After two years of ineffective crisis management, the euro is terminally damaged. Europe’s common currency is dying a death of a thousand cuts. Slowing growth across the continent, increasing opposition to bailout packages in Germany, and rising resistance to austerity measures in periphery countries show the euro is in its endgame. The next shock could be fatal to monetary union.
In ordinary times, the resignation of the European Central Bank’s chief economist – along with the limits put on further rescue measures by Germany’s constitutional court, and the shift by Greek one-year bond yields to near the 100 per cent mark – would be serious. However, times are anything but ordinary. The staccato of crisis symptoms indicates that European monetary union is heading for a tipping point.
At the moment, it is hard to see which event will finally seal the euro’s fate. Nor is it clear which path Europe will take after the disintegration of the euro. The only certainty is this: In its current form, and with its current membership, the euro will be history within months.