European Commissioner Olli Rehn has stated that the European Union is at grave risk of a double dip recession. At the same time as making this grim warning, Olli Rehn revealed that the European Commission predict growth at a rate of 0.5 per cent during 2012. This is not the most pessimistic scenario, but it is substantially bleaker than the original forecast of 1.8 per cent. With the economies of Greece and Italy under intense pressure, there are fears that the euro itself might not endure.
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In times like these, the very survival of the euro is in doubt. Its critics always maintained that it was not an optimum currency area. They pointed out that there is less movement of labour in the European Union than in the United States of America, for example. Furthermore, they pointed out the very significant economic disparities between the affluent core and the less successful periphery.
Even many supporters of the euro conceded that it was a political project which could be vulnerable to external economic shocks. Some of them indicated that there should be a greater pooling of economic sovereignty and more democratic input to improve the system. In their defence, few economists or economic commentators predicted the severity of the Great Recession or the subsequent sovereign debt crisis.
As long as the euro exists, it will be important to access the best euro rates. It is worth bearing in mind that the euro may survive this crisis. It is possible that it will do so with a reduced membership.