Advocates of sound money often advocate a gold standard, or at least a hard currency backed by some other stable specie, because currency established by fiat is particularly prone to political manipulation. However, Jerry L. Jordan, senior fellow of Atlas Network and the Sound Money Project, argues that the competing spheres of political influence that exist throughout the governments of Europe combine to give the euro a stability that is often lacking in national currencies.
“Some close observers of political and economic developments in Europe — notably, Jesus Huerta de Soto — argue that the political pressures for essential economic reforms are already resulting in actions by governments to liberalize labor and environmental laws and to restructure tax systems,” Jordan wrote.
When a fiat, monopoly currency is subject to only a single national regime, it is far more vulnerable to lopsided political maneuvering than the euro, which “is faced with numerous parliaments and ministries of finance, diverse tax systems, and public appetites for income redistribution that range from very generous to much more parsimonious.”
Jordan suggests that the 2015 European elections may well amount to “referendums on the euro,” determining which nations are willing to subject themselves to the fiscal discipline of a currency they cannot singlehandedly control.