Friday, November 11, 2011

Is the euro tearing Europe apart? - 10th Nov 2011

When the euro became official tender 12 years ago, it was hailed as an economic and social savior, "the beginning of a strong European Union," according to the EU's top official at the time.

But now, in the middle of several economic crises, its effectiveness is coming into question.

"The euro was sold to Europeans by politicians as a brilliant way of integrating Europe more. The irony is that it has had exactly the opposite effect," said Harvard historian Niall Ferguson. "It is causing the disintegration of Europe."

There is considerable tension growing between two sets of nations in the eurozone. On one side are struggling countries, such as Greece and Italy, that are badly in need of economic rescue. On the other side are countries, such as France and Germany, that are funding bailouts and demanding tough austerity measures in return.

"Right now, things between the Germans and the Greeks, I don't think it's an exaggeration to say this is the worst it's been since Germany invaded Greece in 1940 in the war," said Clay Clemens, a professor of government at the College of William & Mary. Read More

"But a couple months ago, there were German politicians sort of saying well, if the Greeks don't have any money, they can lease some islands as collateral.