Euro bogeyman
It is fitting that hysteria is a word with Greek roots. It reflects sentiment about the euro - excessive or uncontrollable emotion, often characterised by irrationality. Yet it is spreading across the world again. Yet another wail of despair is rising to a crescendo, as more and more people get drawn into another euro-induced mass panic attack.
It is all nonsense - or almost all of it.
If you read the English-language press or tune in to English-language news broadcasts these days, you could be forgiven for thinking that the euro is about to disintegrate. It seems as if the entire European economy is bouncing off the rocks, about to sink without a trace and liable to bring the rest of us down with it.
Read them carefully though, and most articles contain the scent of bias. They are usually written by leader writers and economists rooted in the US and Britain. Many are strongly influenced by the bankers they meet for lunch and by the hedge fund managers they quote - by those who have big bets that the euro will fall in value and much to gain from this narrative.
Many of the pot-stirrers are also noticeably anti-European Union and anti-euro - with many teetering on the edge of being anti- German too. They secretly hope that the euro will be the failure they always predicted, that they can laugh as the whole 'European project' crumbles. The Europeans don't get it, they say. Austerity will not work, they say. The euro is a fool's experiment, they snigger.
The trouble is, as well as being cheerleaders for a crisis, most of these writers don't understand what they are talking about. They don't understand Europe, or how it works.
If you live in Europe - and I do - and you read the German press - and I do - you will find a very different story. The Germans and the bureaucrats in Brussels are not the blind incompetents they are portrayed to be in the opinion pages of the Financial Times or the leaders of The Economist. They are not flapping around in a tizzy, without any plan. They understand the scale of the problem they face.
They see that there is a need for greater fiscal integration. They know that their banks are weak and that they are sitting in a political minefield. But they know, too, that they cannot fix this quickly. They need to build a consensus, across many member states. They also know they need time to cajole the banks into restructuring, and persuade Europe's citizens to reflect. They know that it took 20 years to get into this mess and that it will take nearly as long to get out of it.
This is why, despite the wailing and gnashing in the English-language press, the euro has remained so strong in international currency markets during the last 18 months. Even today, despite all the doom, it is much nearer its record peak than its low.
Moreover, despite the threats by politicians in Athens, Greece is not about to leave the euro zone. It is not just that there is no mechanism for this to happen. It would be financially suicidal - and practically impossible. A country cannot just launch another currency overnight. It needs to print new notes, mill new coins, modify all the cash machines and set a new exchange rate to convert people's savings.
Given the economic outlook, the value of any new drachma would drop like a stone. It would push the country back into the dark ages financially, and invite hyperinflation through imports. It would also make their debts worse - because these would remain in euros.
That is not to say there are no risks; there are.
Just as America's plan to print money to reflate its economy may not work because it is likely to lead to a collapse in the value of the dollar, Europe's drive for austerity may not work, either. It risks a spiral of decline, without any end.
The biggest risk is political. As we have already seen in France, Greece, Ireland and the Netherlands - and in the local elections in Britain - the citizens of Europe are unhappy. They watch unemployment rising, expect further suffering ahead and want the economic pain to end. So they have begun to vote in protest, with growing numbers now attracted to the more extreme political parties, on the left and right.
For China and Asia then, the panic over the euro is a sideshow which they can mostly ignore, at least for now. It is this political change that they need to watch with care, and the rhetoric behind the new political speeches. The shift towards more extreme parties and politicians is also true of the US. Already, politicians on both sides of the Atlantic want to blame China for their country's woes. They want trade barriers and economic sanctions in punishment.
The greatest threat lies with these politicians and their growing popularity. That is what should keep Asian leaders and businesspeople awake at night, not the euro.
Graeme Maxton is an economist and author
