Europe's problem isn't the euro, but the failed fiscal policies of its political class.
Since Greece's troubles came to light last summer, the Keynesian chorus has sung that the country could devalue its way out of its fiscal mess if only it had its own currency. There is a better way. Estonia, Lithuania and Latvia are case studies in how to solve a budget crisis without succumbing to the siren song of devaluation.
Last week, amid the ongoing euro panic, the European Commission accepted Estonia's application to join the single-currency bloc. Estonia has a debt-to-GDP ratio of 7.2%—smaller than the annual budget deficits of Ireland, Spain, France and Portugal, to say nothing of Greece.
