Conclusion

Conceived as a response to the breakdown of the post-war Bretton Woods accords, the euro project is now at the threshold of disintegration as the fault-lines between the core/surplus countries and the peripheral/deficit countries experience a profound rupture. In the absence of political union and fiscal federalism, these centrifugal forces appear to be irreversible. Either the peripheral states default and exit the euro, or Germany itself comes to the conclusion that the existing burden of financing the deficit countries can no longer be justified and declares its intention to construct its own exclusive currency bloc or simply restores the DM to its pre-eminent role. There are, of course, several other scenarios in between these two extremes that might involve the creation of a new informal monetary architecture resembling an intra-European payments union in which the euro is declared non-convertible except as a unit of account between central banks. Whatever the final outcome, it is difficult to envisage the current system, plagued as it is by internal contradictions, surviving the crisis that now engulfs the entire eurozone. The present crisis is to a large extent the continuation of the longstanding neoliberal policies favoured by Germany, which have informed the creation of the euro. This study has examined the historical context and the theoretical debates that have animated the long and tortuous political process in the construction of this flawed monetary edifice.