It was Christmas in Ireland 10 years ago when my 11-year-old nephew, having overheard how the recent slump in the rand had decimated my festive finances, offered to give me his pocket money.
And on that same holiday, on January 1, I undertook my first euro transaction. Coffee and croissant. The lady behind the counter didn’t falter for a second as she handed me euro change for Irish punts.
It was the high point of the best period of Ireland’s 80 years of independence and things were only going to get better with the introduction of the new European unit.
It was an intimidating experience for a South African on the streets of Dublin that Christmas. There seemed to be a determination to buy anything no matter how much it cost and how pointless it was. Indeed the cost and pointlessness of something seemed to enhance its attractiveness in those heady days of the Celtic Tiger.
Ten years later Ireland was vastly different. There was little pre-Christmas buzz in Dublin; shops were quiet, although the pubs were surprisingly busy given the cost of booze. Many people seemed relieved when ATMs pumped out the requested funds and rumours swirled about a relaunch of the punt. Someone knew someone who had been given the contract to print the new notes. This rumour was pooh-poohed by those who argued it was impossible for the Irish government to take any major decisions because the Troika – the European Central Bank (ECB), the European Commission and the International Monetary Fund – now ruled Ireland.
Nervous apprehension seemed to be aggravated by a general unwillingness – by any individual or institution – to forecast what might happen during 2012. Ask anyone what they think might be in store and they shake their head despondently, say they have no idea and add: “You can be sure of just one thing – it will be worse.”
In his latest newsletter, US analyst John Mauldin, who participated in last November’s Kilkenomics Festival in Ireland, attempts to fill the forecast void by reinterpreting the Mayan Code and concluding – in his delightfully entertaining way – that the ancient South American tribe was predicting the end of Europe and not the world on December 21, 2012.
It increasingly looks as though the euro, as a single currency, may not survive 2012. The major challenge in forecasting this is due to the fact that an essential aspect of the euro plan was that there was no going back, no way out. This means that nobody is able to predict what would happen on day one after an exit but everybody imagines that it would be grim.
And so the situation in Greece gets worse by the day; despite the interminable “crisis” meetings, the powers that be in Europe – Germany and France – seem unable to make any real progress. The money men at the ECB are only just starting to realise that the “austerity pact” conjured up in December is unlikely to survive close interrogation by individual states.
For the PIIGS (Portugal, Italy, Ireland, Greece and Spain), the austerity measures proposed within the tight confines of the euro offer each troubled country gloom, and after that, more gloom.
And so 10 years on, the ill-considered creation of a single unit for the then 11, and now 17, very different countries has done little to persuade the citizens that they are all equal members of the same powerful club. This post-World War II ideal that lay behind the creation of the EU and the euro has been replaced by a growing hostility among members as the traditionally weaker European states are again overshadowed by the stronger ones.