LONDON — Now that the proposed European Union Constitution has been well and truly sunk (although parts may be salvaged), could the same fate happen to the euro currency?

Before this is dismissed as unthinkable, it should be remembered that the euro was originally introduced not as a monetary scheme but as a political one. It was depicted as a giant step toward the emergence of an integrated European bloc that would rival American hegemony generally, and as a currency that would compete with the almighty American dollar.

The ambitious scheme for a single European currency — the euro — was intended from the start to rest on three pillars: (1) monetary cohesion provided by the European Central Bank, (2) budgetary and fiscal solidarity assured initially by the so-called Stability and Growth Pact, and (3) eventual political cohesion and integration of the EU member states.

The first pillar remains squarely in place. But the second pillar has crumbled. Budgetary discipline has been abandoned in Italy and could well be discarded in Germany. Several states find it intolerable that their public spending, and the borrowing necessary to finance it, should be limited by rules that seem unnecessary and onerous. New and much laxer rules for budgetary limits within euro-zone states have been devised that hardly provide any discipline at all.

Yet this Stability and Growth Pact that was supposed to be the rock on which the euro rested, pending the arrival of full political union in Europe. That was the third pillar, which has also been badly shaken by the French and Dutch rejections of the proposed new Constitution.

The outcome is that the euro, which until recently looked so strong, suddenly seems to be a riskier proposition. Meanwhile, the strains of trying to impose a single interest rate on 25 diverse nations, many of them with widely varying economic growth rates and social conditions, have combined with new doubts about the EU’s future to make the financial community increasingly uneasy.

The Italians, in particular, are finding the euro particularly irksome, and a senior Italian minister has demanded returning to the former currency, the lira. The Dutch have also complained loudly, arguing that the Netherlands should have followed the British policy, which has been to stay out of the euro-zone. There have even been rumors from Frankfurt, the heartland of financial prudence and the home of the ECB, that all is not well with the euro.

Investors have grown particularly wary of bonds issued by the Italian government, even though these are denominated in euros. Italy is being forced to offer higher rates than elsewhere to persuade investors to take up its paper.

The irony in all this is that the main alternative to the euro, the U.S. dollar, looked far from healthy until very recently. The central banks of China, Japan, South Korea and other Asian nations, who over two or three years had patiently accumulated enormous dollar holdings to prop up the dollar, were beginning to switch some of their holdings into euros, with the result that the dollar was sagging and the euro was riding high.

Now all that has suddenly changed. The euro’s longer-term future no longer looks so good. Even Asian Central Bankers are likely to be having second thoughts. Certainly the outward and visible sign of this has already been a sharp depreciation in the euro this month following the French and Dutch votes.

So where now for a currency that was born with high hopes but now lacks the prospect that it will ever have the backing of a strong EU government? One certainty is that the British will be reinforced in their determination to remain clear of the euro-zone and the sharp swings between the euro and the dollar, which have added to international financial instability.

Another strong likelihood is that the recent new entrants into the EU from Central Europe will be much more cautious before they, too, give up their own denominations and commit to the euro. They will probably favor a kind of semifixed relationship with the euro — not unlike the old system in which a number of European countries kept their currencies roughly in line with the strong German deutsche mark.

For those countries already in the euro-zone, the exits are not nearly so easy. Disengaging from the euro system could prove immensely complex and expensive. If Italy tried it, the immediate effect would be that its borrowing would become much more expensive still. Furthermore, a very large number of people in Western Europe have invested heavy political capital, as well as personal commitment, in making the single currency work.

All this suggests that, while the euro may lose some of its shine, it will survive in a more modest form — possibly within a currency union covering France, Germany, Belgium, Spain and maybe Italy. This would be an area of relatively slow growth and weak competition, resistance to reform, and possibly rising protectionism against Asian challenges and other unwelcome trade winds.

Eventually, of course, that would lead to falling living standards and impoverishment. But the process might take many years, and in the meantime, all these countries would remain delightful places for visiting on holiday where the euro currency could be used in a tranquil atmosphere. If that’s the way these once great European nations wish to manage their decline, who is to say they’re wrong?

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