Will the Eurozone survive?

No . And the reason can be illustrated by this fact. A German worker retires 5 years later than a Greek worker. And Germans justifiably wonder why they should work longer to pay for Greeks (or Italian etc) life of leisure. The British were smart enough to know that spendthrift Greeks, Italians, Spanish and even French would ever emualate frugal Germans, which was the somewhat silly notion that inspired the Eurozone in the first place. You can dream all you want. Grownups who act like children are rarely redeemable.

With Spain, Italy, and. Greece about to drop out, no.

Yes. They’ll never learn their lesson. Pride.

I miss drachmas and francs.

@zensky Give them some time to study, my friend. After all, they have only had a few millennia to work on purging pride from its position as the architect of each nation-state’s policies toward its neighbors.

It will take some profound structural changes to make a common currency work. And if they fail to make it work, the resulting economic crisis will likely lead to another Great Depression.

I’d like to see Europe go back to what it was before the Euro. Tying all of the economies together just seems like a bad idea. @zensky Likewise, I lament the loss of the Lira Italiana.

They add countries on occasion, so I am sure they will kick some out when they mess up and don’t listen to sound economic advice, but the Eurozone will still be there.

I do NOT want to see Europe go back to how they were before the Euro and collective working to stop trade and travel barriers. Throwing the baby out with the bathwater is never a good idea and I detest ‘Pendulum Politics’. The EU and those countries involved have some hard decisions to make, yes, but they will be made through elections and referendums and not military might. What is important is that Germany does not feel compelled to drive tanks into Italy or Greece and vice versa. (oh, ye of short memories…)

I think it will survive but not in its present form. The crisis will either lead to closer economic integration or to disintegration with countries leaving to establish their own currencies. With economic growth stagnating or in decline people are going to have to accept reduced standards of living and this in turn may lead to political and social instability.

I thought it was a bad idea from the outset, and was glad that Switzerlind stayed out of it.

I’m not really sure why anyone is even saying the euro will disappear. Making more than a dozen countries – many of them large, powerful economies – backpedal is simply more complicated and more destabilizing than reform. Even if you thought the euro was a bad idea when it happened, there is little denying that it’s here now.

Now, could the eurozone shrink? Sure, Greece and perhaps some other PIIGS could leave. But I’m not sure that move is even unambiguously positive for Greece, a country that doesn’t have an impressive export economy (-> lesser reason to reason to use monetary policy to undercut competitors than an emerging Asian economy might have) and at least to some extent is dependent on tourism from richer EU countries. The British might cheerfully enjoy the good exchange rate, since they have to exchange no matter where they go, but the Germans and Dutch could just as easily take their euros to France or (for now) Italy.

@bolwerk: What do you mean by PIIGS?

I agree that it will probably shrink, but I couldn’t imagine it being undone altogether.

I’ll never forget what a French (from France) teacher of mine said once, that the EU is a ‘big fat Kinder with no prize inside.’

@bookish1: Portugal, Italy, Ireland, Greece, Spain.

Basically the countries that caused the most trouble.

@bolwerk: Thank you. Just never heard that abbreviation before.

The real question is:

How will wealthy nations deal with the debt crisis?

This affects the US and the UK too. People in the US and the UK love the euro survival debate because it’s a great way to distract their fellow countrymen and women from the huge problems in their own countries. The UK is basically an economic monoculture with financial services and little else. Innovation is reduced to financial innovation. The US seems to become a defunct country with a waging war on science and political stalemates. The debt problem is as bad as the one in Europe.

The euro will stay. Even the Greek people prefer it.

In meantime I read the whole Economist article. In part it relies on another urban myth: the rise of Asia leading to Europe’s doom. What the author of the article forgets to mention is that the overall worldwide pie is getting bigger. The increased wealth in Asia leads to an increased demand for products and services. Innovation in Europe will continue and good ideas will lead to new products and services. The only thing that changes is that European countries will no longer be twice as wealthy than the most successful Asian countries. Being equally wealthy still means wealth as such. With the Earth’s limited resources it doesn’t make sense to have more than what we need anyway. So relax. A richer Asia is also good for Europe and America.