Is this the end of the road for the euro? | Hans-Werner Sinn

Almost 20 years on, the single currency experiment has gone from party mood to hangover

In May 1998, irrevocable conversion rates for the currencies that would be merged into the euro were implemented. In a sense, this makes the single currency just over 20 years old. The first decade of its life had the feeling of a party, particularly in southern Europe; but the second decade brought the inevitable hangover. Now, as we enter the third decade, the prevailing mood seems to be one of increasing political radicalisation.

The original party was a cornucopia of cheap credit, which capital markets happily issued to the countries of southern Europe under the protection of the euro. For a while, these countries finally had enough money to increase public-sector salaries and pensions, as well as spur private consumption and investment.