Friday 24 November 2017

Colm McCarthy: The eurozone is still at risk and we need to get our house in order

There would be no saving the currency union if Spain or Italy were forced to leave, writes Colm McCarthy

The odds on the eurozone's survival as a viable currency union, without a few small peripheral adherents, were always high: who needs Greece, Portugal, or indeed Ireland?

Dropping Spain, or more importantly Italy, is a very different matter. If either country were forced to leave and to reinvent a national currency, the credibility of the ill-starred monetary union would be undermined and it is unlikely that it could survive.

If one goes, the other can hardly survive in the markets and the next domino could be France rather than some expendable small country. Failure to keep Spain and Italy on board has been characterised as an existential issue for the common currency project, and there is, for once, no exaggeration involved. The game is up if either goes.

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