ABSTRACT
In the aftermath of the rejection of the European Constitution in referendums in France and the Netherlands in May and June 2005 respectively, there was talk of the imminent collapse of the euro zone. An Italian politician suggested that Italy should abandon the euro, Europe’s single currency, and reintroduce the lira. In Germany there were signs that over half of the country’s citizens wanted the Deutschmark back, and the government openly criticized the euro as a cause of low growth. Lucas Papademos, Vice-President of the European Central Bank (ECB), seemed to support some of these criticisms when he suggested that the euro zone had lowered growth in Europe and might collapse in the future.
