In the eyes of many experts, the euro is still ailing. But what they don't know is whether it's just a cold, which can be treated, or a terminal illness. No one seems to have the right remedy. That worries Hans-Olaf Henkel, the former president of the Federation of German Industries (BDI) who also served as managing director of IBM Deutschland: He believes the euro has failed and gives Germany part of the blame.

"We have not complied with our own guidelines, which certainly would have made the euro a success," Henkel said. Together with the French government, he adds, the German government weakened the stability pact by breaching its criteria – "without an emergency, without a financial or economic crisis, and without a euro crisis."

'Greece isnt't entirely to blame'

European Parliamentarian Elmar Brok, a member of Germany's Christian Democratic Union party, agrees that Greece isn't entirely to blame for the euro mess.

"Often the feeling in Brussels is that if the big nations need to bend the rules, they change the rules," Brok said. "But when the smaller nations try to bend the rules, they're hung out to dry. We need to make perfectly clear that we Germans have a responsibility to restore trust in our own standing."

But the German government's hesitant response to the crisis has shaken trust in the euro. At the beginning of May, the European Union agreed to a 750-billion-euro rescue package for the common currency – in a bid to calm turbulent financial markets. After grinding its gears, the German government switched into the fast lane and approved 147 billion euros in aid.

Andreas Schmitz, president of the Association of German Banks, believes Berlin moved too fast, however. "If the money is already lying in front of you on the table, you grab it," he said. "A better idea is to dangle the money and be told that it's all yours if you're willing to accept certain conditions."

European currency watchdogs

Observers agree the EU will have to live with its own mistakes as it searches for remedies to cure the ailing euro. The European monetary fund, favored by German Finance Minister Wolfgang Schaeuble, has been sharply criticized by European currency watchdogs. They fear such a fund would allow debt-ridden nations to pull back on their austerity efforts.

Another idea making the rounds is the establishment of a European economic government. France hatched the idea and, until recently, stood alone in its support. Then Germany showed interest and, more recently, members of the EU summit in June backed the notion of a common economic policy.

If there is to be an agreement, Christian Calliess, a European affairs expert at Berlin's Free University, expects member states will be willing to give the EU greater economic control rather than responsibility for drafting economic policy.

"I can imagine plenty of control options, like giving greater responsibilities to the European Commission and other community bodies to oversee the budgets of member states," Calliess said.

Tough action

If there is a consensus in the eurozone today, it's to combat not the symptoms but the causes of the euro's illness. That means getting a handle on government debt to halt speculation against the euro. And that, says Calliess, implies taking some tough action.

"In the event of an extreme case like Greece, we need to have the possibility of allowing a country to file for insolvency in much the same way a company does in the private sector," he said.

For sure, this could be a risky operation but it's one that could prevent the euro from becoming a chronically ill, weak currency.

Author: Danhong Zhang / jrb
Editor: Andreas Illmer