Is the Eurozone ‘irreversible’?

Mario Draghi, the President of the European Central Bank, has said that the euro is “irreversible” and has promised that "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough." Of course as a leader of the Eurozone he has to sound upbeat and give positive noises about the willingness of the bank to provide a backstop to failing countries as his words can move the markets.

However the very fact that Draghi has to argue that the ECB will do whatever it can to preserve the euro shows how deep the crisis it; central banks really should not be worrying about whether their currency will survive. However while Draghi may be able to do enough to save the euro as a currency it is much more questionable whether he will be able to keep it intact with all of the current members of the zone. Spain’s interest rates are at an unsustainable 7% and Italy’s are not far behind. Many are worried that Europe is ‘sleepwalking to disaster’ and there is ‘one domino falling after another’. The ratings agencies are now worried enough that they are threatening even Germany with cuts in its credit rating.

And crisis in the Eurozone is bad news for its neighbours such as Eastern Europe and the UK as well; a think tank has classified seventeen economies as being at “extreme risk’ from a worsening Eurozone crisis. It is surely still possible for the Eurozone to survive but it is becoming ever more difficult as more countries are added to the bailout list. Something radical one way or the other will need to be done.

So do you think the Eurozone is ‘irreversible’?

Debatabase debate: This House would abolish the single European currency

http://idebate.org/debatabase/debates/politics-economics/house-would-abolish-single-european-currency

http://www.guardian.co.uk/business/2012/jul/26/euro-irreversible-mario-draghi-ecb

http://uk.reuters.com/article/2012/07/25/uk-eurozone-exposure-idUKLNE86O00520120725

http://www.thisismoney.co.uk/money/news/article-2178622/Euro-doomed-warn-experts-eurozone-sleepwalks-disaster.html?ito=feeds-newsxml