Splits within the European monetary union threaten to widen ahead of the 10-year anniversary of the euro currency in January. Greece, Portugal, Italy and Spain are struggling with eroding competitiveness, rising prices and bloated debts. Meanwhile, Germany is economically robust thanks to brisk global demand for its machinery and other goods. Their competing demands have rekindled talk of a north-south divide. The growing north is concerned about inflation and higher interest rates, while Southern Europe worries about stagnation and prefers lower rates and a weaker currency.

Related Summaries