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The Euro


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#1    Tommy

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Posted 01 January 2002 - 09:04 PM

                                                      Just feeling topical at the moment; so I thought all you Europeans out there would like to know what you’re getting yourselves into with this new currency… ohmy.gif tongue.gif    

http://www.guardian.co.uk/elsewhere/journa...,618987,00.html

(notice how it is the British dermatologists who find this stuff out - must be our last rational argument for not joining) whistling.gif


Tommy   (anti-Euro btw)
                                                      

Edited by Tommy, 13 June 2003 - 11:27 PM.

"Superstition created all the gods and angels, all the devils and ghosts, all the witches, demons and goblins, gave us all the augurs, soothsayers and prophets, filled the heavens with signs and wonders, broke the chain of cause and effect, and wrote the history of man in miracles and lies" ~ Robert Green Ingersoll

#2    odinsupreme

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Posted 01 January 2002 - 09:39 PM

Tommy,

The dutch Gulden was a coin that was/is always made of Nickel. There were never any problems so that is nonsens.

And why are you anti-euro? Okay, a stable pound has to be changed into a stable Euro... I almost can't find any arguments against the Euro.

Odin Supreme 8)


#3    Homer

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Posted 02 January 2002 - 05:56 AM

Odin,

I'm not European, but I have studied this topic for years. This debate has been around for almost 100 years and it has nothing to do with the Euro specifically but what it represents. Since before World War One, many European nations have discussed joining into a super-state. Sort of a United States of Europe, utilizing not only the same currency but the same laws, military, government, education system etc. Quite literally being of the same nation and having only regional borders like the U.S.

Germany and France, the two strongest continental European countries have been working diligently on creating not only this currency but a rapid reaction military force, which would, they envision, replace not only NATO, but the individual European nations' military. In effect, undermining their national sovereignty.

To decrease and eventually dissolve national sovereignty is not some sort of paranoid view of a government conspiracy, but an actual long term plan that no European government that backs the Euro denies. They insist it's the only way to make Europe a superpower both financially and militarily, thereby never again needing outside help to settle regional 'differences'.

Besides Germany and France, many smaller nations embrace this concept as a way to compete better economically, since their currency was considerably weaker.

Although not speaking for Tommy(I think I said that before), the British have ALWAYS been the most vocal about their concerns regarding the loss of their sovereignty. Again, this arguement has been around for close to 100 years.

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#4    Tommy

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Posted 02 January 2002 - 06:10 PM

Oh boy…ok, here’s a little essay I’ve just whipped up concerning Euro membership primarily from a British perspective... :D


Although I don’t know about European integration pre WW1, the preamble of the European Coal and Steel Community (ECSC) in the early 50s set out “ to establish…the foundation of a broad and independent community among the peoples long divided by bloody conflicts and to lay the basis of institutions capable of giving direction to their future common destiny.”  

Odin, there are many pros AND cons of Euro membership, each issue obviously varying with the respective country.   I will try to put forward both sides of the argument…I should also say that some of these points are only relevant to the UK. The fact is that the economic arguments (as well as the political ones put forward by Homer) for us not joining the single currency are sound for the meantime.

Starting with the disadvantages

a) A main concern for the UK voter is the transfer of sovereignty both political and economical.  Economically, we (and the rest of Europe) would see the transfer of monetary policy (interest rates) to the European Central Bank (ECB) in Brussels.

Problems with this….

- The ECB is unelected, and therefore not democratically accountable.  That having been said, since 1997, it has been the Bank of England who controls monetary policy here, and are also unelected, so no big changes there except for the nationality of the employees.  

-The giving up of our national currency in place of a Single European one works on the premise that ‘one size fits all’, when one size clearly doesn’t fit all.  A country with high inflation would want to raise interest rates (people save more and spend less, investment falls, people borrow less and so spend less, mortgage holders have higher interest payments to deal with, more expensive to buy on credit, etc…) and vice-versa for a country with high unemployment.
     
Carrying on from there, different countries have different macro-economic policy preferences (levels of employment, inflation, economic growth, balance of payments, poverty and inequality) for which interest rates are a useful tool to influence, but obviously won’t be able to.  


b)    Current UK interest rate close to 4.0%  
       Euroland interest rates are about 3.2%


The UK would have to drastically cut interest rates in order to join the Euro. This is likely to lead to inflationary pressure along with uncompetitive exports, as our goods would be (as usual) relatively more expensive than competitors. Among other things, this would lead to, rising unemployment, and so the Government would want to raise the interest rate, which it will not be able to do.


c) The initial cost of setting the whole scheme up in the first place would be/is massive. From everything like shop owners and vending machines, to pc software and education…this transfer will be present in all aspects of your life.  Estimates of the changeover have been as high as £30 billion. But it’s anyone’s guess what the real figure of the transaction might be but the figure will be high…(in the Netherlands alone, the cost is calculated to be around £3.2 billion.)

http://news.bbc.co.u...000/1664312.stm


d)  Going through a recession, the country won’t be able to devalue its currency.

Usually, there would be 2 alternatives to this…

i) Labour should be mobile around Europe and so the unemployed would move to an area of higher employment, HOWEVER   there are language barriers all around Europe.

ii) Wages should be flexible downwards, solving the unemployment problem, HOWEVER, wages are not flexible downwards, not least because of Trade Unions and the Minimum wage. :-/

Therefore, if there is a likelihood of a country suffering from asymmetric shock (effects only 1 country) then there is a real problem associated with single currency membership.  

The fact is that the British love their pound sterling. :D It’s been with us since the late 18th Century and we want to keep it.  We as a Nation seem have a hard time accepting this ongoing evolutionary process of change within the European context. In fact, sharing a common language, the UK arguably has a closer association with the US than Europe.  


Tommy    

"Superstition created all the gods and angels, all the devils and ghosts, all the witches, demons and goblins, gave us all the augurs, soothsayers and prophets, filled the heavens with signs and wonders, broke the chain of cause and effect, and wrote the history of man in miracles and lies" ~ Robert Green Ingersoll

#5    Tommy

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Posted 02 January 2002 - 06:12 PM

Unfortunately for the sterling loving people of Britain, our Prime Minister has made it ambiguously clear* where he stands with the single currency.  The party ideology is all in favour of joining the Euro, and further integration into Europe, the only thing stopping him is the overwhelming resistance from the electorate.  Blair knows that if he holds a referendum on the Euro at the moment or in the near-distant future, he will lose it, causing great humiliation to the Government; and so while in his heart he is very pro-European, his public view is a more diluted message.

Indeed the Chancellor of the Exchequer, Gordon Brown in 1998 set ‘5 economic tests’ that were to be met before Britain joins the Euro.

These tests are, as expected, ambiguous and it wouldn’t be too hard for the government to manipulate the results.

From  http://www.bostockb.freeserve.co.uk/newsviews/pubmeet/eurodebate.htm, the tests are…

“1. Are business cycles and economic structures compatible so that we could live comfortably with Euro interest rates on a permanent basis?

2. If problems emerge is there sufficient flexibility to deal with them?

3. Would joining the monetary union create better conditions for firms making long-term decisions to invest in Britain?

4. What impact would entry have on Britain's financial services industry, especially the city?

5. Will joining the Euro promote higher growth, stability and a lasting increase in jobs? ”


Now clearly these can be met any time the Government wishes, and the Government’s website at http://www.labour.org.uk/ it even states:

“In principle we are in favour of joining the single currency – but we would only recommend entry if Britain meets Labour’s five economic tests. An assessment of these tests will be made early in the next parliament. If Government and Parliament recommend entry we guarantee that the decision whether to join or not will be with the British people.”

While we may be against the move now, the Government hopes that we will eventually join the Euro.  This further integration into the European Union means further devolution of power from West Minster to the institutions of the EU; resulting in more and more of our political decisions, as well as economic ones, will be decided by people unelected by the domestic electorate.    

Links:  

http://news.bbc.co.u...000/1664312.stm

http://www.cml.org.uk/pdf/hsgmkteu.pdf

http://www.ex.ac.uk/...rian/llyfr.html

http://www.europarl....ide/GEPmain.htm

You can see what the Euro money looks like here..   http://www.knowital.com/sitewide/html/euro/about_the_euro1.html

*ambiguously clear – as in it is clear that he is ambiguous on issues concerning the euro.


Tommy   nearly done...

"Superstition created all the gods and angels, all the devils and ghosts, all the witches, demons and goblins, gave us all the augurs, soothsayers and prophets, filled the heavens with signs and wonders, broke the chain of cause and effect, and wrote the history of man in miracles and lies" ~ Robert Green Ingersoll

#6    Tommy

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Posted 02 January 2002 - 06:17 PM

Oh, and the advantages, which I’m sure you’ll be more familiar with:

1) different currencies act as a barrier to trade… the single currency would eliminate transaction costs to firms.

2) Closer European harmony.

3) Tourists and travellers won’t waste time and money changing their money.

4) Price transparency – impossible for goods to be priced differently in different countries.

5) A single currency is a logical conclusion from the single market.

Hope this helps you realise that there are deeper implications to the Euro than some might think. :D ::)


  Tommy       ...tired  

"Superstition created all the gods and angels, all the devils and ghosts, all the witches, demons and goblins, gave us all the augurs, soothsayers and prophets, filled the heavens with signs and wonders, broke the chain of cause and effect, and wrote the history of man in miracles and lies" ~ Robert Green Ingersoll

#7    odinsupreme

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Posted 04 January 2002 - 10:23 PM

Tommy,

THAT WAS A LOOOOOOOOOONG POST!

Uhm, you said that the Pound is used since the end of the 18th century, wll, the dutch gulden (also known as the Florijn) was used for almost 800 years..

The Netherlands have one of the most solid economics of the world and they had to make changes.

The British are known as people who stay on their island and only take care of their own business (i don't mean to offend you..) Not as extremely as the Swiss but still.

Homer,

The French always wanted one currency so that Germany could't get strong again to start another World War.

The French currency isn't as strong as a lot of others so that is also not true (well, it is half true).



Odin Supreme 8)


#8    Homer

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Posted 04 January 2002 - 10:57 PM

Odin,
I totally agree with your reply to me. That is what I meant. Since before the beginning of the 20th century, the French have been afraid of Germany. This European unity is a way of France, among other countries, to have some sort of equality with Germany. As for the Germans, a unified Europe would ensure no outside interferance. As everyone knows, without outside interferance, France wouldn't even exist. I also agree with you when you stated the French currency isn't that strong(in comparison to other G-7 nations)

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#9    odinsupreme

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Posted 04 January 2002 - 11:14 PM

Now we are at the G-7 countries, why are those countries the G-7? Japan's economy si collapsing. France isn't very strong, Italia isn't that powerfull... I think that they have to update the G-7.

Odin SUpreme 8)


#10    Homer

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Posted 04 January 2002 - 11:40 PM

There was a worldwide recession that never completely recovered, which accounts for most of the 'rich' nations slumping. Japan's economy is much different. They had an unrealistic bubble economy during the 80's caused by in part by their interest rate and trade practices.

However Japan still commands the second largest economy in the world, and the other member nations of G-7, although going through tough times, still are far above the other nations in terms of wealth. For example, we hear a lot about China's growing economy, but for a variety of reasons, their economy is a lot weaker than the G-7 members, and much larger than many nations that are not G-7. Although the disparity between member and non-member nations are decreasing, it's still evident that the disparity exists.

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#11    Tommy

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Posted 05 January 2002 - 09:39 AM

"I think that they have to update the G-7."



LoL Odin, aren't you forgetting Russia as a part of the group, making it the G-8?


Tommy  

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#12    odinsupreme

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Posted 05 January 2002 - 10:06 AM

Tommy,

That's my point! :D

Well, They are not really one of the G-7 they just are also in the G-8 because te other countries were affraid of them because they had nukes.

Homer,

I am from The Nethelands, as you already know, and our economy is one of the best of the world, or productivity is one of the highest o the world. We only can't join because our country is too small, that isn't really fair is it?

Odin Supreme 8)


#13    Homer

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Posted 05 January 2002 - 09:41 PM

Tommy,
To expand on what Odin stated, Russia was invited into the club for political purposes. After the collapse of the Soviet Union, many former Warsaw-Pact countries were scrambling to become a part of NATO and the EU. To prevent further isolation, and to acknowledge their military strength(although it has been weakened drastically), the Russians have been included into the club. However, due to having no real economy, the Russians have no real influence.

Odin,
The Netherlands has a high per-capita economy. But in terms of total output of goods and services, it ranks well below the G-7. Like you said, it's because it's a small country. With total revenue, the Netherlands ranks in the top 15 of all nations(I don't have exact figures), and considering their size in terms of land and population, that's quite remarkable.

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#14    odinsupreme

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Posted 05 January 2002 - 10:16 PM

image

This is NL!!!! And in the right corner at the bottem is Bocholtz (of NL offcourse 25 KM away from Maastricht)

Odin Supreme


#15    Homer

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Posted 05 January 2002 - 10:30 PM

Outstanding!
I have been off the coast of NL, but never had the pleasure of going ashore. Too bad, because I was looking forward to it.

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