James Forsyth James Forsyth

Whither the euro

The financial crisis has partially revived the euro debate. Eurosceptics think that it might bring the whole thing down while those who favour British entry believe that they have found a new argument for it.

To date, it has been the usual suspects making the case on either side. But today Simon Tilford and Philip Whyte of the Centre for European Reform, a pro-European think-tank run by Charles Grant, have a piece in The Guardian which is surprisingly bearish on the euro’s prospect. Here’s the key section:

“The credit crunch should test conclusively whether it is sustainable for countries to share a single currency outside a political union.

The financial markets seem to be sceptical. The difference (or “spread”) between the yields on German government bonds and those of many of the other member states have widened steadily over the course of 2008. In Greece’s case, the spread over German bunds is now almost a full percentage point, while in Italy it is 0.9

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