The Euro Experiment

Mallotum_X

One thing that a few pepole have said to me recently has been that were the policy makers so stupid to think that the Euro would work.

The crisis at the moment gives them evidence of stupid policy makers, but is the truth a little more complex.

I dont really believe that the economists, bankers, policy makers etc etc were so stupod to think the Euro would survive any problem, (although I doubt they expected this)

I think they always knew that a single currency can only work when you have a united economic policy for the area under control. Is that really where we are heading, a single currency with single policy - the Germans and French appear to think so perhaps.

But how do you get single economic policy without political union, or at the very least a much closer political union, The USA manages Federal and State policies on tax and various other matters - is that really where we may be ending up?

And if we did start to go down that route, would it really be a bad thing, its clear this half way house approach doesnt work that well, to unwind the EU would not be anywhere near as easy as some would suggest when people say lets pull out - If we left would the EU really allow us the benefits of free trade with it - somehow I doubt it.

Cameron, Clegg and Co appear to want to stay in the EU, with the Tory party allowing the Euro skeptics some voice, but is that simply to keep their voters sweet, especialy as UKIP doesnt really offer any kind of realistic alternative, not with teh current voting system anyway.

So where next?

I cant see the Euro totally failing over the current problems, and I dont think Greece will leave the Euro (after all the US Dollar is the effective currency in a whole pile of other places than the USA). The longer the current roblems can be stretched out without collapse the more chance of pulling things back under control.

After that I'm not entrirely sure what I think will happen, there are too many possible options, I do think at some point the UK will have to decide whether we are in or out, and i dont think we will be allowed to be "in but only on our terms".

Hopefully imo the expansion of the EU will slow/stop whilst everyone catches up and sorts out the Currency/Policy/politics of it all.

nomobel

Your assessment is much more thoughtful than what I have found so far in the UK's mass media (Daily Mail, Telegraph and the empires controlled by Mr Murdoch and Mr Diamond). I think the Euro zone will adjust and the Euro will survive. It is much better to be in the Euro zone, reaseon why Poland, Iceland, Croatia and others want to join.

A._Badger

nomobel wrote: »

Your assessment is much more thoughtful than what I have found so far in the UK's mass media (Daily Mail, Telegraph and the empires controlled by Mr Murdoch and Mr Diamond). I think the Euro zone will adjust and the Euro will survive. It is much better to be in the Euro zone, reaseon why Poland, Iceland, Croatia and others want to join.

They want to join because they are poor countries who think they will benefit from association with stronger economies. The fact that they are so keen to belong should be all the warning you need.

The Euro was utterly doomed from the start. What idiot thinks shackling a racehorse and a carthorse to the same wagon could ever result in anything other than an upturned cart?

nomobel

@ A. Badger What a simple insular thought. Euro zone countries like Austria, Belgium, Finland, Netherlands and Germany have their lowest unemployment rate in more than a decade while Britain enjoys the highest unemployment rate in 17 years. If Britain had joined the Euro higher Central Bank interest rates would have helped to tame Britain's real estate bubble and subsequent mortgage crisis.

You can't built an economy of a country of 60 million people on Casino style banking. Wake up to reality!

A._Badger

nomobel wrote: »

@ A. Badger What a simple insular thought. Euro zone countries like Austria, Belgium, Finland, Netherlands and Germany have their lowest unemployment rate in more than a decade while Britain enjoys the highest unemployment rate in 17 years. If Britain had joined the Euro higher Central Bank interest rates would have helped to tame Britain's real estate bubble and subsequent mortgage crisis.

You can't built an economy of a country of 60 million people on Casino style banking. Wake up to reality!

That is not reality. It is sheer twaddle. Precisely as predicted by grown-ups, the strong economies of (mostly) Northern Europe set economic policies and interest rates to suit themselves and have effectively crippled the (mostly) Southern economies, bankrupting countries and throwing populations into poverty.

Still, it's always reassuring to find the one true believer left when all his former fellow travellers have shuffled away, pretending they never really believed in it in the first place.

Keep whistling. The dark hasn't gone yet.

Mrs_Bones

nomobel wrote: »

@ A. Badger What a simple insular thought. Euro zone countries like Austria, Belgium, Finland, Netherlands and Germany have their lowest unemployment rate in more than a decade while Britain enjoys the highest unemployment rate in 17 years. If Britain had joined the Euro higher Central Bank interest rates would have helped to tame Britain's real estate bubble and subsequent mortgage crisis.

You can't built an economy of a country of 60 million people on Casino style banking. Wake up to reality!

What about the unemployment rates of Spain, France, Greece, Ireland, Italy to name just a few, all who have higher unemployment rates than the UK. You can't just pick a few countries and hold them up as being better than our figures so joining the rest of the EU must be a good idea. Neither life or the EU works like that.

You wake up to reality, go and talk to some Greeks, Spaniards or Italians ask them what economic miracles being part of the EU has brought them, only do it if you've got a broad mind where bad language is concerned though, protective armour might be an idea when asking the Greeks.

nomobel

Mrs_Bones wrote: »

What about the unemployment rates of Spain, France, Greece, Ireland, Italy to name just a few, all who have higher unemployment rates than the UK. You can't just pick a few countries and hold them up as being better than our figures so joining the rest of the EU must be a good idea. Neither life or the EU works like that.

You wake up to reality, go and talk to some Greeks, Spaniards or Italians ask them what economic miracles being part of the EU has brought them, only do it if you've got a broad mind where bad language is concerned though, protective armour might be an idea when asking the Greeks.

Thanks for that. That is exactly what I am trying to highlight (BTW, most British tabloids and contributions on these boards just pick a few economies to make one sided statements). The so called "Euro-crisis" is not a currency crisis but a problem of a number of economies that have lost competitiveness, are indebted and as a consequence have raising unemployment. These economies exist within the Euro zone (e.g. Greece, Spain, Italy) as well as outside the Euro-zone (e.g. Japan, the UK and the USA).

Degenerate

nomobel wrote: »

If Britain had joined the Euro higher Central Bank interest rates would have helped to tame Britain's real estate bubble and subsequent mortgage crisis.

Like they did in Ireland?

You're spectacularly wrong here. ECB interest rates were significantly lower that BOE rates through all the boom years leading up to the crisis. That's why Ireland's property bubble went so mental.

TruckerT

The Common Market, later known as the EU, was an experiment whose main intention was to preserve peace in Europe

Maybe the experiment of the Euro was 'A Bridge Too Far'

TruckerT

purch

If Britain had joined the Euro higher Central Bank interest rates would have helped to tame Britain's real estate bubble and subsequent mortgage crisis.

Can you list the number of times in the last 11 years that the ECB "Base Rate" has been higher than the BOE Base Rate ?

It won't be a long list :eek:

Loughton_Monkey

I well remember the talk at the time, that currency was far too "intimate" to sell down the river. This has now become reality. It's bad enough having to toe the line on the straightness of cucumbers, the limits on variety of apples, and the inability of UK to avoid having to have Health & Safety, Smoking, etc. legislation.

In a sense, I view it the same as Wales/Scotland. They are in a 'union' with the UK and as such are part of a 'single currency' (the £ Sterling). As countries, they are powerless to control their own economy and hence have to rely on 'subsidies' from the UK government. Just imagine the difference if, say, the Scottish pound had been able to float many, many, years ago. I cannot predict whether they would have been richer or poorer, but either way, it would have created a "true market" between the two countries.

This is one reason why Scottish independence is about the biggest national suicide mission ever (if agreed). Never, never, never, become independent without having full control of your currency. If the Greeks still had the drachma, they would be rolling in money now. They would have devalued, but tourists would be flocking and their olive oil/retsina would be selling like hot cakes.