You expressed your views on whether or not the European single currency will survive, and what impact the currency’s collapse would have on the UK economy.
World financial markets have reacted favourably (if tepidly) to the news that pro-bailout parties in Greece have secured a narrow majority, and will form the next government in the economically troubled eurozone country.
Economists warn that both Greece and Europe are still very much in the danger zone, however, and that a Greek exit and/or a complete collapse of the European currency are still real possibilities.
Amidst the turmoil on the continent, we wanted to hear your views – will the euro survive the next decade?
- The largest proportion of participants argued that a few of the more troubled eurozone countries, particularly Greece, would leave the euro and return to their traditional currencies.
- Many of you argued that the euro would collapse completely, with all eurozone members returning to their original currencies over the next decade.
- A small proportion of participants said they thought the single currency would survive in its current form.
We also asked for your opinions on what impact the collapse of the single currency, if it were to happen,would have on the UK economy.
- The largest proportion of those who took part in the discussion thought that a euro collapse would be mostly bad for the UK economy.
- A smaller but still significant proportion of you argued that a collapse of the single currency would be bad for the UK economy in the short-term, but ultimately good in the long-term.
- And many of you also said that the impact of a euro collapse would be neither mostly good, nor mostly bad for the UK economy.
Tell us your view: will the euro survive?
What impact would a collapse of the euro have on the UK economy?
Q: Do you think the European currency as a whole will survive the next ten years, or will it collapse, with European countries returning to their old currencies?
Argument 1 - 'Troubled countries like Greece will leave the euro, but most will stay in the single currency'
- Those of you who took this view said that Greece and other southern European economies would be too much of a drag on the more prosperous northern countries, and therefore the two groups were likely to break apart.
“Although the single currency has been great for Germany and France some of the other countries have struggled, particularly Greece, Spain, Portugal and Ireland. I think that eventually these countries will have to leave the Euro because they just cannot be financed centrally any longer” Anon
“The stronger countries will get tired of propping up the weaker ones, and the austerity thrust upon the weaker countries will in the end be too much to bear and the citizens will end up insisting they leave so as to have more control over their own finances” Jed, Denbigh
“For the northern European countries the Euro does work, and would be even stronger with full federalisation. Weaker countries are like a millstone around the real wealth producers, such as Germany” Malcolm, Ipswich
“I think Greece will definitely go, possibly Spain, Portugal and maybe even Italy. I also think that some of the Eastern European countries that want to join the Euro may now think twice until everything is resolved” Anon
“The Northern European countries with stronger economies will survive, but the Southern Euro countries will go back to their original currency and rely on tourism for their growth because of the future exchange rates” George,Scotland
“Countries like Greece will leave the euro because of the fact they are bringing down the entire currency; they are almost being pushed out, and if they stay in they will cause all eurozone countries to go bust” Steven, Nottingham
- Participants who said that the euro would dissolve completely over the next decade, argued that it was doomed from the start, because it is impossible to have a functioning monetary union without political and economic union.
“It was formed it was formed on a false premise. Rules were set and only one country (Luxembourg) actually met the criteria. It is a political concept and not a realistic economical one without full political merger into one state – The United States of Europe. The people of Europe do not want this, so in the end it will fail” Andy, Berwick upon Tweed
“It was not introduced properly with the right controls, and a single fiscal control. It seems most unlikely that the people of the member states will agree to giving up their sovereignty to an unelected body where financial controls have never been proven, and the imbalances between the various economies will always provide dissent” Anon
“The eurozone cannot continue as it is. As everyone is saying, the only way for it to survive is full-on federalism; however, this would go against the will of the people and therefore shall not happen. As a result, the failing economies, such as Greece, will collapse forcing them to leave, or the euro will become so volatile that the Germans will leave removing the last pillar of support and it shall collapse” Alexander B, North Yorkshire
“The single currency was introduced at a time Europe was not ready for such a significant change. It was brought in too hastily, without a robust mechanism to allow for withdrawal. There are too many partners with diversely performing economies, and the stringent rules for membership were not adequately adhered to. Poor performing economies are now needing to be bailed out by the stronger ones, but this situation is unsustainable; you can't have a common monetary policy whilst allowing the sovereign nations to make political decisions that circumvent these” Gary, Cumbria
“The Euro was badly built on shaky foundations and, unsurprisingly, has begun to collapse at its first crisis. Now that the market has noticed that it's an unsound structure, it is unlikely that anything the EU does will serve to rehabilitate a fundamentally tainted brand. If the politicians insist on having a Euro, perhaps their next effort could be based on sound economic principles and not political dogma” Richard, Oxford
- A rather small proportion of those who took part thought that the European currency would survive as it is, with most arguing that EU members had too much invested in Euro to let it splinter and die.
“All countries involved have too much invested to let the Euro collapse. Although there is significant strain right now I think that is likely to pass” Anon
“Too many countries rely on the single currency to improve their economy and trade relations. Many also see it as a symbolic idea of a ‘Greater Europe’. Countries such as Germany really value the euro and I doubt they will ever leave it” Anon
“I believe the single currency will remain due to the fact that the governments are all fighting to keep it. I think the fear of the euro collapse is so scary to all countries in the euro zone, whether they use the single currency or not, that they will do all they can to save it” Anon
“It would cause more problems to get rid of it than it would to just keep it” Anon
“The Germans and French will realise they have to do everything in their power to maintain the Euro, as the alternative will probably signal apocalypse” Anon
“I think that people in charge will find a way to keep it afloat fuelled by a fear of the unknown. I also believe that many euro-related problems are exaggerated in the media, leading to a disproportionate amount of fear of a financial collapse on the part of the public” Leonie K, Brighton
Q: If the European single currency did collapse, do you think this would be mostly good or bad for the UK economy?
‘A collapse of the single currency would be mostly good for the UK economy’
- You said the UK and the eurozone are so closely linked economically that the turmoil caused by a collapse of the single currency would spread to the UK, including severely depressing demand for UK exports to the continent.
“It would give us an opportunity to pull out of the EU and sign an EFTA-style free trade deal. Better still, unilaterally declare free trade with the world without the burdens of regulation from Brussels. Allows us to have a better hand in trading with the BRICs, which is where world growth will come from. Europe won't provide that, due to low birth rates, inflexible labour markets, and a tendency to over-regulate within the EU customs union (not a free trade area) but a political union, created against the wishes of the European people” Anon
“If the Euro collapses, which it has to, it will take the dreadful EU with it. Britain could then once again trade freely with the rest of the world, therefore this country would boom again rather than being shackled by the EU” Anon
“In the short term, it would be bad for the UK economy. However, it would long term help the countries in the Eurozone and enable better trade. It may even collapse the free trade agreement which would greatly benefit the UK, as it would enable us to enter a Commonwealth trade agreement with rising countries such as India, instead of the EU, with which we have a trade deficit” Anon
“It would make us look more to the bigger emerging economies, as well as back to the commonwealth” Adam M, Birmingham
“Although 50 per cent of exports go to the EU, trade barriers discourage trade with developing nations. Collapse would equal short term disaster, long term gain” J Hartwell, Rugby
“Britain will not have to keep having to pump money into Europe for the failing economies of Spain and Greece. Britain will be able to compete with individual economies rather than the eurozone as a whole” Dee D, Yorkshire
‘A collapse of the single currency would be mostly bad for the UK economy’
- Those who took this view said that a breakup of the euro would leave the UK having to trade more with emerging economies, and Commonwealth nations.
“A complete collapse of the euro would be hugely damaging to the eurozone members. These countries make up a very significant proportion of our exports” Anon
“Despite the isolationist attitude of the UK, there are significant links between the EU and the UK. The fragmentation of the EU would toss us back more than 40 years. It would also have the ancillary result of entrenching the dysfunctional banking system for a further 40-50 years. That would seal in depression for at least another 15 years” Anon
“The collapse of the single currency would cause absolute chaos in the world markets and the ensuing mess would cost billions upon billions to sort out. International confidence in European markets would be shattered, which in turn would have an effect on the UK due to its proximity to the continent” George, Scotland
“It would lead to massive cuts to public services and higher unemployment, leading to an ever lessening ability to buy our exports upon which so many UK manufacturing jobs depend, detracting from our own ability to emerge from the recession the current government has misguided us into” Anon
“The eurozone is a massive export market for UK business; a eurozone collapse and resulting instability would be terrible for British business. Eurozone collapse would mean a massive banking crisis, which would affect British banks” Colin M, Newcastle
“Countries take time to settle into a new currency – until things stabilised, there could well be a lack of consumer confidence and, in places where the Euro is strong against the Sterling, purchase of British imports could drop” James M, London
Argument 3 - 'A collapse of the single currency would be neither mostly good, nor mostly bad for the UK economy'
- Participants of this view said there would mixed effects for the UK economy in terms of its trading prospects and the relative strength of the British Pound.
“It would be a mixture of good and bad effects. In the long term, the relative value of the pound against the newly formed currencies might be favourable for the British economy, but there may be other more immediate negative consequences. For example, Britain may have to write-off debts for countries that crash out of the euro” KW, Bath
“It's likely that the collapse of the Euro would have a negative effect on the UK economy, as we rely on European trade. However, it could make Sterling the most secure currency in Europe, which might be beneficial” Leonie K, Brighton
“Short-term, there would probably be significant problems due to our apparent obsession with trading within the EU – massive disruption within a major market can hardly fail to be bad for business. Long-term, the blow that a collapse would deal to the future of the EU project is likely to be an overall benefit to the UK, and might well encourage exporters to look further afield to more lucrative markets” Doug, Grampian
“There would be an initial adverse reaction by all economies, but allowing the single currency to collapse would permit each member to find its own economic level and reorganise from that point, eg; If the Greeks reintroduced the Drachma, its lower value would stimulate tourism and possibly some manufacturing industries, as long as the currency remained competitive” Howard, Wimborne
“There would of course be a negative effect in the short-run, due to so much of our trade being done within the common market. However, with German exports priced as they should be, Britain could become much more competitive in the long run which would be good for the British economy and its citizens” David, Worcestershire