At last, Barroso has said it...

To my mind this whole 'common currency' idea clearly has advantages (for example it reduces transaction costs, and, assuming free movement of capital and labour, it would tend to shift capital and labour towards profitable areas/activities) and disadvantages.

Without speculating on what those disadvantages might be, it is clear that once a currency area reaches a certain (geographical) size [As Dearieme points out, it is political, economic or cultural 'diversity' that matters rather than surface area], they outweigh the advantages - if this were not the case, the whole world would be using the same currency (putting aside the fact that for centuries, the whole world had a common currency, it was called 'gold'). We also know that there have been countless currency unions in the past, most of which fell apart again

For analogy with 'common languages', see footnote*.

As to this whole common European currency idea, which has been bumbling along for decades, opponents have always said that it would simply not work without economic, and hence ultimately political union. The more outspoken proponents were saying the same thing as well, of course, but this was not, until now, the EU-fficial line.

So you will be horrified/pleased** to see in today's Metro that Barroso has finally come out and said this:

The European Union wants to crack down on 'irresponsible' government spending following the £638billion EU stabilisation mechanism. The plan, proposed by the EU's executive commission, calls for unprecedented scrutiny of countries' spending plans – even before they go to their national parliaments.

EU commission chief Jose Manuel Barroso said: 'You can't have a monetary union without an economic union and this is the absolute prerequisite for having monetary union.'

* By analogy, it must be clear that things would work better on a global level if we all spoke the same language, which is why the smaller languages are dying out and well over half the world's population now speaks just four languages, English (in all its variants); Spanish/Portuguese (which is more or less the same language AFAIAC); Arabic (and all its variants) or Chinese (in both its main variants).

Presumably, these language blocs are sufficiently big to gain most of the advantages, and the massive cultural resistance to further consolidation now outweighs any further gains that might accrue to a bloc which adopted English in favour of its own language. I can just about imagine English and Spanish/Portuguese merging over the next few centuries as well, and perhaps the Chinese and Arabs will adopt the Roman alphabet (like Turkey or Malaysia did; some Chinese language newspapers use the Roman alphabet etc), but hey.

** Delete according to whether you are an EU-sceptic or an EU-phile. Whether the spending cuts are a good idea or not is a separate debate, but let's not forget the huge financial burden that all the EU regulations place on domestic economies.