Yesterday morning I attended a breakfast seminar. Professor Henkel from Germany told us how he had been a keen exponent of the Euro in the 1990s. As Head of the German equivalent of the CBI he had come to the UK to urge our membership of the currency.
He has recently published a book explaining why he thinks he was wrong. He now sees the force of criticisms of the scheme which we sceptics put forward at the time. He is worried about the future of the single currency, and is now urging his fellow countrymen and women to think again.
He believes the best fix would be for Germany, Finland, Austria and Holland to leave the Euro and create a new stronger currency, which would revalue against the Euro. France would remain as the leader of the Euro group, and that currency could devalue against more successful economic areas, relieving some of the competitive pressures.
He thinks the formation of a transfer union, sending more grants and gifts to the poorer areas, the more likely outcome of EU deliberations. He thinks the German people will grow increasingly unhappy about this, whilst most of their elite leadership will remain fully behind the Euro project.
He thinks the Euro is now worsening German relationships with the weaker countries. He finds resentment of German government lectures on the need for belt tightening in countries like Greece. He thinks the guarantees and support for Euroland now add up to €5000 for every man, woman and child in Germany.
All the time France and germany disagree about the solution, and all the time there are big differences of view between Germany and the European Central Bank, the ride will be rough for the single currency.