There are many views being expressed about whether the Euro will survive.I was therefore tempted to offer my own views and while doing so, I also want to compare the EC’s challenges with that of India. I would like invite comments from others in order to understand the issues more clearly from other perspectives.

India and Europe had and have one thing in common- a complex woven fabric comprised of numerous nation states each pretty different culturally. Why then has India succeeded in becoming a single nation with one currency whilst the EU struggles?

Europeans are, by and large, first French, German , Spanish, etc. and then only, European. That is also how they see each other too. Hence parochial politics will prevail over Euro zone imperatives as far as possible. India had it easy in 1947, not because Indians were smart but because the British self-interest forced the formation of a single ‘nation’ and that was further helped along by British policies against the independence movement. While I am not qualified to predict whether the Euro zone will take decades or years to become one integrated entity, I do feel that the necessary glue needs to appear from somewhere for it to happen. Sometimes a severe crisis brings together unlikely people to become partners because self interest and common interest become one and the same. God alone knows when that glue will appear.

It can be argued that the founders of the Indian Republic also contributed to integration with no questions asked of them about alternative models. They vested the Federal Government with adequate powers to govern, as one nation with one political process and agenda, what was then, a mixed bag of individual states with their own agenda, a bit like Europe. It is only in the 90s that regional politics took centre stage. By then it was too late to impact nationhood. Europe does not have that convenient set of circumstances. Just look at the Irish! They are down to their last penny but still want to preserve the right to indulge in very low corporate taxation, risking the wrath of potential lenders who can bail them out. There is no governing constitution that can force them to behave differently. How long can nations like Germany who have their own internal compulsions, both legal and otherwise, forgive the indulgence of the likes of Greece and Ireland?

Theoretically, there are 2 things that can fall apart- the Euro and the EC as it looks today. It is in not in Europe’s interest to allow either of those to happen. Therefore there will be kicking and jostling that will finally in the short term, result in compromises that are somewhat away from pure sovereign interests and also away from perfect European Community alignment. Who knows what the long term will look like! After all, if you want to predict long term outcomes along with timing, the only option is to not to do so. Instead one should attempt, one or the other, or better still project scenarios and watch. I am inclined to think that one option before the EC in 2011 is to encourage the PIIGS to leave the currency union and revert to their own currency without leaving the EU. That will leave them to their own devices, sovereignty and all, to mend their economy and they can rejoin the Euro when they meet the common currency norms. At that point their currency will in all probability be relatively devalued to ensure that they remain competitive enough to meet EU norms in the future. I have been saying this for a long time. This is going to be tough decision but certainly an option.