It's a grand experiment but does Europe still have the will to keep the euro as we know it alive?
Is the euro destined for collapse?
The crises in Portugal, Italy, Spain, and Greece – the PIGS countries – may have been just the start to what will inevitably come for Europe. And, the root cause could be the very thing symbolizing European unity – the euro. That's what Jens Nordvig, Global Head of Currency Strategy at Nomura, says in his new book, The Fall of the Euro.
(Read this primer: European Central Bank: CNBC Explains)
The currency of the European Union, the euro, was created to do something Charlemagne only dreamed about – unite the continent in peace and prosperity a few short decades after two devastating World Wars. But, says Nordvig, the politics that created the euro sowed the seeds for crises in the PIGS.
"I think the whole Eurozone is now essentially tied together by all these types of backstops from the [European Central Bank and] from the European Stability Mechanism," says Nordvig. "But, all these backstops rely on some kind of political cooperation. If that political cooperation breaks down, then you start to have problems with the Eurozone again."
For Nordvig, the recent by-election victory in southern France of Eurosceptic party Front National is an example of how the political will to keep the Europe Union together may falter.
Nordvig doesn't believe the euro's next crisis will be financial. Instead, he sees the future brewing political and social crises for the currency and the European Union as a whole.
How could the euro ultimately devolve? Watch the video above to see what Nordvig has to say is the future of the euro.
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