Eurozone crisis: The euro is coming to an end

30 July 2012 – Die Welt (Berlin)

Draghi, Merkel, Hollande and Juncker may be fond of standing behind the euro in a demonstrative display of unity. It no longer makes sense, writes the Die Welt am Sonntag. Europe's differences are too big for a single currency.

Late in the past week it became clear that the politicians of Europe have overstepped the limits of their real power. The joint statement of President Hollande of France and Chancellor Merkel “to do everything it takes to protect the eurozone” was nothing more than an act of desperation.

Even in the third sentence of the explanation, after all, it became obvious just how much the individual countries of the eurozone, including Germany and France, differ in how they perceive the crisis. Everyone, it read, should “fulfil their commitments in their area of competence.” That could be interpreted as a capitulation: everyone now ought to look to how to get out of the mess on their own.

Centrifugal forces growing

The diplomacy around the ‘shared euro’ is in its last throes. Agreements exist still only on the surface. Massive centrifugal forces are at work below, and those forces are growing.

On one day ECB chief Draghiholds out the prospect of more help for bankrupt states, and the next day Finance Minister Schäuble quashes the commitment. Greece asks for more time, while new announcements come in every day about the shortcomings of the government in Athens and German politicians call openly for the country to be expelled from the eurozone.

A Spanish Minister for the EU talks not about the problems of his country, but prefers to clamour for more money from Germany. And, in any case, there is no consensus on the instruments, either – direct or indirect purchases of bonds, aid to banks or austerity programs.

The euro is dying in the South

The German government is in a minority position only on the ECB’s governing council. If one adds the EU members in the East, the situation looks quite different. Between North and South, a yawning gulf has opened up. It's just a matter of time until we’ll have to look deep into each other’s eyes and confess: it’s just not working out any more.

In the eleven years of the euro the economies in the North and South have not moved towards each other, but grown further apart. Under these conditions, a shared currency makes no sense.

Translated from the German by Anton Baer

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