt, then began refusing to hold it at all. Because Greece could not create euros, it had no way to reassure the market on its own. Borrowing costs spiraled. Within months the same fear had spread to Ireland, Portugal, Spain, and Italy — countries with very different problems, all sharing the same missing backstop.

This is the moment Lordon's argument had been building toward. The crisis was not simply the story of one country that had spent too much. It was the structural flaw revealing itself. A currency without a state had no automatic mechanism for defending its members when confidence collapsed. The European Central Bank was legally forbidden from directly bankrolling governments, and no shared treasury existed to spread the burden. What had been presented as prudent rules turned out to be, in a crisis, a set of locked doors.

Step back from the eurozone's particular troubles and Lordon's larger claim comes into focus: money creation is always a political question, and no amount of institutional design can make it otherwise. A currency is a promise held together by collective belief, and someone always decides how much of it exists, on what terms, and for whose benefit. To hand that decision to an independent central bank governed by fixed rules does not remove the decision — it assigns it. The euro did not prove that money can be depoliticized. It proved that the attempt to depoliticize money is one of the most consequential political decisions a society can make.

This reframes the whole debate about the single currency. The usual argument treats the euro as an engineering problem — get the rules right, add a bit more fiscal coordination, tighten the banking union, and the machine will run smoothly. Lordon's point is that no set of rules can be neutral, because every rule encodes a choice about who bears the cost of monetary stability. Keeping inflation low protects creditors and savers; it can come at the expense of workers and debtors. Prioritizing employment does the reverse. There is no view from nowhere. Choosing one mandate over another is taking a side.

The euro that arrived in wallets in 2002 was sold as a technical achievement, a piece of shared infrastructure that would put an end to the old currency squabbles of a divided continent. Lordon's reading is that it was something far more ambitious and far less honest: an attempt to run a currency without the political community that currencies normally rest on, and to disguise a profound choice about power as a neutral matter of sound management. The crisis that began in 2010 did not create that flaw. It merely forced it into the open, where it had been all along.