Is the euro really irreversible?

CURRENCIES

There is undeniable tension within the European Central Bank and across eurozone governments in relation to the euro.

With this in mind, perhaps ECB president Mario Draghi was right to convince the markets the euro remains irreversible – even though he risked fuelling further uncertainty by doing so, due to the lack of political consensus. Indeed, while the euro’s irreversibility is still enshrined in treaties, today’s markets are not particularly convinced. All of the risks neutralised by the creation of the euro (e.g currency, liquidity and solvency) have resurfaced, resulting in wider intra-Economic and Monetary Union (EMU) spreads and bid-ask spreads for peripheral debts. Looking back on events, ...