The euro institutionalized a gold standard, removing devaluation as a national adjustment tool.

Evidence

The euro, the successor to the Exchange Rate Mechanism, would become a one-time internal fix of all the different European currencies in exchange for a single external floating currency, with one important difference. Rather than pegging and retaining national currencies and printing presses, after the fix the national currencies would be abolished and the printing presses would be handed over to the Germans to make sure that neither inflation nor devaluation of the currency would ever again be options. Instead, armed with a new independent central bank that had only one goal, to keep inflation around 2 percent, regardless of the output and employment costs, via control of interest rates, prices and wages would automatically adjust to the external balance. In other words, they built a gold standard in a democracy, again. — Mark Blyth, Austerity, 216

Categorization

• DEFINE: Explains the structural logic of the euro: handing over monetary sovereignty to an inflation-only central bank so that adjustment happens through internal wages/prices rather than exchange rates.
• XREF: Directly feeds Mattei’s account of austerity as the only remaining adjustment tool once currency devaluation is foreclosed; internal devaluation is the austerity mechanism. — connects to: Leaving the gold standard and sharing adjustment costs ended Swedish austerity. — Mark Blyth, Austerity: The History of a Dangerous…, 524; The euro is effectively a gold standard with no way off. — Mark Blyth, Austerity: The History of a Dangerous…, 496; The euro removed devaluation escape valves, trapping Italy with rising debt and stagnant growth — Mark Blyth, Austerity: The History of a Dangerous…, 196 (+4 more)

Broader Connections

• Gold standard currencies had fixed parities and central banks limited issuance to gold reserves #expands (0.85) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 64
• The gold standard naturalized austerity by removing it from political dispute #corroborates (0.80) — Clara E. Mattei, The Capital Order, 1302
• The gold standard rigidly subordinated domestic welfare policies to fixed exchange rates #corroborates (0.80) — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 414
• Devaluation and revaluation simply shift the fixed CFA-euro parity #complicates (0.75) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 122