Once upon a time the idea of a single European currency seemed so idyllic, so succinct, so palatable. One could freely cross borders without the ball-ache of loosing your hard-earned at a rogue Bureau De Change on a Costa Del Sol beach for a start. For countries who were part of the early European Union plan and those who followed suit, such as those from the Balkan states, there were mixed feelings of anxiety, distrust and uncertainty as to what it would bring. A loss of national identity, almost like the changing of a national flag was expressed. Why replace the Lira, Franc, Escudos or Pesetas with a currency many struggled to even pronounce? How would states remain independent if their national finances were being governed by folk sat at a round oak table in Brussels chaired by an overweight German in a suit? What if the Euro fluctuated in value due to varying economic climates? For Balkan countries, adopting a currency which could give them the banking muscle even close to that of Germany, France and the UK must have seemed like striking gold and a no-brainer. So why did the Euro story sour?. The first warning sign I noticed was when I visited Spain, France and Italy a few years ago. Food commodities had suddenly doubled in price. Overnight the average Italian could not afford their usual brand of pasta. The cost of bread also shot through the roof compared with when I had been in Europe a year before. Individual countries struggled with inflation and the push and pull on interest rates continued all in the quest to balance the Euro books. To maintain the Euro's value and keep it competitive on the global market all countries involved had to maintain financial growth and also be honest as to what was short and long debt wise. Greece didn't play this game. As their borrowing spiralled out of control they feared the implications of a lower credit rating which leads to the dreaded higher interest rate on borrowing and catapults debt. To be fair most countries in the European Union haven't balanced the books but with low job growth, rising unemployment and a slowdown in banking profits the Euro seems like it will take many more punches before it manages to outbox its way out of the economic downturn.
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