The euro sign landmark is seen at the headquarters (R) of the European Central Bank (ECB) in Frankfurt, September 2, 2013. The ECB council will hold its monthly meeting on Thursday, September 5. 
Kai Pfaffenbach / Reuters

As doom and gloom about the euro abound, an increasing number of commentators and economists question whether the common currency can survive. The world economy, they allege, is teetering on the edge of an even deeper crisis than today's. 

To be sure, the eurozone faces serious economic and financial problems. The area is in the midst of multiple overlapping and mutually reinforcing crises. The first is a fiscal crisis, which has taken its biggest toll in Greece but pervades the southern part of the eurozone and Ireland. The second is a competitiveness crisis, long evident in the large current account deficits along the eurozone's periphery and the even larger current account imbalances between eurozone countries. The third is a banking crisis, which first unfolded in Ireland and has become particularly acute in Spain. 

Yet for all the turmoil, fears of countries' repeatedly defaulting on their debts or the total collapse

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  • C. FRED BERGSTEN is Director of the Peterson Institute for International Economics. He was U.S. Assistant Secretary of the Treasury for International Affairs in 1977–81 and Assistant for International Economic Affairs to the U.S. National Security Council in 1969–71. Copyright 2012, Peterson Institute for International Economics.
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