Can a Single Currency Ever Work?

Posted by Allison on 20 July 2012, 06:46

If you look back to 1919 you will find another example of a European single currency, not unlike the one many European countries are locked into at the moment. The one in place back then was the krone, and it was used by more than a dozen countries including Austria, Italy and Hungary. This particular currency union lasted a good few years but ended up disintegrating after the First World War came to an end.

The details of that particular currency union do not matter. What matters here is that it came to an end, just as many other attempted unions have come to an end at one point or another. The question everyone is asking now is whether the European Union and the Euro will also come to an end, perhaps in 2012 or perhaps in the future.

Many will say the current events are a sure sign that it is falling apart. Certainly, the countries that have got into severe financial troubles are getting bigger by the day. First the likes of Greece and Ireland were troubled; now there are huge question marks over Italy and Spain. Which countries will fall apart next?

Euro lovers would say this is a mere blip in the long history of the Euro. But are they right? Perhaps this is merely the protracted end of the single currency as we know it. Many have pointed out that Greece’s decision to stay in the Euro could come at huge cost. The phrase ‘pouring money into a black hole’ has come up more than once. Is it really worth spending more and more money we don’t have to try and keep a vain attempt at European unity afloat?

Politicians are eager to keep their project together at all costs. The people who live in these countries are less convinced this is a good path to choose. Vanity lies at the bottom of this unity just as it has lain at the bottom of many others in the past. But will the outcome be the same?