An EU flag flutters inside the European Union headquarters in Brussels.
Brussels: It’s been a stormy year for the European single currency, and there are very real fears that the sovereign debt crises that hit Greece and Ireland could engulf other eurozone countries.
The EU has been under fire for its response to the crisis and for not doing enough to prevent a fresh set of bailouts.
No one could have predicted that 2010 would be the year when the EU’s biggest-ever project, the single currency, would come under attack.
The euro has been left battered and bruised by the debt crises in Greece and Ireland. And that’s badly shaken the EU as a whole.
Belgian Prime Minister Yves Leterme said: “These last six months, ladies and gents, have been very challenging for the EU… We’ve come a long way, taking necessary measures in a spirit of solidarity”.
But at times, there’s been precious little solidarity on show among the EU’s 27 leaders.
Despite the urgency, they have dithered and fallen out.
They’ve set up a permanent crisis mechanism in case more countries need help in future – but the markets are not reassured.
European Policy Centre director Hans Maarten said: “The thing is, with the volatility of the markets, there are no guarantees.
“They are like vultures looking around for weak spots and that could be anywhere. Next year it could go back to the US… to Eastern Europe, but it could also come back at the Eurozone”.
On Jan 1, Estonia will become the 16th country to adopt the euro.
The small Baltic nation still believes in the single currency, but 2011 could also be the year when other countries decide to leave the euro.
Re-define Consultancy economist Sony Kapoor said: “It’s the nuclear option for sure… but it might be the only option for some”.
There are fears that Portugal, Spain, Italy and even Belgium could be on the danger list for 2011.
If a big economy like Spain needs help, some say, this means there won’t be enough money in the emergency fund to cover it.
But that’s a question no European leader wants to face head on.
European Commission president Jose Manuel Barroso said: “Is that enough? I think the important answer given today by the leaders of the European Union was ‘we are ready to (do) everything necessary, everything is necessary to ensure financial stability in the euroarea and indeed in the European Union because in fact the two issues are linked”.
European leaders have pledged to move towards closer economic union.
They know they have to work a lot harder to restore confidence in the euro. The stakes are high, because 2011 is make or break time for the euro.