Are we witnessing the birth of the Euromark?

There is a very interesting article in today's Daily Telegraph by Robert Woolnough, in which he discusses the possibility, even the likelihood, of the birth of the 'new euro'.

In the throes of the present unbearable strains in the eurozone, the political will is unequivocal - the euro must survive. Never one to let a Euro-crisis go to waste, Germany's Chancellor Merkel has demanded some Teutonic fiscal discipline: the single currency is the very nexus of the European dream; it is the essence of sovereign unity - a United States of Europe. Former Belgian prime minister Jean-Luc Dehaene once said: ‘Monetary union is the motor of European integration'.

But someone put water in the tank: Greece has been prodigal; Spain is in a 'perverse spiral'; and Portugal will doubtless follow. 'Europe', it seems, is heading for meltdown.

This is God's judgement on the Babel currency. Either that, or the financial markets have discovered that the House of Europe has been constructed on a lie.

Robert Woolnough sees two possibilities: 'either there will be stability led by vigorous state intervention, or there will be huge chaos and uncertainty'.

But he finds it 'inconceivable that the politicians and policy-makers have not given any thought to what might need to happen should it collapse'.

'So what secret thoughts might they be having?' he asks, 'How would they cope with the unthinkable?'

If the euro ceases to be the financial system would be faced with financial calamity. The means of exchange would be questionable and, in extremis, the euro would become a worthless piece of paper. In addition, all existing legal contracts in bonds and derivatives would be denominated in a dead currency. Left unchecked, this collapse would probably destroy European capital markets and severely damage economies, with global carnage close behind.

First, the authorities would have to create new national currencies as a means of exchange. To solve existing euro contracts issues, you would need a one-for-one successor to the euro, so let's call it the "neuro". We've been here before: the ECU was turned into the euro in the same way. This successor currency would then be legal tender in all European countries. But the big question is who would stand behind this supranational currency?

Did Helmut Kohl foresee this, or even plan for it?

On 15th December 1995, the EU’s leaders agreed that the single currency would be called the ‘euro’, and thus was conceived Europe’s first single currency since the fall of the Roman Empire. The Spanish finance minister of the day, Pedro Solbes, made a play on Jesus’ words to the Apostle Peter about building the Church by affirming that the euro would be the very foundation of a united Europe: ‘Thou art Euro, and on this Euro I will build Europe.’ This remark needs to be evaluated in the context of the EU’s past use of a poster of the Tower of Babel, over which the EU flag’s circle of stars were displayed in the inverted form of a pentagram. It was used by the Council of Europe to promote ‘European construction’. Such biblical images and allusions have become commonplace, though the symbolism and significance are often perverted.

The name of the currency was significant because there was a strong German insistence on a clean break with the past. Thus John Major's suggestions of ‘schilling’ or ‘crown’ were dismissed in favour of ‘euro’ - a suitably inept diminution of ‘Europa’. It was not without significance that the term could easily become a prefix, like ‘Reich’ or ‘Deutsch’, to the currency unit of the mark, and a number of German politicians have referred to the currency as the ‘euromark’.

So when Robert Woolnough talks about a 'new euro' to replace the besieged, imperiled euro, he raises the possibility of a basket-currency 'primarily based on a new Deutschemark', which would make it a hard currency. This, he avers, would reduce the risk of financial Armageddon:

At the moment, this may sound like anathema to believers in the euro dream, but it may well be the fact that Europe is not yet ready for a single currency. If so, the authorities should recognise the fact and halt – albeit temporarily – on their journey to achieving their ultimate goal. After all, the progress to monetary union has had setbacks in the past, and even ardent euro supporters should have a plan B if things go wrong. The neuro might be a significant part of the solution.

And one might prophesy that the euromark zone would not consist of the present 16 nations who constitute the eurozone: it would need to be pared down to cut out the dead wood.

Economists have identified the 'PIGS' - that is Portugal, Ireland, Greece and Spain.

To these Cranmer would add Italy.

And so PIIGS.

And some economists think Belgium won't survive.

So that leaves a euromark zone of 10 nations.

How neat is that.

And one might also prophesy, as with a number of naturally evolving European terms, that the prefix ‘euro’ will ultimately if covertly be dropped from the 'euromark', and 'Europe' will wake up one morning to find its currency is called the ‘mark’.

And thus the plan will be complete: the 'Germanisation of Europe’ will be fulfilled.