The unravelling of Colonel Muammar Gaddafi's regime has given European leaders a fair number of reasons to sweat over their once close relations with the former Libyan government.

Alongside his investments and hydrocarbon deals, Gaddafi had one obsession that could cause yet more discomfort north of the Mediterranean.


Alongside his grander proclamations about the creation of some sort of 'United States of Africa', Gaddafi championed the creation of a single African currency, a cause that remains on the agenda of the African Union, albeit on a very long and presumably flexible timescale.


With regional integration having arrived on the title pages of development literature, closer cooperation on infrastructure, trade and customs has been on continental and regional agendas. Customs unions and eventually currency unions are seen as the endgames of these processes.


Already something of a pipe dream, the viability of monetary integration and the reality of its economic benefits have been tested severely by the current European crisis. Europe's troubles underline the difficulties of running a currency union in a multiple-speed economic area. Greece in particular, but also Ireland, Portugal, Spain and Italy, benefited from the security of membership and borrowed far beyond their ability to repay. Now, they are unable to resort to their historic strategy of competitive currency devaluations.


The European Central Bank, already uncomfortable with the demands made on it to participate in a variety of crisis-management mechanisms, has reverted to repeating a mantra that its mandate is to control inflation within the euro zone. It has been raising interest rates slowly – not fast enough for Germany, which has been returning to growth, but far too fast for the periphery.

While Germany sought to benefit from the union because its neighbours could not devalue their currencies and undercut its 'Mittelstand' of small and medium-sized exporters, the country now faces the prospect of footing the bill for its competitiveness gains through billions of euros of bailout funds, an urgent recapitalisation of its own and other European banks, and through arrested growth in the euro zone.


The adoption of the euro and the whole vision of the EU has delivered considerable benefits for member states. However, the travelling circus of emergency meetings, quick liquidity fixes for solvency problems and political brinkmanship are a clear warning for African advocates to be absolutely certain of achieving convergence before, not after, adoption. Greece, certainly, did not meet the euro entry requirements and there are weak mechanisms for managing capital and fiscal imbalances within the zone.


As Razia Khan, Standard Chartered's head of research for Africa, points out, economic convergence in Africa's regions is still a distant prospect. Since the conversations about monetary union began in the Economic Community of West African States in the 1970s, when Nigeria and Ghana together made up about 85percent of the zone's GDP, that imbalance has probably worsened. In the East African Community, intra-regional trade at least points to the possibility of a workable union, but the momentum does not seem to be there.


In Southern Africa, appetite also waning. South Africa has already had to commit to a bailout in Swaziland. As Khan says: "They would have to be a lot more comfortable with the positions of other Southern African countries before there is any willingness on their part to proceed with the single currency. That's very much on the back burner."


Helmut Kohl, the German chancellor and architect of the euro, believed the single currency would drive the integration that should, in theory, have underpinned the EU from the beginning. In a distinctly tangled way, he could have been right, as the eurozone now stands at a sink-or-swim moment – either push forward towards fiscal union or fall back into factionalism. However, that process continues to be painful, and the fallout from it threatens to push the world back towards recession. Africa perhaps has the chance to benefit from Europe's hindsight.