Saturday, May 8, 2010

Euro Currency - The future of European Union's currency unity

There are some discussions in some European capitals about the future of Euro, the common currency which was welcomed by many but which also brought hardships on a large number of common citizens.
Like every new phenomenon Euro has had its advantages but it also entails some major problems which probably were never thought of earlier.

After the discontentment in Greece's civil life, and the speculatory rumours running around few other countries public debt, there are some people who are already predicting the end of Euro. However the real crisis has not hit the common man as yet and the matter is still mostly a financial one. If this becomes a major political issue and things get worse, there is a potential that a few European countries may opt out of Euro - the common currency, despite remaining with the Union for other purposes. Frankly if you ask a common European they are disgusted at the heavy administration cost of EU.
If that happens it will happen in bulk which means only 8 or 9 original European Union countries will remain in EURO deal and the rest may run away.
For now the matter is still not political. Once it goes to streets things will be radical. For now it looks unlikely because most Europeans prefer to drink or dance in place of wasting time on protests. Greeks are now directly affected but it is technically very difficult to undo political accords in modern Europe due to over dependence.

I do not think that there will be any default by any European country in near future. This is a test of European Economic Community or Union and this crisis would have resolved long ago if German executives in Berlin would not have waited for the elections. This selfish interest of Germans have been the cause of this crisis to become a critical one.

The chances that any North West European nation defaults on their debt is highly unlikely but even if that happens there would be solutions.
This is the ultimate test of the bureaucracy that surrounds the EU machinery. Something is not very right currently because when the economic times are bit testing, we come to know who is our real friend. This is something being discussed right now in Roma, Dublin, Madrid, Lisboa and Athens.

Belgium, the Netherlands, [BENELUX] France, Germany are the primary beneficiaries of the European union on economic front more than any other nation. Perhaps we can count here Italy.
While EU offers good political and practical solutions the excessive and expensive bureaucratic mountain that has amassed lately will eventually crumble the Union. I think if there is no immediate solution is found and the matter goes to public and streets there will be a few mini revolutions and we will have national currencies back with Lira, Peseta and Drachma.

From what I know this crisis could be resolved within next 2 months by 20th of July. I am more worried about the bigger crisis that may be more critical than this one, that is potentially cooking up in Asia.

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