The eurozone : similitudes and differences with Keynes's plan

The eurozone is often considered to be the brainchild of Robert Mundell, who has often bragged about his paternity. In reality, the Eurozone setup, most specifically the TARGET2 settlement system, has several characteristics that look alike the plan for an international currency union that Keynes proposed in the early 1940s. The main objective of the paper is to show the similitudes and the differences between the Eurozone currency union and Keynes' Plan. The paper will also discuss some of the confusions that have arisen from the analysis of the TARGET2 system and the decision of the German constitutional court; and it will deal with the question of whether or not the European financial crisis of the GIIPS countries was akin to a balance-of-payments crisis as argued by some authors and denied by others.