Euro Blues?

• Author: BUSH, JANET

The euro's future is on shaky ground.

No sooner had one crunch point for the euro passed, than another, far more worrisome one sailed into view. On the September night that Denmark shocked the European Union establishment to the core by voting against membership in the euro-zone--but far more pertinently against the entire process of European political integration--a commentator from German radio was interviewed, a grainy photograph of Berlin's totemic Brandenburg Gate behind him.

He talked sternly about what might happen in his country in "one and a quarter year's time." It was not obvious, at first, to what he was referring. But then it became clear. He was warning that, before euro notes and coins become legal tender for ordinary people in January, 2002, the German people may decide that they do not want to give up their beloved Deutsche mark.

Even to British ears, attuned over years to the tones of euro-skepticism, this was stunning. It has been evident for months that the German people were becoming seriously disenchanted with the euro. Opinion polls before its launch in January, 1999, had shown that Germans were opposed to adopting the single currency by two to one but, in the absence of an offer of a referendum, they had reluctantly followed the lead of Chancellor Helmut Kohl (now badly tainted by a political funding scandal), who told them that the euro was the price for once again being accepted as "good Europeans." As good Germans, they accepted the decision of their government but they no longer seem inclined to go quietly. On the day after the September 28 Danish referendum, an opinion poll showed that 55 percent of Germans didn't want the euro. In eastern Germany, the anti-euro figure was 71 percent.

The euro has been a grave disappointment across the continent but to Germans in particular. They were promised a currency that would be at least as strong as the mark. Yet they saw the euro plunge by a quarter of its value, prompting Group of Seven central banks to intervene in September, the first time they had come to prop it up. They were promised a strictly independent European Central Bank (ECB) but have seen the bank subjected constantly to the threat of political control, particularly from France. With a collective memory of the social and political catastrophe that followed from hyperinflation in the 1930's, they were promised that the ECB would be as tough in controlling inflation as the Bundesbank had been. Yet the...