The single currency is forcing its members further apart and cannot survive in its current form, new analysis shows.
The Eurozone is doomed and cannot survive in its current form, regardless of what happens to Greece, a major new study shows.
New research demonstrates that members of the single European currency are becoming more economically divergent, making a single rate of interest increasingly unsuitable for the bloc. Political, social and cultural differences will also make it increasingly hard for the euro members to share a currency. Eventually, the Eurozone will have to either “integrate or disintegrate”, the analysis says. The research, by economic consultants from the ECU Group, is part of Change, or Go, a wide-ranging study of Britain’s European Union membership and future prospects.
The study is being serialised in The Telegraph at the start of a potentially decisive week for the EU and its currency, with Greece once again facing a potential exit from the Eurozone. However, the report concludes that whether or not Greece is forced out of the single currency, the Eurozone will still face deep-seated problems that must be resolved by either breaking up or full-blown political integration.
When the single currency was created in 1999, its advocates argued that common economic rules would help its members converge economically, making a single rate of interest more and more suitable to all. However, analysis by the ECU Group for the Change or Go report shows that the opposite has happened: the countries using the euro have diverged economically, experiencing shifts in supply and demand at different times and under different circumstances.