FRANKFURT- Stung by a decisive "non" and "nee" against the EU constitution by French and Dutch voters, the euro - a pillar of European integration - is again being blamed for higher prices and lingering economic malaise among the 12 countries that use it.
Its defenders assert that the common currency, which has fallen 10 percent in value against the U.S. dollar since March, remains solid. But the election results have revived critics who contend its time has passed - or never was.
While analysts say a country could legally leave the euro zone, it's unlikely that any would - and none has talked about doing so.
But in Germany, where the euro is widely considered to have led to prices being rounded up, there's a sentimental longing for a return to the mark. A May 26-27 poll of 1,001 people by the Forsa organization for Germany's Stern magazine found they would rather have the mark than the euro by a 56 percent to 44 percent margin. The margin of error was 3 percentage points.
That, said Thorsten Polleit, an economist who covers Europe for Barclays Capital, is redolent of the criticisms voiced ahead of the euro's rollout to the public in January 2002.
"There is a very real fear that forces within the euro zone are getting stronger than we suspected," he said, referring to critics of the single currency.
But others argue that the euro is solid, and the votes shouldn't set the tone for the euro's future.
"They might have undermined the confidence for investors," said Lorenzo Codogno of Bank of America, adding that foreign investors may pull back until the euro further recovers against the U.S. dollar. The euro climbed to a high of $1.2294 before slipping back to $1.2273 Thursday, up from $1.2213 in New York late Wednesday and after dropping as low as $1.2160.
"Nothing has really dramatically changed," Codogno said. "There is an ongoing malaise in the economy which certainly is not helped by the results of these votes."
Mark Austin, a foreign exchange strategist with HSBC, said the votes have laid bare the divergences in growth among the 12 euro-zone countries. Italy is in recession. Germany, the EU's biggest economy, has warned that its growth is starting to cool, as has France.
Economic expansion in Ireland, meanwhile, is forecast to accelerate this year to 5 percent from 3.5 percent last year. Its rate of growth, the fastest among Western European countries, is mostly due to high levels of foreign corporate investment.
"Some have viewed that as a sign that the common currency isn't appropriate for the existing members, let alone expanding it to a wider group," he said. "It goes back to the debate at the euro's birth - can the currency function effectively in such a large area?"
The euro requires a one-size-fits-all interest rate policy set by the European Central Bank, meaning countries with lagging growth can no longer resort to rate cuts on their own.
"The euro did not address the fundamental problems that are holding up European growth," said Peter Morici of the University of Maryland. "In fact, by requiring such a geographically diverse economy to be locked into a single monetary and fiscal policy, it constrained growth."
That hasn't deterred the 10 new members of the bloc that remain committed by treaty to joining the euro when they meet its requirements for low inflation, deficits and government debt. Estonia and Lithuania have already pegged their kroon and litas to the euro, while neighboring Latvia views the euro as its path to economic prosperity.
"No one is rethinking joining and everyone is still willing because we are a small economy and operating in our small currency it wouldn't be a very efficient way to do business staying with that," said Liene Kule, a senior economic adviser for Hansabank Latvia in Riga. "It's better for business joining a larger currency. The only thing still being determined is when we will adopt the euro."
Austin said the 10 new members do want to be part of the euro.
"They see joining the EU and joining the euro as a route to economic development," he said. "The complaints are coming from the founding members, who are asking, 'What has the euro done for us?' Unemployment is rising and they're looking for things to blame."
ECB head Jean-Claude Trichet has repeatedly urged governments to loosen rigid labor market rules to improve growth, rather than wait for the bank - which has held its main interest rate unchanged at 2 percent for two years - to cut rates.
That hasn't stopped naysayers, who claim that monetary union's effectiveness is coming to an end.
But any suggestion that a euro-using country would try to leave the zone can rattle markets - badly.
On Wednesday, the euro fell sharply after Stern reported that German Finance Minister Hans Eichel and Bundesbank President Axel Weber had attended a routine roundtable of economists where the discussion of the failure of the monetary union allegedly came up.
Though both quickly denied they had discussed the idea, the report roiled traders already made jittery by the votes in France and the Netherlands. Theoretically, a country could leave the euro, but the possibility is seen as more than a bit far-fetched.
Trichet dismissed the idea. "I don't comment on absurd questions," he told reporters Thursday.
Polleit said a country fearing the ruin of the currency in the future might consider taking such a step - and had the right to do so. "In general, such a decision would certainly depend on weighing the costs and benefits in the widest sense from the individual point of view," he said.
Denmark and Britain negotiated opt-outs from the euro, and Sweden voted down the idea of dropping its kronor in a national referendum in 2003.
But Patrick Jacq, a strategist with BNP Paribas in Paris, said the euro had brought substantial benefits to all its members.
"In the case of a crisis affecting one euro-zone country ... we don't have attacks on the currency in the way that we did before the creation of the euro."
During the political sniping between the U.S. and France surrounding the invasion of Iraq, Jacq said that without the euro, the franc could have been pulled down by concerted selling actions. To defend against that, the national bank would have had to sell foreign currency reserves or raise interest rates.
"And that would have had an economic cost," he said. "But we don't have that kind of problem any more - that's a real positive side of the euro."