It would be sad to think that, after 17 years, this remains its most notable achievement, yet it is hard to ignore that reality. What began as a means of forging greater union among EU member states, enhancing economic, social and political ties of former wartime combatants, has instead fostered ever greater divisions among Europe’s nation states.
It was also meant to spur greater economic growth among those states using the currency but, as figures released over the weekend show, this is still not happening.
Economic growth in the eurozone halved in the second quarter of this year as France ground to a halt. The EU’s statistics agency Eurostat said gross domestic product in the 19-country single currency bloc rose 0.3% quarter-on-quarter in the April-June period, slowing from the 0.6% growth in the first quarter of the year.
Another benefit forecast in 1999 was that eurozone states would enjoy greater prosperity over those outside the single currency. Again, this has not happened. Unemployment within the single currency area is now an average of 10% and much higher in some eurozone countries than others. Contrast this with the UK where it only half that figure and Denmark where it is in the region of six per cent.
The same goes for youth unemployment which is more than 20% within the eurozone, an appalling figure.
While it would probably be too economically ruinous to scrap the euro altogether, its enormous failures need to be recognised and steps taken to at least mitigate some of its worst effects.
A currency that was meant to unite Europe has ended up dividing it into two opposing camps of debtor and creditor. It also has helped to create huge inequalities. Germany, for instance, has a €200 billion annual surplus while the rest of the eurozone has a collective defecit of the same amount.
In a timely new book, The Euro: How A Common Currency Threatens The Future of Europe, Joseph E. Stiglitz, the economist and Nobel laureate, argues that the euro is a failed experiment and the single most important explanation for the very poor performance of eurozone economies since the financial crisis began in 2008.
While he acknowledges that it is probably too late to scrap the currency, Stiglitz argues that the only way of fixing the current crisis is through a combination of tax policies to deal with inequalities, the European Central Bank to focus on unemployment and banking union with deposit insurance.
He was right 17 years ago when he argued that instead of helping economic convergence the creation of the euro would have the opposite affect. The chances are he is equally correct now.
One thing’s for sure, muddling along with a combination of German-led austerity will not work and could result in more EU member states voting to leave the union.