Secret German Euro concerns revealed

Secret German doubts about the durability of the euro have been published. German publication Der Spiegel made a successful request for the release of files detailing serious German internal monetary union concerns.

Italy and Greece take a pasting from the revelations. So were the public misled?

Euro con trick?

That is certainly the suggestion. "The decision to invite Rome to join," says Der Spiegel, "was based almost exclusively on political considerations at the expense of economic criteria. It also created a precedent for a much bigger mistake two years later, namely Greece's acceptance into the euro zone."

Shortly after the Euro's introduction, Gerhard Schröder, the center-left Social Democratic Party (SPD) candidate for the German Chancellery, tagged it as a "sickly premature baby."

Italy attempted to hide the reality of its budget deficit through nifty financial juggling. In early 1998, the Italian Treasury, notes Der Spiegel, published such positive figures about the country's financial state that even a spokesman for the Italian Treasury described them as "astonishing."


But Kohl pushed on regardless, regardless of abundantly clear warnings from close aides about Italy, in particular.

"The euro is now in its 14th year," says Der Spiegel, "and after two years of ongoing crisis, there is a growing realisation in Berlin and other capitals that the status quo cannot continue. All reform efforts still resemble small steps to nowhere, and yet politicians are beginning to think in terms of broader categories as they cope with the crisis."

Meanwhile this morning the German Bundesbank managed to flog €4bn of bonds maturing at a low 0.56% yield. So buyers are still plumping for safety than risk. Further south, Greece looks increasingly ungovernable. And in Italy, 9m voters in local elections have voted for a former comedian, now turned politician - Beppe Grillo - who wants to ditch the euro.

A growing backlash against all major political parties, then.