歐元

A PSEUDO SOLUTION TO THE CENTRAL FAILING OF A CURRENCY

It was in Calabria, on New Year's Day 2004, that it came home to me that southern Europe was set for serious trouble with the euro. Walking round the village to work off the excesses of the night before, I noticed that all the prices had been raised by 10 per cent. Why? Because it was January 1, silly. But in Germany they were not raising prices at all.

I had always supposed that the euro would hold together because the misery of unravelling it seemed likely to exceed the pain of soldiering on. But when both partners in a marriage seriously question the arrangement, divorce is only a matter of time. This is a marriage with 16 partners and domestic violence is hotting up.

Piecemeal defection for any weak country is dangerous, unpredictable and costly. Germany could do it unilaterally, but the political damage to the European Union would be immense. Better for all concerned to revisit the project and rectify the mistakes made in the first place.

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