Is this the end of the road for the euro? That’s the question asked by one of Germany’s leading economists who serves as an adviser to the government. Hans-Werner Sinn writes: ‘It is hard to see a clear path forward. Some argue for still more debt socialisation and risk sharing at the European level. Others warn that this would push Europe into an even deeper quagmire of financial irresponsibility. …. The euro’s third decade will decide its fate.’ He comments that sociologist Ralf Dahrendorf was right to conclude: “The currency union is a grave error, a quixotic, reckless and misguided goal, that will not unite but break up Europe.”
At present Portugal, Spain and Greece are all governed by radical socialists who have abandoned the “austerity policy”; and Italy intends to increase the country’s debt substantially to pay for tax cuts and a guaranteed-income scheme. All of these four countries’ manufacturing sectors are still way below 2007 levels of competitiveness and their youth unemployment is shockingly high.
The euro was launched as an accounting currency on 1 January 1999 and as a cash currency on 1 January 2002, assuming both 12 am. Both charts indicate a Saturnine period in late 2021/2022. Which doesn’t mean an end of times but it does suggest there will be a harsh dose of reality.
The 1999 chart has a T Square of Mars opposition Saturn square a financial Venus which has been under pressure since 2017 and worsening in 2021 to 2023 as tr Pluto is conjunct the Venus and square Saturn. The Solar Arc Mars squares Uranus in early 2021 for a mighty crash of sorts and high insecurity; and the Solar Arc MC is square Saturn in late 2021/early 2022.
The 2002 chart has a fractious Mutable T Square of Pluto opposition Saturn square Mars, which has been muddling through heavy doses of Neptune since 2015, worsening drastically this year and next as tr Neptune is conjunct the Mars and square Pluto. With the Solar Arc Saturn conjunct the midheaven in early 2022.
Germany’s Target 2 surplus with the European Central Bank is about to tip 1 trillion euros – in Sinn’s words it is “unsecured credit against the euro system, which cannot be called in and which debtor countries pay no interest on.” The prospect of the possibility of it going up in smoke is not surprisingly causing deep unrest in Germany .
Hi Marjorie, I am French and I just wanted to write, in response to one of your comments, that I don’t know one French person around me who wants to go back to the Franc…..that’s why Marine Le Pen had to drop the idea during her campaign in the end, because it simply isn’t a popular idea here….of course there’s always a nutter here or there…especially in the small villages, for example in Alsace where I come from, where people (outside Strasbourg/Mulhouse/Colmar) vote Front National. I grew up in FN stronghold and I ve never heard someone seriously suggest leaving the euro, outside from the crazy guy at the village cafe or some members of municipal council in this or that “commune” who might take the idea seriously.
Thanks for your posts xxx
I didn’t mean they’d seriously consider the expense and complexity of it just that they are still rankled down here at least at losing the franc. Macron admitted if there was a Frexit referendum it might well go against the EU.
In my personal opinion the Euro is the biggest problem for the EU, way more important than Brexit or any other issue. In fact I would hazard a guess that even though the UK is not a Eurozone member it would probably have voted Leave in 2016 if the Euro did not exist. The currency was not even required as a medium of international European trade as the US dollar would have done just as well and is still used to trade oil and gas The danger for the Germans is they could end up holding a lot of worthless IOUs.
Apologies that should read tge UK would not have voted Leave if the Euro had not exis ted.
Letting Countries like Italy and Greece devalue their currency could be a kindness. The Germans would suffer as their exports would be far more expensive. The value of the Euro has made German exports cheaper than they otherwise would have been, benefiting Germans but not helping Southern Europe. It was a political ideal, not a fiscally sound move.
What is the alternative? Return to francs, pfennigs, and lira? That would partition, separate, and isolate the EU countries even more than now, would it not?
A return to ECU style system preceeding euro in the 1990’s or Federalism enabling EU to have a larger say on financial politics. Federalism obviously doesn’t seem likely now, but then again, how much of what has happened in the past 5 years seemed likely in 2011?
Obviously, if Brexit will be as messy as it seems, it will definitely boost popularity of euro among Europeans. It seems to increase popularity of EU already.
Respectfully Solaia the Brexit mess isn’t going to help the health of the euro or sort out the north-south imbalance. About the only sensible thing Gordon Brown did was keep the UK out of the euro.
The French government would hate it but believe me most French I speak to would go back to their beloved franc like a shot. Ditto liras, deutschmarks etc. V expensive exercise if it did come to that.
I’ve heard-tell that many proprietaires continue to provide rent receipts using francs. Just in case…