The euro is in deep trouble. The common currency of the European Union is losing its clout and is hence become a growing problem.

The issue, which was economic in nature, has now graduated into a full-blown political crisis with many of EU’s member states torn between supporting regional integrity and protecting their respective ailing economies.

This is exactly what the leading credit agency, Moody’s, has pointed out. By lowering its outlook for the European Union’s ‘AAA’ rating to ‘negative’, the agency has warned the geo-economic bloc of the lurking dangers of soaring budget deficits and inflationary trends. This warning needs to be heeded by the 17-member states of the eurozone and Britain, so that they can evolve a mechanism to save the continent from financial abyss.

The problem that EU faces is not merely associated with the strength of the currency or its market viability, but with the lack of backup support the euro should expect from the member states. Owing to incoherent policies and absence of collective regulations, the euro stands battered.

The monetary crisis in the wake of the 2008 Wall Street fiasco has just cemented the impression that domestic issues take precedence over international consolation measures.

The fear expressed by the Moody’s is that if major member states — Germany, France, the Netherlands and Britain — were to default on their debt obligations, the euro will not survive.

The recent downgrading of some of the major economies of Europe has come close on the heels of a similar treatment to the United States, that was demoted to ‘A’ status from ‘A-Plus’.

The point is Washington failed to keep up with its stimulus and growth package, and Europe failed at regional integration. This crisis of confidence from Athens to Washington is in need of a new transnational policy perspective that should be implemented in letter and spirit.