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Euro in profound crisis !!!

Many of the countries which joined the euro have suffered economic stagnation and rising unemployment, with people also blaming the currency for rising inflation. Although the German and French economies are stuttering, Italy has plunged into full blown recession.

The euro is vulnerable to a collapse in public support because none of the 12 countries that joined it allowed their people to approve the decision in a referendum. Many Dutch used the referendum on the constitution to show their disapproval of the euro, while in Germany polls show 56 per cent of people want to return to the mark.

A report called The Demise of the Euro by the Centre for European Policy Studies, a think-tank funded by the European Commission, admitted that the currency was probably responsible for Italy’s economic problems, which it predicted would soon afflict the majority of countries in the eurozone.

Confidence in the euro collapsed in the markets after the French and Dutch referendums, because economists believe that it would make it difficult for governments to co-ordinate action to keep the currency stable. The currency had already been hit by the collapse of the Stability Pact which underpinned it. Eurozone governments are now openly flouting their legal borrowing limits.