The future of the European currency is challenged. The euro, which appeared as a result of the political decision, has only several years left to live. Many European officials believe that the continent needs to return to national currencies against the background of the ongoing economic crisis. However, the euro may collapse for economic reasons too, no matter how strange it may seem to sound nowadays.
Jim Rogers, the president of Rogers Holdings, stated two months ago that the euro would last for 15 or 20 years. He emphasized that no other currency similar to that of the European Union had ever had a significant life expectancy. The governments of many European countries, Rogers said, blame the euro for many financial problems that they have to face at the moment.
The governments of the EU member-countries will either decide to pull out from the euro zone or will ask for abatements from Brussels, he added. It is worthy of note that Rogers already predicted Russia’s collapse into several independent states.
Nobel Prize winner, a professor with the University of Chicago, Milton Friedman, sticks to the same opinion. He also believes that the joint European currency will become history in 5-15 years. Such large European countries as Germany, France and Italy will soon find that the creation of the euro zone was a mistake, Friedman believes. There are considerable political discrepancies inside this zone, which will eventually result in the collapse of the system. The only thing that can save the system is the creation of the unified state between the United States and Europe, the economist believes.
The establishment of the joint European state against the background of unsuccessful attempts to ratify the European Constitution seems to be absolutely unreal. Weak members of the euro zone will inevitably pull the leaders to the bottom.
The current economic crisis has weakened the European currency against its major rival, the US dollar, which has not died contrary to all forecasts. The dollar has gained 24 percent against the euro since the middle of 2008. Euro lost 4.4 percent of its value during 2008 and then became 8.4 percent cheaper in January 2009.
George Soros said during the recent forum in Davos that the euro may not survive the current crisis if the EU does not take adequate measures to relieve European banks of toxic assets. The EU does not even think about establishing a bad bank. Quite on the contrary, European banks continue to conceal the information about their problems, which may lead to unpredictable consequences in the future. The European Central Bank, which is responsible for the euro zone, is a supernational structure, which makes only recommendatory decisions.
"People look at the U.S. as a failed state led by a clown, and either laugh at American citizens or pity them," regrets the American Historian Peter Kuznick