Monday, October 10, 2011

How the euro became a broken dream

The euro, which created the world's largest trading power, was designed to link together the European nations for trade and political purposes. It was born amidst political and economic upheaval as Germany headed towards reunification - with the collapse of the Berlin Wall in 1989 - and communism disintegrated in Eastern Europe. The European Union was put in place after World War II, but as the economic winds shifted the drive to create a single economic and political bloc intensified.

The Treaty on European Union, known as the Treaty of Maastricht, was signed in the Netherlands city of Maastricht on February 7, 1992, before entering into force in 1993. It created the structure for a single currency, later named the euro, to be born. The currency's symbol was inspired by the Greek letter epsilon, with the notes and coins available by 2001. They were issued by the European Central Bank, which was based in Frankfurt to placate Germany's loss of its beloved Deutschmark.

But now the European dream -- which has the euro at its centre -- has been hobbled. Eurozone members, led by Germany, are being forced to bail out the weaker economies in a financial crisis which is threatening to drag the bloc into a recession and is reverberating across the globe. more