By Wu Xia
A decade after the full adoption of the euro, it seems the alarm is ringing for the European single currency.
On Friday, euro slumped to its another 16-month low on upbeat U.S. job data and International Monetary Fund chief Christine Lagarde's remarks that euro is unlikely to "vanish" in 2012.
As the more than two-year-old sovereign debt crisis sees no quick end, and economists warn of a second recession upcoming, doubt is growing over whether the 17 nations that use euro can hold together.
Some analysts say Greece may become the first eurozone member to leave the currency union, while euro skeptics urge banks to prepare for catastrophic contagion in the global financial market following a likely euro break-up.
Such pessimism is at best a necessary caution over the European sovereign debt problem, but it could actually threaten euro stability by denting confidence among investors.
If panic over a euro break-up is not contained, debt-stricken countries floundering to tighten fiscal control and regain economic growth would have to accept still higher borrowing costs.
The collapse of the euro is not in the interest of any party in the world. It may lead to the break-up of the eurozone, delivering a serious blow to the Continent's long-planned project of regional economic and political integration.
The United States and other major trading partners of the European Union will also suffer from the breakdown. Exchange rate issues, inflation, trade protectionism may reemerge after the euro is replaced by national currencies.
On the global financial market, a euro break-up may cause massive losses to investors and have severe ripple effects more devastating than the Lehman Brothers collapse in late 2008.
Abandoning the euro, now the world's second largest reserve currency, would also increase the global dependence on the U.S. dollar and hinder the progress on the much-hoped shift toward a multipolar reserve system.
China, as the major trading partner of the EU, hopes European leaders will implement an effective rescue plan to help the single currency tide over the crisis.
As EU's second largest trading partner, China has been lending continuous help to pull the continent out of the current financial turmoil, because China will also suffer if the euro breaks down.
The Chinese government has repeatedly said that it has been a long-term investor in European sovereign debts and will continue to support Europe and the euro.
A prosperous and stable Europe is important not only to economies in the EU, but also to other countries, big or small, because of the interdependence in the global economic and financial systems.
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