"Quite simply, Europe's future is at stake," said Angela Merkel yesterday. High-pitched rhetoric from a chancellor desperately trying to coax her fellow Germans into throwing billions at Greece? Certainly, but no less true for all that. Because the last few weeks have thrown up two things that should shake up all who might wish the eurozone well. First, it has provided a glimpse of how the single-currency club might fall apart over the next few years. Second, it has posed serious questions about what the single-currency club is for – questions which also cast a sidelight on our own election. In short, this is an existential crisis for an economic and monetary zone that takes in 16 countries and over 400 million people, and which has never before faced a threat so serious.
Let us be clear: the eurozone is not on the verge of breaking up any time soon. Yet the last few weeks may come to appear like a full-dress rehearsal for the final crack-up. There were the remarkable scenes yesterday in Greece, as protesters erupted in fury against the prime minister George Papandreou's plans to slash and burn the public sector. Three people were reportedly killed in a fire in Athens and riot police firing teargas at demonstrators. And all this comes before the latest, biggest round of government spending cuts and tax rises are brought in. Meanwhile, richer countries have dragged their feet over a bailout.
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