Goodbye to the Euro ? and the EU ?

[otago]

What an absolute mess the Euro is, how on earth did so many countries with different political systems believe it was ever going to work ?
No wonder Sweden and Switzerland are sitting back feeling rather smug.

Unless Europe had political unification with President Blair running things a same currency could never work.

So what happens after the Euro falls over over ? a new Northern Europe+Nordic Euro ?
What is the price to the EU if the Euro goes T*** up ?

http://www.telegraph.co.uk/finance/financialcrisis/

 

[wilycoyote]

The EU is a decent idea... the euro was always doomed to fail.

 

[kramerfan86]

Euro wasnt a bad idea, letting so many countries in was.

 

[wilycoyote]

Euro wasnt a bad idea, letting so many countries in was.

Without full economic integration, it couldn't work.

 

[anandus]

What an absolute mess the Euro is, how on earth did so many countries with different political systems believe it was ever going to work ?
No wonder Sweden and Switzerland are sitting back feeling rather smug.

You mean the same Switzerland that had to peg their Franc to the euro?

In my country there's a party that's highly euroskeptical. They had a report (PDF, English) made to see if my country would be better off or not in the euro, it was presented yesterday.

I've read the report and it was simply put quite awfully made. Or creativily made. Depending how you look at it.
There are some very decent parts in the report, such as the very well and thoroughly described fundamental flaws which led up to the eurocrisis.

But they really had to stretch very far with highly selective examples (with incomparable economic situations), a selective period (not even covering the whole euro-period) and sometimes even simply had to make stuff up to 'prove' that my country was worse off inside the euro than outside the euro. Also the omitance of certain parts and the exaggeration of other makes it a lobsided and incomplete report.

Next to that there was a complete lack of knowledge of the economics and the history of the economics in my country*. Also the report is completely unaware that the currency in my country has been pegged to the D-Mark for the complete post WW2-period.

My conclusion is basically that if they had to go that far to 'prove' that it'd be best for my country to leave the euro or to stay in the euro then it's quite obvious that my country is best in the euro.

But mind you, I'm from the Netherlands, which is a country that is highly dependent on trade and thus easily profits from the euro. I can imagine that this could be different for other countries.

(* the most ironic example was that the report mentioned a period in the past as an example of a strong currency in the Netherlands, apparently completely forgetting about the economic term 'Dutch Disease' which sprang from that period).

Yes, the euro is flawed, nobody would deny that. And that's why our biggest priorities are to patch up the flaws.
As far as the EU, I see that as something different altogether and although I can imagine critique on the euro, I would found it hard to see more cons than pros for the EU.

 

[Winner]

What an absolute mess the Euro is, how on earth did so many countries with different political systems believe it was ever going to work ?

What different political system? all EU member states are parliamentary democracies.

No wonder Sweden and Switzerland are sitting back feeling rather smug.

Switzerland isn't even an EU member. Meaning, it has to comply with European laws without having a say in their creation - but whatever, if it suits them, I am cool with that.

Unless Europe had political unification with President Blair running things a same currency could never work.

Which would be a wonderful argument if perhaps you provided some rational justification for it, which you didn't.

So what happens after the Euro falls over over ? a new Northern Europe+Nordic Euro ?
What is the price to the EU if the Euro goes T*** up ?

Nothing, Euro will not fail. In the worst case scenario, Greece will leave the Eurozone and be allowed to sink to the level of a Third World country through devaluation. I assume half of young Greeks would then leave the country to live in some other EU member state and let the rest be annexed by Turkey or something

Spoiler :

(I am not being entirely serious here.)

The EU is a decent idea... the euro was always doomed to fail.

No, it wasn't and it isn't.

Euro wasnt a bad idea, letting so many countries in was.

Possibly. I don't think that either - the problem was the rules were not enforced, and the southern countries did little to improve their competitiveness. They borrowed for German rates instead.

Of course, Germany and France happily ignored the rules as well, so everybody is at fault here. Now we* need to reform the Eurozone to make it more cohesive and flexible. But that's doable.

(*- Excluding UK and the Czech Republic Confederation of Anti-Green Europhobic Provinces of Klausistan. )

 

[GoodSarmatian]

What an absolute mess the Euro is, how on earth did so many countries with different political systems believe it was ever going to work ?
No wonder Sweden and Switzerland are sitting back feeling rather smug.

It has worked fine for over a decade and it's now suffering from the inefficiency and corruption of a country that conned it's way into the Eurozone.
What we are now experiencing is not 'an absolute mess', it's a temporary crisis and the noly questions are how much money it will cost and if Greece will still have the Euro after it's over.

Unless Europe had political unification with President Blair running things a same currency could never work.

Aren't you usually making anti-American posts ? Why would you think giving Bush's viceroy significant political power in the EU would be a good idea ?

So what happens after the Euro falls over over ?

Toilet, shower, breakfast, in your preferred order.

http://www.telegraph.co.uk/finance/financialcrisis/

Oh, the Telegraph.
Why dont you go ahead and see what Fox has to say about Germany's healthcare policies while you're at it ?

 

[Snorrius]

So what happens after the Euro falls over over ? a new Northern Europe+Nordic Euro ?
What is the price to the EU if the Euro goes T*** up ?

The prophecy shall come true. EU is not viable in current form. Either it should purge itself from states with toxic economies (Eastern Europe, Spain, UK, Italy..) or it will break completely.

 

[Disgustipated]

UK has a toxic economy?

 

[Snorrius]

UK has a toxic economy?

Yes. EU is lucky UK did not adopt Euro.

 

[kronic]

It has worked fine for over a decade and it's now suffering from the inefficiency and corruption of a country that conned it's way into the Eurozone.
What we are now experiencing is not 'an absolute mess', it's a temporary crisis and the noly questions are how much money it will cost and if Greece will still have the Euro after it's over.

Err, if you think that a very small country like Greece is the cause of the Euro's problems, then you must have missed a lot over the past few years.

 

[Arwon]

There's some issues at the margins of the Euro but the core zone will keep using it. Can anyone see any reason for, say, France, Germany and the Netherlands to suddenly not use the same currency any more?

 

[kronic]

There's some issues at the margins of the Euro but the core zone will keep using it. Can anyone see any reason for, say, France, Germany and the Netherlands to suddenly not use the same currency any more?

Of course. The French economy is neither like the German/Dutch economies nor like the Southern economies. Generally, it is rather balanced but has lost out a bit against the Northern economies over the past years. The detoriation of the French current account balance speaks volumes about it. So do bond rates, unemployment and other indicators. If Southern Europe leaves, France will have to decide if it wants to stay in one boat with the Germans et al. or if it wants to lead Southern Europe. There are points to be made for either side. A Hollande victory in the French elections next month may change the odds.

 

[GoodSarmatian]

Err, if you think that a very small country like Greece is the cause of the Euro's problems, then you must have missed a lot over the past few years.

The current panic about the Euro is caused by the Greek unpleasantness, and it's blown out of proportion.
I don't really see any problems that can't be solved with new treaties or modifications to existing ones.

 

[Leoreth]

A Hollande victory in the French elections next month may change the odds.

I'm curious to hear what direction you think it will take them (and maybe, the rest of the Eurozone subsequently?).

As for the OP, it's quite unfortunate because there's not much substance to discuss (and anandus already beat me to my snarky remark regarding the Swiss ). But I think I will have to repeat what I say in all of these threads, that EU and Eurozone are not identical and that the former can continue to exist without everyone being a member of the latter. Not that I consider a breakup of the Eurozone all that likely anyway.

 

[Harvin87]

I have an account with US-Dollars in it... everyday I pray the euro collapses and I get rich with my saved dollars... is that possible? please tell me yes.

 

[Snorrius]

Harvin87, I think you have a chance for a moment of euphoria as euro should collapse before dollar.

 

[Harvin87]

So, it is possible?

 

[kronic]

Depends on how much you pay in. If you think you can buy much with a few thousands USD, then probably not.

Also, is it an account with a German bank in Germany? If so, your deposits will almost certainly get converted into Euros in the event of a Euro crash (Zwangskonvertierung). Check the general terms and conditions of that account carefully.

 

[Part_Time_Civer]

I have an account with US-Dollars in it... everyday I pray the euro collapses and I get rich with my saved dollars... is that possible? please tell me yes.

Sorry Harvin, that's not quite possible.
If the Euro collapses (possible, though unlikely in my view) then your dollars will be worth a lot of euros, but not any more purchasing power than right now. It would be like owning a zillion Reichsmark in the Weimar Republic and being able to buy just an egg. Of course you would be better than other Germans who have their savings in Euros.

What you can do is buy call options on dollars (which might not be a bad idea, because if/when Israel attacks Iran everyone will 'flee into the dollar').

Edit: of course you're savings are worth more than an egg