Wolfgang Munchau writes about his doomsday scenario for the euro (Financial Times subscription required):
It is almost impossible to overstate the importance of the French referendum on the European constitution for the future of the European Union. Last week, I argued that a No vote would bring the process of EU enlargement to an untimely end. But what about the economic consequences for the EU itself and the eurozone in particular? They may be even worse...
For the first time since the creation of the euro in 1999, we might be discussing what the European Central Bank and euro advocates have most dreaded: how long the euro might survive.
Without the prospect of eventual political union on the basis of some constitutional treaty, a single currency was always difficult to justify, and it might turn out to be even more difficult to sustain...
Even without an overarching economic rationale, however, the euro can be still justified for as long as progress towards political union continues - however slow and hesitant this may feel at times. Nor would it matter greatly if this process stretched beyond one's own lifetime. As long as everybody believes that the EU is moving in this general direction, it is perfectly legitimate for a monetary union to precede a political union even by decades.
But what if eventual political union suddenly seemed less likely than political fragmentation? Without the goal of some form of political union, could we still expect Germany or the Netherlands, for example, to be committed forever to a currency area whose monetary policies might not suit the economic conditions of their particular economies? Without the politics, the euro is not nearly as attractive.
This does not mean that the eurozone will face imminent collapse after a French No vote. It might survive several decades in the twilight of faltering European integration. But its life expectancy may soon be regarded as finite.
That warning seems overly dire to me, but I'm not an expert on such things. Any thoughts?