February 19th, 2010
03:34 PM GMT
Many Europeans were quick to blame America for starting the global recession. It's true that too many US homeowners over borrowed from overzealous banks, but we've since discovered that whole countries in Europe could be accused of doing a similar thing.
To get through the financial crisis, many governments borrowed more. Some may have gone too far. Greece is now struggling to keep up with its debts, and that's shocking to investors who didn't expect to hear that from a Eurozone country.
They would normally be more than happy to lend to a country like Greece by buying bonds. Now investors are thinking twice because they see a risk in getting their money back. Not only that, they are wondering if other countries are just as risky.
You don't have to go far to see that Portugal, Ireland and Spain all have very high deficits. Even the UK, a major world economy, may have been cavalier with its finances.
So far, the Greek debt crisis is just that – Greek. But if neighbouring countries go the same way, it will be a huge test of the Eurozone.
How do you set one interest rate across a zone where one part is sinking into recession whilst the other is trying to recover?
Eurosceptics have long argued that if you are going to have one interest rate you also need to set one central budget. In the Eurozone you have one interest rate and many budgets. That's why a single currency works in the US and why it doesn't in Europe, as Greece is proving.
We want to know what you think.
Do you think the Euro was a bad idea?