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The issue of centralization is a red herring. That is not true, and his example shows it. Switzerland is decentralized, but has a single (somewhat) hard currency and they are doing fine. We know that what makes for economic growth is a combination of rule of law, liberty, and sound money. How large an area one government rules does not matter, if they rule lightly and honestly. Some areas were happy to join the Roman Empire, when it was well run. Later, when it became rapacious, some areas were happy to defect to the Germanic tribes.

Having a central government is not a problem, unless it is a large, domineering central government, such as that run by desk jockeys in Brussels eager to control everything, down to the curvature of bananas. They deal in fantasy, such that Greek Government Bonds were considered as good as gold on the banks books. This kind of government is always a burden on the population.

Taleb also screws up the part about money - Having the same currency, the euro, was a terrible idea. It encouraged everyone to borrow to the hilt."

What encouraged everyone to borrow to the hilt, was the fantastic idea that having a single currency also meant that there should be a single interest rate for the bonds of every government. Just because the pauper and the rich man, or the idler and the workaholic, both use dollars, does not make them equal risks.

Another encouragement for borrowing was that the EU allowed obscene levels of leverage for their banks and and let them hide it all off the books. Somebody thought it wise to lend to the PIIGS to let them build way beyond what they could sell.

Fantasy fades, and reality bites.

What I want to know, is who it was who proved that Greeks would repay their debts if only they had to do it in a hard currency? That man or woman is truly the most dangerous insane lunatic around.