Euro relationships under strain

Yesterday the Spanish parliament voted in favour of €15 billion of austerity measures – but by just one vote.  European finance ministers last week agreed that tougher sanctions were needed for member states who are slow to bring government deficits back under control – in order to prevent the Greek financial crisis from spreading.

The single European currency is effectively an inter-country relational experiment.  For 60 years the EU (helped greatly by NATO) has succeeded in its goal of making war inconceivable among the member states.  However, the decision to form a monetary union in the 1990s has been pushing countries towards ever closer political union – far beyond what the founders such as Schuman envisioned.    

When member states gave up their independent currencies a decade ago, they were placing immense trust in other Eurozone governments to keep spending in check.  The present crisis exposes differences in values between member states over financial prudence and puts to the test the strength of the relationship binding them to a common currency.  It’s time to count the cost: what price must be paid for the Eurozone to hold together, both financially and in terms of handing over more political and economic independence to an emerging European government?