“Every crisis is an opportunity.” That slogan is often invoked in times of economic distress, and Europe is no exception — especially the eurozone, where ruling politicians and economic elites saw the post-2008 crisis as a chance to further entrench two neoliberal nostrums into economic policy: the belief that public deficit spending can only do harm, and the belief that squeezing wages and “flexibilizing” labor markets were antidotes to stagnation.

In the late 1980s, when the European Commission launched the drive for a single currency with the slogan, “One Market, One Money,” one of the key arguments in favor of the project was that a single European currency would mean a single European interest rate.

More specifically, the argument was that since there would be no more competitive devaluations of national currencies, financial markets would no longer need to demand higher interest rates from economically weaker eurozone members that stood at greater risk of devaluation. Interest rates, which had always been substantially higher for countries like Italy, would converge and decline to the lower level of countries like Germany — those most trusted by financial markets. Thanks to the single currency, the cost of finance would go down, spurring investment, economic growth, and job creation across the eurozone.