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10th birthday of the euro is gloomy affair

EUROPE'S single currency marks its 10th anniversary this weekend, under increasing market pressure and with its future in serious doubt.

Unlike the launch on January 1, 2002, there is none of the fanfare and celebration that heralded one of the most ambitious developments in the common market's history.

Three years of an economic downturn on a scale no one anticipated have exposed the weaknesses of the currency.

Despite the downturn and the continuing attacks on the eurozone, supporters say the strength of the single currency has prevented an even worse fall-out from a crisis which began with the collapse of US bank Lehman Brothers in 2008.

But detractors say the "one-size-fits-all" economic policy and interest rate policy has hobbled eurozone nations from reacting to the crisis in their own best interests.

Critics say the euro has not been sufficiently well supported to prop up its weaker members as the crisis has bitten.



fragility

And rescue plans agreed during months of emergency EU summits are taking too long to be put into practice, they say.

Last year, when Greek finances were exposed as far worse than expected, the eurozone struggled not just to support the country with a large enough bail-out guarantee, but also to convince markets that the response was tough enough to demonstrate eurozone stability and credibility.

But one EU official insisted: "What has happened to these struggling eurozone members countries would have happened anyway: without the euro they would be much worse off."

On top of Ireland's own bail-out, Greece and Portugal have also needed help -- Greece twice.

Italy is now in difficulties and Spain's economic troubles have been hanging like a black cloud over the eurozone for more than a year.

European economic and monetary affairs commissioner Olli Rehn used the 10th anniversary landmark to declare: "Against the backdrop of today's economic fragility, this is an opportune moment to recall the fundamental principles on which the euro was built and bring about a return to a Europe of strength and opportunity."

hnews@herald.ie


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