Analysis: Is the euro beyond salvation? Politics not economics to decide
By Alan Wheatley, Global Economics Correspondent
LONDON (Reuters)- Here's a nightmare for Europe's leaders to ponder as they prepare for yet another summit to tackle the euro zone crisis: a bond auction fails in Spain, spreading solvency worries to Italy and beyond and triggering uncontrollable bank runs that spell the single currency's end.
Is such a scenario likely? Policymakers hope not. Is it possible? They fear it might be.
What is beyond dispute is that more and more economists and academics are asking whether the euro's problems are so deep-rooted that the currency is beyond salvation.
David Marsh, co-head of OMFIF, a forum for central banks and sovereign wealth funds, likened the 13-year-old euro to a child increasingly neglected by its parents.
"I don't really see what's going to hold the euro up. But it's difficult to tell the timing," he said.
If time is called on the euro one day, austerity fatigue could be the catalyst. Perhaps the new coalition government in Greece, now in its fifth year of recession, will throw up its hands and say ‘no more'.
Voters in countries that are more critical to the single currency's future could also tire of the belt-tightening demanded of them by the European Commission and the markets.
Former Italian prime minister Silvio Berlusconi, who still heads the country's main conservative party, has turned more skeptical since being ousted from power last November, saying on his Facebook page last week that "leaving the euro is not a blasphemy". Continued...