Obituaries for the euro are premature

A few weeks ago a half dozen startled ambassadors from European Union countries were hauled up before a meeting of the Australian Institute of International Affairs in Canberra and without any preparation asked to give their views on whether the EU could survive.

The envoys had been in the audience waiting to hear an address by the Federal Opposition's Foreign Affairs Spokesman, Julie Bishop, on Australia's relations with China, but Ms Bishop was late and Institute president Ian Dudgeon hit on the EU discussion to fill in the time.

Despite being totally unrehearsed, the group, ranging from France to Finland, had the same message: The European Union will come through the current fiscal crisis, the euro will continue and no country will leave either.

France's representative, Stephane Romatet summed it up for the rest when he said: "We are constantly surprised by reading in the Australia media that the EU is on the brink of failure and that the euro will collapse. Nothing is further from the truth."

As many Australian newspapers lift, often uncritically, articles from the British media where sentiment against the EU, and especially the euro, is more widespread than elsewhere, and as the Chairman of News Corporation, Rupert Murdoch, is a strident anti-European, the bias shown in Australia is not so surprising.

There are UK commentators getting air play on radio and television and space in the print media here who virtually dance jigs at every upward tilt in an EU country's bond rate, every downward shift in its gross national product. Reputations have been staked on seeing the euro, if not the entire European experiment, fall in a heap and the critics are desperate to see their prophesies succeed.

Let's be plain: there is a crisis in Europe and it does partly stem from the single currency. The adoption of the euro has forced all member countries to try and keep up with the strongest national economy, which by a long way is that of Germany.

For countries whose economies perform at lower levels than Germany's – the obvious example is Greece, but everyone else in the euro zone is in more or less in the same boat – this has become something of a straightjacket. It's rather like being dragged along behind a sleek Mercedes sports: highly uncomfortable for those being dragged and if there are enough of them, a hindrance to the vehicle having to do the towing.

It didn't matter so much when times were good and everyone could put up a veneer of prosperity, but since the global financial crisis, the inequalities have been exposed.

There are no simple answers to this highly complex situation but CNN's Fareed Zakaria throws in a flippant suggestion when he says the EU's hallowed democratic institutions are to blame. "After all, politicians have gotten elected over the last four decades in the West by promising voters more benefits, more pensions and more health care. The question is, can they get elected offering less?"

Actually Fareed, they can and do. I can think of a number of examples when governments have been elected on the back of stern warnings of austerity – notably the Thatcher Government in Britain in 1979 chosen by an electorate sickened by a Labour administration that blatantly over-promised and delivered very little. A more recent example is that of Greece itself , where in a second round of voting the winner was a party committed to keeping the country in the euro and maintaining its austerity package if perhaps, with a little fine tuning.

Providing the electorate is shown there is light at the end of the tunnel it can be persuaded to accept some short-term pain, especially if the alternative is unthinkable chaos.

And despite the propaganda that occasionally comes out of Beijing about 'alternative systems' there is no alternative to democracy for a modern, engaged society. What would you have in its place Fareed? Fascism, communism, absolute monarchy, or maybe just anarchy?

Far from leading to its destruction, the most likely outcome of the current crisis is an even stronger, interdependent Europe. That was certainly the theme of a meeting between German Chancellor Angela Merkel and the new French President Francois Hollande in Reims recently.

The meeting was laden with symbolism – it marked the 50^th anniversary of the 1962 handshake between President De Gaulle and Chancellor Konrad Adenauer that ended the lingering enmity of World War II – but was also focussed on the future.

Merkel was clear about the direction the European Union should take: "The economic union appears not to be strong enough…Europeans should complete the economic and monetary union on a political level. Europe can emerge stronger from this crisis," she said.

Hollande was more reticent in his remarks but agreed the current financial crisis would push Europeans to speed up integration and force a "new start" for European unity.

The Reims meeting was just the latest in a long line of proclamations of the idea of a peaceful and democratic Europe that go back well before the 1956 Treaty of Rome establishing what was later to become the European Union. In 1693 William Penn published hisEssay on the Present and Future Peace of Europe in which he called for a European Parliament and a European Army.

Penn was a committed pacifist and a Quaker. Earlier in the century the continent had been ravaged by the 30 Years War, one of the longest and most destructive in its history. A seemingly endless series of conflicts had broken out almost every year since. Penn's plan for Europe had the simple objective of ending this tragic merry-go-round.

In that one respect the EU has been an unqualified success - no war has broken out within its borders throughout its existence – and given what came before, that achievement should not be undervalued. However, its citizens have a right to expect more.

As someone who has twice been thrown out of work through no fault of his own, I take no satisfaction at the loss of jobs and the cuts in living standards that have been forced on so many people in the EU. I have long argued that austerity is no panacea in itself and must be accompanied by a plan to return to growth and prosperity.

After some admitted missteps the signs are that the European economies are beginning to get it right. There will still be speed humps along the way, as the situation in Spain in the past few days has demonstrated, but on balance I would far rather put my faith in the optimism of the European ambassadors than the bias of anti-EU doomsayers now enjoying free reign in the Australian media.