Founder of the euro calls for a break up of the 'catastrophic' currency
The can kicking Europeans are being warned again that the current course they are on is leading to disaster.
The founder of the euro currency, Oskar Lafontaine, thinks that its time to break up the EU:
Mr Lafontaine said he backed EMU but no longer believes it is sustainable. "Hopes that the creation of the euro would force rational economic behaviour on all sides were in vain," he said, adding that the policy of forcing Spain, Portugal, and Greece to carry out internal devaluations was a "catastrophe".
Mr Lafontaine was labelled "Europe's Most Dangerous Man" by The Sun after he called for a "united Europe" and the "end of the nation state" in 1998. The euro was launched on January 1 1999, with bank notes following three years later. He later left the Social Democrats to found the Left Party.
As if to confirm Lafontaine's dire warnings, France announced the "end of austerity":
His prediction appeared confirmed as French finance minister Pierre Moscovici yesterday proclaimed the end of austerity and a triumph of French policy, risking further damage to the tattered relations between Paris and Berlin.
It is unclear whether the EU retreat from austerity goes much beyond rhetoric. Mr Moscovici conceded last week that the budget delay merely avoids extra austerity cuts to close the shortfall in tax revenues caused by the recession.
"Austerity is finished. This is a decisive turn in the history of the EU project since the euro," he told French TV. "We're seeing the end of austerity dogma. It's a victory of the French point of view."
Mr Moscovici's comments follow a deal with Brussels to give France and Spain two extra years to meet a deficit target of 3pc of GDP. The triumphalist tone may enrage hard-liners in Berlin and confirm fears that concessions will lead to a slippery slope towards fiscal chaos.
German Vice-Chancellor Philipp Rösler lashed out at the European Commission over the weekend, calling it "irresponsible" for undermining the belt-tightening agenda.
The Franco-German alliance that has driven EU politics for half a century is in ruins after France's Socialist Party hit out at the "selfish intransigence" of Mrs Merkel, accusing her thinking only of the "German savers, her trade balance, and her electoral future".
Something is going to have to give. The German taxpayer is tired of supporting the rest of the continent in their profligate ways and will probably take their anger out on Chancellor Merkel. This may lead to a German leadership less willing to play ball with the rest of the EU and more willing to strike out on a more independent course that would leave several member states - Greece, Portugal, Spain, and perhaps even France - holding the bag when default becomes certain.
Germany won't exit the euro. The euro will likely die a slow, painful death as nation after nation finds it impossible to repay their debts using the common currency.
But don't worry. There are plenty of Europeans who think like Mr. Lafontaine so that in another decade or so, they willl try to unite Europe once again in a common currency.