Rather than just post a link containing an American professor in economics opinion that the Euro will replace the Dollar as the world’s reserve currency within five years, I would also agree with recent comments on this thread that the Euro’s failure can’t be allowed to happen – it’s too big to fail, far too big.
The problem with predicting the euro’s “failure” is that there isn’t an agreed definition of what “failure” means.
You could reasonably argue that it has already failed – first when countries had to break the growth and stability pact and let their deficits rise above 3%, again when other countries had to be bailed out, and possibly other times as well. However each of these “failures” results in a different type of euro rather than a new currency altogether. Even if Greece does somehow leave the euro then it will still exist – and be a lot stronger as a currency for that matter – but it will have failed Greece.
So…at what point do we decide that the euro has “failed”?
We beat ourselves up over the bailouts for Greece, Ireland and Portugal; they’re but small ripples on the bigger picture, and if the Euro does become the world’s reserve currency, those countries debts can be written off without the printing presses even becoming warm.
Would that make the underlying problems with the euro go away?