Jump to fiscal union

If the quantum leap to fiscal union is not possible, then the opposite alternative - the collapse of the single currency - is very real. Until recently, the idea that the euro area seemed to fall apart something from science fiction. But now it is being discussed quite seriously and it says a lot about the dynamics in the euro area. The collapse can happen in two ways. The first - poor countries such as Greece, have decided that life outside the monetary union will be easier and better. If production continues to fall, not only this year but next year, while unemployment will rise, political pressures in the country could reach a critical point. As a result, the country will come out of the Eurozone. Second choice: Germany and some other solvent countries such as Holland, will decide to create for themselves a new currency. According to David Marsh, an economist, studies the history of the euro, Germany faces a difficult choice: to remain part of Europe, or continue driving to their cherished dream - the monetary and financial stability. But he does not believe that Germany would prefer to disengage. The political class in the country retains a clear pro-European attitude. The ruling party is proud that a European party, the opposition parties support the decisions, such as the introduction of Eurobonds. In addition, politicians have repeatedly rescued from Greece default (although its economy is responsible for only 2.5% of total euro area GDP), clearly horrified at the thought of to what damage will the collapse of the Union. Barry Eichengreen, a historian in the field of monetary policy from the University of California, believes that the economic cost of disintegration is so high that it can not afford to not only Europe but also worldwide. If otkoletsya Greece, we are waiting for a repetition of the Depression of the 1930s with a complete collapse of the financial system. If Germany will be released from the euro area, export-oriented economy will not sustain the impact of the sharp rise of the new currency. The rest of the damage is difficult to estimate because it will depend on the unpredictable actions of markets and the public. For example, the withdrawal of Greece could provoke "bank runs" in the other peripheral countries.