Europe has averted disaster — for now — after German lawmakers approved a proposal Thursday to beef up a eurozone bailout fund. But still, with Greece, Spain, Italy, and other nations buckling under massive foreign debt and stumbling toward default, the European Union's two crowning achievements — its common currency, the euro, and the free movement of people across national borders — are suddenly in jeopardy. Some European leaders even fear that the crisis could tear apart the 27-nation European Union. Are things really that bad?
Yes. The EU as we know it might not survive: The euro really is in danger of failing, says Don Melvin for the Associated Press, and if it collapses, it could take the EU and the dream of European integration down with it. German Chancellor Angela Merkel and Poland's finance minister have both warned that the stakes are that high. "None of these officials is predicting the EU's demise. But it is a measure of the gravity of the situation that they are discussing the possibility at all."
"The European Union in crisis; Will it survive?"
Scrapping the euro might actually save the EU: Before the introduction of the common European currency, says Oliver Marc Hartwich at Business Spectator, Italy, for example, would have easily dealt with its debt crisis by devaluing its currency. But now it doesn't have that flexibility. It's time to go back to the pre-euro days when Europe had a common market but each country had "the freedom to find its own way." If scrapping the euro is what it takes to preserve the EU, it's a small price to pay.
"Wanted: A friendly EU breakup"
Hold on. Things aren't as bad as they seem: Greece's debt crisis "is eminently manageable if the right actions are taken," says International Monetary Fund economist Jorg Decressin, as quoted by Reuters. The country just has to push ahead with austerity measures to drastically reduce its deficit, which would trigger $11 billion in much-needed loans. The other debt-burdened countries are holding fast, too. "It's a crazy proposition to think about a break-up of the euro area" when Europe can still be saved.
"IMF says talk of euro zone break-up is 'crazy'"