Cracks in Europe’s shared currency reappear in virus crisis

Associated Press ^ | April 6, 2020 | David McHugh

[Olog-hai]

The virus outbreak is exposing cracks in the foundation of Europe’s 21-year-old shared currency and festering animosities among its members, even as governments struggle to come up with a unified response where success or failure could mark the continent’s politics for years to come.

Divisions between north and south, unhealed wounds from the 2010-2015 debt crisis and enforced budget austerity, as well as the lack of a powerful central treasury are haunting governments as they try to find a way to keep the economy afloat without blowing up national coffers.

Finance ministers from the 19 countries that use the euro will debate the issue in a teleconference Tuesday, following up on a conference two weeks ago that broke up without a strong signal of solidarity. A key point of dispute was the proposal by Italy, France, Spain and six other countries for a one-time plan to borrow together to ensure favorable terms and avoid trouble down the road for individual member countries. The so-called frugal four to the north however — Germany, Finland, Austria and the Netherlands — balked. […]

The regional divisions over the bonds loosely follow a fault line from the debt crisis, in which indebted countries largely in southern Europe appealed for help. They got it, but under tough conditions — usually punishing levels of government budget cuts that resulted in lower pensions, salaries and growth.

That formula of help with strings attached created popular resentment and was based on the principle that bailing out bad behavior without corrective action only encourages more bad behavior. Northern European countries fear their taxpayers will be put on the hook for mismanagement elsewhere. Yet economists and analysts say the current crisis is different, since the virus is not the fault of any member country. …

[PAR35]

Former Fascist countries vs Former Nazi countries.

[montag813]

Will the damned Euro EVER go back below 1.0? The last time I was in Europe under $1 was 2000, when it was like 0.80 and every restaurant was as cheap as McDonalds. I want to visit Europe one more time before the Islamic takeover, but want to do it on the cheap.

[Billthedrill]

Despite all the talk, under stress the EU reverts to nations looking out for their own interests first.

[dfwgator]

Same thing happens with the States in this country, as it should be.

[catnipman]

the stronger richer countries better help the weaker poorer countries from spiraling into a terminal depression, or those countries will be forced to exit the EU, thereby finally blowing it up permanently ...