On 1 January 2002 the euro became a physical reality. New banknotes and coins were introduced across the Continent in the largest ever cash changeover.
There were celebrations outside the headquarters of the European Central Bank in Frankfurt to welcome the arrival of the single currency into the lives of ordinary people. But tomorrow's 10th anniversary of this leap forward in European integration will pass in silence. The reasons are painfully obvious. The mood in European capitals is closer to mourning than celebration, since 2011 was the year that the world began to question whether the eurozone would survive. At the G20 summit in Cannes in November the German Chancellor, Angela Merkel, and the French President, Nicolas Sarkozy, acknowledged the possibility that Greece might leave the single currency. A Rubicon was crossed. If one country could depart, why not others? So what is the probability that 332 million European citizens from 17 states will still be using euro notes and coins in a year's time? Here we look at four different scenarios for the single currency over the coming year.
What could happen to the single currency?
European nations enter recession. The contraction scuppers the deficit reduction efforts of the troubled peripheral states of the single currency, necessitating fresh bailouts for Greece, Ireland and Portugal. Italian and Spanish state borrowing costs also remain painfully high. However, the European Central Bank buys enough sovereign bonds and injects sufficient cash into the financial system to prevent any eurozone member state defaulting on its sovereign debt. The eurozone is severely weakened, but just about hangs together.
Athens decides that it cannot cope with the austerity being imposed as the price of its bailout and secretly negotiates an exit from the single currency. Other states, which are relieved to see the back of Greece, agree to prop up the country's banking system after it departs.
Ireland and Portugal exit
Greece gets an instant boost to its exports after reintroducing the drachma. Ireland and Portugal, which have both fallen into a depression, decide that they too would be better off outside the eurozone, and demand a exit transition package along the same lines as the one secured by Greece.
The Doomsday Scenario
The bond markets push up Italian and Spanish debt costs to unsustainable levels and the ECB sits on its hands. Bond auctions in Rome and Madrid flop. European leaders desperately attempt to boost the size of the bailout fund but they cannot get the necessary measures approved by their national parliaments. Italy and Spain default, which creates a Continent-wide financial meltdown. In the ensuing chaos, the eurozone breaks apart.