Due to high national debt in several member states of the Euro-Currency-Area
which led to huge relief programmes the single European currency Euro seems to be
at risk. Bur neither inflation rates nor exchange rate movements of the Euro since
1999 up to 2011 give reasons to believe that an up to now success story of the Euro
will come to a sudden end in shortness. On the other hand it often had been argued
that increasing national debt will inevitably lead to higher inflation rates and will
endanger a currency by permanent devaluation. But the institutional and legal
framework of the European monetary policy, if used correctly, will give sufficient
protection against inflation pressure due to increasing national debt. The most
danger for the European currency or for the European-Currency-Area can be seen in
drifting apart of national competiveness between the member states of the Euro-
Area, especially due to an existing lack of coordination in wage policy. Different
wage policies in the member states of the Euro-Area in the past had led to different
national inflation rates and had caused calculated real exchange rate movements
which had lasting influence on national competiveness, which hamper international
trade in the case of real appreciation or which promote international trade in the case
of real depreciation..