Global News Journal
Beyond the World news headlines
If the financial crisis looks bad, I for one am thinking it might have been even worse — in the euro zone at least — had European countries not decided to pool their economies together by launching the single European currency.
I covered Europe in the 1980s from Belgium and Luxembourg when the idea of a single currency was still the pipe dream of a few old men who back in the 1950s had been inspired by the idea of a united Europe emerging from the rubble of World War Two.
Then in the 1990s, I was based in Paris when France and Germany, the powerhouse duo of European integration, struggled to align their economies in preparation for European monetary union. In a smaller version of what is happening now, huge volumes of money washed around Europe’s financial system, as currency dealers bet that the governments of Europe would never be able to pull it off.
The spending restraints needed to knock economies into shape were hugely unpopular, yet governments — mindful of the competitive devaluations of previous decades — stuck to them in the hope of better days ahead. I remember then Bank of France governor Jean-Claude Trichet patiently explaining to journalists the need for monetary union, so that individual countries were no longer vulnerable to a run on their currencies that would force up interest rates to suffocating levels.