The euro is the world’s first currency invented out of whole cloth. It is a currency without a country. The European Union is not a federal state, like the United States, but an agglomeration of sovereign states. European countries are plagued by rigidities, including those in labor markets—where language differences and the protection of trades and professions in many countries impede labor mobility. That makes it difficult for their economies to adjust to cyclical and structural economic shifts.
For such reasons, when the euro was created in 1999, Milton Friedman famously predicted its demise within a decade. He was wrong about the timing, but he may yet be proven right about the fact.
Greece is the epicenter of a currency and fiscal crisis in the euro zone. Markets fear a “Grexit,” or Greek exit from the euro. That exit is almost a foregone conclusion. The endgame for the euro will be played out in Spain.