Senior figures in Paris, Brussels and Berlin have reportedly begun to discuss how to manage a staged fragmentation of the eurozone. At issue is the question of whether a number of nations – specifically the likes of Italy, Greece and Portugal – might be dropped in favour of a new, more compact eurozone focusing on tighter economic integration.
It’s fairly clear that the eurozone can’t continue in its current format. The semi-integrated approach to European union has come unstuck when faced with its first major challenge. Many analysts are now saying openly that Greece should never have been accepted into the eurozone and there is a sense that a huge phase of house-cleaning is required.
How the eurozone would look at the end of such a process is unclear. Many analysts believe there will be a smaller eurozone featuring much stronger levels of integration. What’s unclear is how the UK would fit in with that system. Could we be about to see the UK move further away from the EU? And will the next phase of the eurozone be essentially a Franco-German empire?