If the eurozone was being formed today, it would have only two eligible members: Finland and Luxembourg. These are the only two EU member states that completely fulfill the Maastricht criteria for users of the common currency in regard to budget deficit, state debt, currency rate, interest rates and inflation. It is anticipated that this year the countries that are unable to fulfil any of the five requirements will be in the majority.

"The masterminds of the euro are also to blame: they didn't do a perfect job when they formulated the regulations for the Stability and Growth Pact," explained Zoltán Török, the leading analyst of Raiffeisen Bank, to our magazine. They did not think it through how to force countries with different budget policies to adhere to the strict requirements. The common currency pushed the weaker member countries into a competitive disadvantage from the start, which led to their budgets collapsing and their running up debt. The financial crisis that exploded two years ago just made matters worse: since collapse could only be avoided by massive injections of state and central bank capital, some countries simply piled more debt upon themselves. However, the creditors started sending out the bills before their debtors had the chance to pull themselves out of their financial troubles. The states struggling with huge deficits today have two choices: either to reduce their debt voluntarily and thus avoid the EU's and International Monetary Fund's 750 billion-euro credit line appropriation drawdown, or, like the Greeks, wait until they are on the brink of bankruptcy and then accept the rescue package but also take on the strict conditions that go along with it.  

It seems that Portugal, Spain, Italy and Ireland will opt for the first solution. But they will not be the only ones forced to tighten their belts. Since Germany is contributing 148 billion to the rescue package, preparations are being made there to introduce austerity measures the likes of which have not been seen for 60 years. There is nothing new about the cuts announced so far: the salaries of public sector workers and pensions will be cut and general turnover and income taxes raised. Although some luxury taxes will be levied on the profits of big companies here and there, it is primarily the middle and lower income groups that will bear the brunt of the changes. However, there will be no point bringing sacrifices - and Hungary will never have the euro - if the EU does not rewrite the Maastricht criteria. The EU has already started to rethink matters: the European Council has suggested that every country submit a budget plan in advance, and the Germans have set the permitted budget deficit proportionate to GDP at 0.35 percent instead of three, which assumes extremely disciplined economic management. European leaders are fully aware of the imminent danger to the euro but no one knows what they are willing to do to save it.       

Menu of cuts

» Cuts in public sector worker wages: Spain, Portugal, Italy, Romania, Ireland
» Freezing public sector worker wages: Spain, Portugal, Greece, Great Britain
» Public sector worker redundancies: Romania
» Abolishing 13th and 14th monthly bonuses: Greece, Romania (13th month)
» Freezing pensions: Greece, Spain
» Cuts in pensions: Romania
» Raising retirement age: Greece, France
» Tax rises: Greece, Portugal, Germany
» Introduction of additional taxes and fees: France, Romania, Greece, Portugal
» Reducing the number of nursery places: Germany
» Cutting back on investment and development: Spain, Portugal