Two-Speed Europe Exposes Myth of Single Currency

As Greece finalizes Friday its negotiations with the European Union and the International Monetary Fund for a third bailout of $94 billion to save it from economic collapse, one of the most vivid analysis of the divisions within Europe has shown the extent of the north-south divide. 

The Fitch Eurozone Sovereign Snapshot shows that Germany, the Netherlands, Luxembourg and Finland have the strongest credit ratings at AAA. Just behind them with slightly lower ratings are France, Austria and Belgium — followed by the Baltic States and Ireland.

However, of the southern Eurozone member states, Italy and Spain get B level ratings (lower medium grade), with Portugal and Cyprus even lower. Greece gets a C-level rating, meaning the agency believes a default is imminent.

The extent of the credit gap shows the Eurozone to be a north-south divided currency unit and there have been repeated calls for a two-zone Euro. According to Debating Europe, the EU is already divided – in and outside the Eurozone itself.

The one-size-does-not-fit-all argument suggests that, without British opposition France and Germany could have created a stronger union years ago. The argument runs:

"Let those that want true political and economic integration forge ahead unfettered by the skeptics on the sidelines."

There is rising anti-EU sentiment in the whole of the EU, with the migrant crisis bringing the issue of border control and freedom of movement of people to a head.

Moreover, EU states have cherry-picked which bit of Europe they want to be in or out of. An online platform Debating Europe say:

"Ten EU nations are outside the euro-zone. Britain and Ireland are happy beyond Schengen’s borders. Denmark shuns Europe’s Common Security and Defence policy. The Poles joined the Brits in opting out of the Charter of Fundamental Rights while the Czechs keep them company outside the new Fiscal Compact."