More than a dozen years ago when the single European currency was born, Reuters polls of economists show they were well aware of many of the flaws that threaten the euro today.

While no-one in the late 1990s anticipated a sovereign debt crisis quite like the one now raging from Athens to Rome, Reuters polls from that era showed the euro zone's existential plight has deep roots.

They had clear reservations about how some euro zone members seemed financially fitter than others.

Those worries were fast forgotten through a decade of low inflation and strong economic growth, but have been exhumed in violent fashion by the political and financial ructions of Greece, Ireland, Portugal, Spain, and now Italy, this year.

A grave existential crisis like the turmoil now -- I don't think anybody foresaw anything like that, said Holger Schmieding, chief economist of Berenberg Bank, who contributed to these polls while working for Merrill Lynch at the time.

I was aware of the problem that you have a monetary union without a fiscal union, and I wrote about the issues that low interest rates for the periphery will likely get them into a boom, but what happens when the boom goes bust?

Economists picked three scenarios as most likely to threaten the existence of the euro zone: a decision to withdraw by one of its members; national resistance towards greater political union; and the danger that a one-size-fits-all monetary policy creates economic havoc.

All of these scenarios are being played out today in some way. At a theoretical level, French and German policymakers are discussing a two-speed Europe with a smaller, tightly integrated euro zone and a looser outer circle.

Citizens who face years of dismal growth and high unemployment in the euro zone's weaker economies might attest to the failure of one-size-fits-all monetary policy.

And there is no shortage of national resistance -- both among the creditor countries who fail to see why they should pay for the past sins of the periphery, and those very debt-laden states who feel scapegoated by the core.

While recognising shortcomings in the euro's construction, economists were optimistic about its longevity.

The January 1999 Reuters poll of around 50 economists taken right after the birth of the euro showed a 90 percent chance the euro zone would survive to 2009. It put an 83 percent chance it would last until 2019.

Curiously, the only respondent to forecast a zero percent chance of the euro zone surviving the next 20 years came from Athens, the Foundation for Economic and Industrial Research.


The euro zone periphery's budgets were a worry well before the single currency was launched.

A July 1998 Reuters poll showed 34 out of 42 economists backing the presidents of the European Central Bank and Bundesbank in their belief that the fiscal policies of some countries were too loose before euro adoption.

Respondents were also asked to name the countries they thought had fiscal policies that were too lax in the run-up to the euro's launch.

Topping the list were Ireland, Spain and Italy.

I don't think anyone thought it was going to be plain sailing, said Trevor Williams, chief economist at Lloyds Banking Group, a contributor to the survey, looking back on how economists thought the euro would fare.

There was optimism that the currency would reduce transaction costs in a single market, and would economically benefit those members, particularly the smaller ones.

While everyone realised that economies and budgets needed to harmonise over time, Williams said the peripheral members frittered away their big chance to do this, when borrowing costs were low and budgets were in surplus from boom time revenues.

They borrowed too much, they spent too much, they lived beyond their means, he said.

(Editing by Ross Finley and Ruth Pitchford)