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[P]
Whither the Euro?

By Mister B in Culture
Wed Jan 02, 2002 at 01:59:54 PM EST
Tags: Culture (all tags)
Culture

Now that the clock stuck midnight in Europe, what will become of the countries that adopted the Euro as their official currency?


I, for one, have a few questions as to the benefit of the Euro - specifically directed toward those living in Euro-adopting countries, although I am interested in all input.

1) Do you think the adoption of the Euro is a good decision by the leaders of the 12 countries adopting the currency?

2) Do you think the adoption of the Euro means the elimination of a portion of the culture of each of the 12 adopting countries? I, for one, appreciated the unique currencies of the countries of Europe.

3) Could the Euro topple the dollar as the most-powerful currency in the world?

Here's to an interesting discussion... Happy New Year's to all!

-Mister B

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Whither the Euro? | 85 comments (82 topical, 3 editorial, 0 hidden)
Cultures must compete with each other.... (2.57 / 7) (#1)
by grout on Mon Dec 31, 2001 at 08:56:32 PM EST

... and a culture that falls too far behind will end up losing all of its culture anyway. So I don't weep for the doomed European currencies.
--
Chip Salzenberg, Free-Floating Agent of Chaos

A silly question, but... (3.25 / 8) (#2)
by molybdenum on Mon Dec 31, 2001 at 09:58:28 PM EST

...(and I just thought of this) is there an offical name for the fractional part of the Euro?

Ben

Cent (NT) (4.00 / 5) (#3)
by MotorMachineMercenary on Mon Dec 31, 2001 at 10:09:46 PM EST


My bodyweight is muscle and cock MMM
Tenured K5 uberdouchebag Herr mirleid
Meatgazer Frau gr3y


[ Parent ]
Excepted in France (3.00 / 2) (#70)
by linca on Thu Jan 03, 2002 at 08:37:19 AM EST

It will be called centime here. Our Académie Française didn't like the cent (pronounced like in english) and cent in French means a hundred

[ Parent ]
What about ... (1.66 / 3) (#12)
by ragnarok on Tue Jan 01, 2002 at 06:23:39 AM EST

the Jenital? A silly question, true.

A very silly question.
"And it came to healed until all the gift and pow, I, the Lord, to divide; wherefore behold, all yea, I was left alone....", Joseph Smith's evil twin sister's prophecies
[ Parent ]

Yep - euro cents... (4.00 / 2) (#26)
by nickwkg on Wed Jan 02, 2002 at 10:25:38 AM EST

100 euro cents make up one euro. They come in 1, 2, 5, 10, 20 and 50 denominations.

[ Parent ]
Currencies and Culture? (2.75 / 4) (#5)
by tomte on Mon Dec 31, 2001 at 10:51:05 PM EST

I always thought it a significant part of a culture to have a currency; but which currency is irrelevant, isn't it?
So the benefits outwheigh any loss that may be felt here and there....
--
Funny. There's a brightness dial on the monitor, but the users don't get any smarter.
Heh. (3.88 / 9) (#6)
by valeko on Mon Dec 31, 2001 at 11:19:13 PM EST

Well, I don't think the Euro, as far as its economic reinforcement and consolidation implications for Europe as a distinct economic power, is in the interest of the United States.

It was kind of interesting that nobody in the US seemed to care much about the Euro, and then suddenly as this New Year's approached and opposition solidified, suddenly prominent newspapers were printing nostalgic goodbyes to currency with spirit, like the franc. I saw a rather tearful recollection of how wonderful the franc was in the form of an NY Times column - quite the last thing you'd expect to see here. Nobody gives an arse about how wonderful European currency is or how it is an expression of national character until they realise that this is bad for goals of economic stewardship. :-)


"Hey, what's sanity got going for it anyways?" -- infinitera, on matters of the heart

The Euro won't affect culture (3.25 / 4) (#7)
by chipuni on Mon Dec 31, 2001 at 11:20:09 PM EST

I strongly believe that the Euro won't change culture significantly. The European countries will share a little more between them, but that's it.

Saying that the Euro will homogenize European cultures is exactly like saying that dollarization has homogenized South American cultures.
--
Perfection is not reached when nothing more can be added, but only when nothing more can be taken away.
Wisdom for short attention spans.

US Dollar most powerful? (3.14 / 7) (#8)
by martman on Tue Jan 01, 2002 at 01:08:57 AM EST

I'm not terribly knowledgable when it comes to economics, it's simply not my area of expertise and i trust my accountant to do it for me. But, that said, I was under the impression that the British pound sterling was more powerful than the US dollar and has always been. Is this view incorrect? If so could someone explain to me why this is since one pound fetches more than one dollar in exchange? Perhaps I'm looking at it too simplistically.

"Everybody wants to save the earth; nobody wants to help Mom do the dishes."
--P. J. O'Rourke

Not buying power, political power. (2.00 / 3) (#10)
by scanman on Tue Jan 01, 2002 at 04:06:53 AM EST


"[You are] a narrow-minded moron [and] a complete loser." - David Quartz
"scanman: The moron." - ucblockhead
"I prefer the term 'lifeskills impaired'" - Inoshiro

[ Parent ]

That's not the point (4.50 / 4) (#15)
by greenrd on Tue Jan 01, 2002 at 08:08:03 AM EST

could someone explain to me why this is since one pound fetches more than one dollar in exchange?

That really doesn't matter very much. One yen is worth a lot less than one dollar, but that in itself doesn't tell you much. To see the fallacy of your argument, consider: "The US dollar is 100 times more valuable than the cent, therefore the US currency is 100 times stronger than the US currency." Nonsensical.

As to what "stronger currency" actually means - better wait for an economist to reply.


"Capitalism is the absurd belief that the worst of men, for the worst of reasons, will somehow work for the benefit of us all." -- John Maynard Keynes
[ Parent ]

thanks for clearing that up (none / 0) (#53)
by martman on Wed Jan 02, 2002 at 09:33:12 PM EST

I think i understand your point. It does make a lot of sense. I guess i'll go off and study a bit of economics then, with that in mind. (Hello Google!)

"Everybody wants to save the earth; nobody wants to help Mom do the dishes."
--P. J. O'Rourke

[ Parent ]
Answers from an Economist (3.00 / 5) (#13)
by si on Tue Jan 01, 2002 at 06:42:35 AM EST

Firstly, Happy New Year everybody! I am a British Economics Student, and I am a strong supporter of the Euro, even though the UK hasn't joined yet. I believe it its a good decision for the 12 countries, but your point about elimination of individual currency and history is significant. That is one of the reasons why Britain hasn't joined, because Britons are so patriotic about their currency and dislike mainland Europe. It will strengthen trade enormously on the Continent, which is why Britain (and Denmark and Sweden) need to join soon, to avoid being left out.

As for overtaking the dollar, I don't think it will, but it will probably be on par with it, but more people, in the long run will use Euros than Dollars, because Europe is larger.

Not currency per se, it's independence at stake (3.66 / 3) (#32)
by qmacro on Wed Jan 02, 2002 at 03:11:52 PM EST

To say that we're against joining because we're patriotic about our currency is rather strange, IMHO. Especially coming from an economist.

It's not the currency per se (as many people have already said - there's not much culture tied up as most people think or would like to think), rather it's the _control_ and _independence_ that we'll lose if we join.

It's bad enough being dictated to by faceless beaurocrats in Brussels; do we want someone in Europe controlling our interest rates and influencing our financial policies as well?

No thanks!

(P.S. I've lived and worked in many parts of Europe over the last 10 years, so I'm not yer typical "Insel-Affe" either ;-)

Oh, and Happy New Year too!

[ Parent ]
Patriotism or not (4.00 / 2) (#42)
by si on Wed Jan 02, 2002 at 04:48:39 PM EST

Many of the people I know are opposed to it purely on patriotic grounds. I am all for the Euro, but some people cannot let go. As for these 'faceless bureaucrats' - do you know the governors of the Bank of England? No one elects them, which is the same as the ECB, so why should we trust BoE governors and not ECB Governors? I agree the ECB governors have to think on a more general wavelength to suit all 12 countries, but realistically, either way, our interest rates and money supply are controlled by unknown people, in or out of the Euro.

[ Parent ]
Euro vs. Dollar (3.41 / 12) (#14)
by lucas on Tue Jan 01, 2002 at 06:43:28 AM EST

The reason the dollar is the highest is because of perceived value of it. Intrinsically, it is just paper.

Perceived value comes with age and performance history over time. As an example, the United States is the oldest government to have *never* defaulted on a bond payment.

Most American hard cash (printed paper money) lies in Russia because of this. People horde dollars, even going to the ridiculous length of ironing them out to keep them crisp.

People also have to trust the government for the money to have value. Most people trust the Fed to control monetary policy... to contract the money supply when necessary and expand it with repurchase agreements (repo's).

The Euro doesn't have value just yet aside from what is on paper. The people have to trust that the Euro will go in the right direction and actually see performance.

The real way to tell whether or not the dollar will continue to be the standard is if you find yourself (as an American) holding or storing Euros in the next 15 to 20 years.

I suspect the dollar will survive on since Americans are a nation of consumers whose lives and wellbeing depend on the economy and making money grow. Whether it is from your savings/money market account to your 401(k) to your IRA to your stock options, you are participating in this process. Unless you hold cash in a mattress and eat what you produce on a farm, it's almost impossible not to participate.

complete lie (3.75 / 4) (#24)
by streetlawyer on Wed Jan 02, 2002 at 07:53:29 AM EST

As an example, the United States is the oldest government to have *never* defaulted on a bond payment.

Untrue; the only G7 government which has never defaulted on its external debt is Japan. The Federal Government failed to honour guarantees on the debt of Mississippi, Maryland and Louisiana in the nineteenth century, which would be counted as a default by ratings agencies today.

Indeed, by your standards, the UK would beat the USA, as it has never "defaulted on a bond payment"; the only default on the part of the UK in the last three hundred years was a default on a loan (not a bond) extended by the US Treasury in the 1930s

--
Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]

Mississippi, Maryland, Missouri (none / 0) (#47)
by PresJPolk on Wed Jan 02, 2002 at 06:11:13 PM EST

Er, would these happen to be debts incurred while those areas were in rebellion, and not acting as part of the United States of America?

[ Parent ]
Missouri, Louisiana, whatever (none / 0) (#48)
by PresJPolk on Wed Jan 02, 2002 at 06:14:28 PM EST

They both qualify as random southern states in my book. :-)

[ Parent ]
OT: Missouri is not the South (none / 0) (#59)
by Freshmkr on Wed Jan 02, 2002 at 11:09:20 PM EST

OK, I know that I'm buying myself a one-way ticket to mod-down city here, but as a native St. Louisan (sure seem to be a lot here on K5, BTW), I'd like to contest the notion of Missouri as a "random southern state".

There are a few good reasons to seperate MO from the south. We were part of the Union (albeit a slave state). We're kinda north of the Ohio (or at least its terminus). But a lot of better reasons can be found in this essay, which I saw on memepool (scroll down for the pertinent entry).

Your post is also awfully dismissive. IMO, no place exists that is uninteresting or unworthy of study, especially when you can find someone who truly knows and loves it.

Ahem. Forza Euro.
--Tom

[ Parent ]

Missouri (none / 0) (#75)
by PresJPolk on Thu Jan 03, 2002 at 01:44:02 PM EST

I suppose you would have no way of knowing all the family I have from Missouri and Arkansas, so I see your point.



[ Parent ]
The debt is still owned by someone (none / 0) (#54)
by martman on Wed Jan 02, 2002 at 09:48:33 PM EST

If rebellion was an acceptable excuse for dropping a debt then it'd be a lot easier to get rid of it. Just keep 'rebelling' and subdividing after incurring a debt and forcing someone to write it off. There'd be a lot more territories and states but man would they be rich...

Internal affairs of an entity should not be the responsibility of the creditor. The initial bond agreement is presumably between the governments, not the creditor and all the people of the debtor's nation. What i'm trying to say is that though there might be mitigating circumstances for the default, or good excuses to default, in the eyes of the world it's still a default. A nation in rebellion is not going to have a great credit rating, is it?

"Everybody wants to save the earth; nobody wants to help Mom do the dishes."
--P. J. O'Rourke

[ Parent ]
CSA Debt (5.00 / 1) (#58)
by PresJPolk on Wed Jan 02, 2002 at 11:05:49 PM EST

Er, people who loan money to an organization trying to form a government should know the risks. When that organization was defeated in a war, and ceased to exist, there was no longer a person to collect the debt from.

The USA government is not the successor or descendant of the CSA government. There is no legal, moral, or even common-sense reason to expect that it was responsible for the debts of the Confederacy. The 14th amendment just stated what should have been obvious.

If McDonalds and Burger King have a marketing war, and Burger King goes out of business, is McDonalds responsible for Burger King's debts? The connection between the CSA and the USA governments is as weak as that between two competing corporations.

[ Parent ]
two answers (none / 0) (#61)
by streetlawyer on Thu Jan 03, 2002 at 02:22:09 AM EST

A) no, they weren't.

B) Even if they had been, the USA would still be on the hook under the relevant national conventions. Debts "go with the territory", which is why so many Third World countries are so poor.

--
Just because things have been nonergodic so far, doesn't mean that they'll be nonergodic forever
[ Parent ]

Debs go with the territory (none / 0) (#76)
by PresJPolk on Thu Jan 03, 2002 at 01:46:32 PM EST

Says who, the person owed the money?

Seems to me in an honest capitalist system those who loan money are taking on risk.

Gee, this pretty much changes my entire view on third world debt... if the government is overthrown, the debts of that old government don't apply. How many countries would that save?

I wonder if Jubilee 2000 has tried this argument. Probably not, because they want to free all the third world, not just the ones that had bad governments that went into debt.

[ Parent ]
The Euro (1.83 / 6) (#16)
by Maclir on Tue Jan 01, 2002 at 10:52:46 AM EST

  1. Yes
  2. Yes
  3. No


Sure, here is my set of answers. (4.37 / 8) (#17)
by Surial on Tue Jan 01, 2002 at 11:22:22 AM EST

I'm dutch by the way.

  1. Yes, it was definitely a good decision. There was an on and off plan to do this since the seventies, and it has taken way too long. The practical advantages of single currencies severly outweigh the dubious advantages of having 'a national coin', and having a free-floating currency vs. the rest of the EMU.
  2. No; while the older coins (dutch florijn is the oldest, near as I know, as 'florijn' is still a reference to the very first monetary unit used mostly in venice and minted in florence, hence 'florijn') do have some interesting histories, I don't see them as a great symbol of culture. As far as the 'national symbol' pictures, they remain; the flipsides of all 8 euro coins have a national symbol which shows you where the coin was minted.
  3. It might, depending a lot on what happends in the economic world. The whole Argentina crisis certainly isn't helping the dollar much, as part of the problem seems to be that Argentina has locked their coin to the dollar. The euro now has about as much consumer power behind it as the dollar and it is very easily exchangible. In other words, it has the same 'perks' as the dollar used to. There might also be political reasons to use euros instead of dollars in some situations because europe is a bit more neutral than the states for many different political issues.

--
"is a signature" is a signature.

Depends where you are (4.50 / 4) (#18)
by tjb on Tue Jan 01, 2002 at 01:11:57 PM EST

For the Dutch, Germans, Belgians and French (and the English too, if they'd hop on board), I'd say that the Euro is definitely a good deal as it standardizes things and should ease some trade problems.

But for, say, Italy, I'm not quite so sure. Italy is saddled with an enormous debt and their best course of action at some point in the future may be to devalue their currency and "inflate away" that debt to some degree. But, if they're locked in with the Euro, its doubtful they'd be able to pull it off as the other countries are unlikely to want the associated inflation.

Tim

[ Parent ]
And therein lies the problem... (4.33 / 6) (#19)
by Best Ace on Tue Jan 01, 2002 at 02:08:31 PM EST

Nobody can predict what future economic conditions will be like for each country. With the Euro, countries no longer have the option of adjusting interest rates if their economy is out of step in any way with the rest of the Eurozone.

There have already been examples: Ireland's economy has been red hot while Germany has been very sluggish, yet the Irish could not raise interest rates to counter inflation.

It's not just national debt that varies so much between countries, it is a whole host of things that no one can predict, and this makes the whole Euro project a very risky one.

[ Parent ]

So what? (4.33 / 3) (#33)
by ghjm on Wed Jan 02, 2002 at 03:18:18 PM EST

Poorly thought out monetary policy (which is by far the most common kind) often does far more damage than the economic problems it was intended to alleviate. Having one big currency means pooling resources and averaging out special interests so that policy decisions get made on better overall advice.

Besides, it's not a problem if sovereignty gradually accumulates at the EU level. Does anyone complain that the U.S. can't follow a monetary policy tailored to both North Carolina's sizzling tech economy and Washington's crashing aerospace sector?

-Graham

[ Parent ]
Problem (4.66 / 3) (#37)
by MrAcheson on Wed Jan 02, 2002 at 03:32:07 PM EST

Therein lies the rub, in the US people will move from state to state to go where the jobs are. In the EU this is not the case. The italians aren't going to leave Italy and go to Denmark in order to find work. Europe is much more regionally divided then America in that respect especially since they don't have a uniform language, etc. and lots of the countries don't necessarily like each other.

In the long term as Europe unifies more and more it will be less and less of a problem. But now its a potentially major issue that will have to be dealt with.


These opinions do not represent those of the US Army, DoD, or US Government.


[ Parent ]
Europe's divided but unioning (none / 0) (#67)
by nopek on Thu Jan 03, 2002 at 06:49:44 AM EST

The italians aren't going to leave Italy and go to Denmark in order to find work. Europe is much more regionally divided then America in that respect especially since they don't have a uniform language, etc.

But then the Euro helps people to move to another country, or maybe live in one and work in another.

[ Parent ]

It's unioning, but it needs WAY more unioning... (none / 0) (#68)
by Ranieri on Thu Jan 03, 2002 at 07:20:56 AM EST

But then the Euro helps people to move to another country, or maybe live in one and work in another.

Being a citizen of a member country that liven in another, i can tell you the integration still leaves plenty of things to be desired.
The burocracy connected to the idea of actually being a citizen of a country while living in a second and working in a third is too much to even ponder at this point in time. There are a number of points that must be adressed first.

* Cross-border work requires harmonization of tax and labour laws.

* Profound changes in important national laws (such as tax and labour laws) require a fair and democratic decision process. (Though not eveybody in Brussels seems to agree on this point ... Strasbourg seems to though :)

* A way must be found to delegate power from the member states to the European parliament. Attempts are being made with the Nice treaty, but so far it's going far from smoothly.

* Different clubs of nation adhere to different treaties and organizations (EU, EMU, Schengen, European Patent Treaty etc), making the process even more complex.

And last but definately not least

* All of this must be accomplished within the current one-veto-and-the-whole-thing-is-off framework. In addition a number of member countries (amongst which the EIRE, but i think also Italy and Denmark) are required by law to have a referendum on all treaties they sign. This tends to slow down things quite a bit.

While the euro was a big step for europe, several other big steps remain to be taken.
--
Taste cold steel, feeble cannon restraint rope!
[ Parent ]

Referenda (none / 0) (#71)
by Merekat on Thu Jan 03, 2002 at 09:01:09 AM EST

A referendum is required in Ireland any time anything will change the consitiution, not specifically on all treaties, I think. Unfortunately, there's rather too much operational stuff in the constitution, so there's a lot of referenda.

(Incidentally, when writing in English, 'Republic of Ireland' is better usage. 'Eire', although it is an offical name, just looks and sounds wrong in that context).
---
I've always had the greatest respect for other peoples crack-pot beliefs.
- Sam the Eagle, The Muppet Show
[ Parent ]

Not the point (none / 0) (#82)
by Best Ace on Fri Jan 04, 2002 at 08:00:29 PM EST

A single monetary policy is not a problem as such. The problem comes when this is not backed up by a flexible fiscal policy. The difference between the US and the EU is that the US federal government has the power to make vast transfers of money to parts of the country that are lagging behind. In Europe, there is no big central transfer of funds, and countries cannot spend their way out of trouble because part of joining the Euro means signing up to the 'growth and stability pact' which means no country can run a budget deficit greater than 3% of GDP without incurring huge fines. This has important consequences that people haven't really grasped yet.

It seems the countries that have signed up to the Euro have surrendered control of their monetary policy to the European Central Bank, and control of their fiscal policy to this 'stability' pact. If the Continental Europeans had debated the economic merits of the Euro instead of talking solely about the political project they were embarking on, then there may have been less support for the single currency.

[ Parent ]

Ah (none / 0) (#84)
by ghjm on Mon Jan 07, 2002 at 02:45:43 AM EST

Yes, you make an excellent point. I hadn't considered the impact on fiscal policy - it's a matter of the specific treaty, not an inherent property of a shared currency. You're right: without either monetary or fiscal policy instruments, the national governments are going to have a hard time combating any problems that might arise with high unemployment or inflation. And it isn't easy for these decisions to be made at the level of the European Parliament, either, because anything it wants to do will have to be implemented through the national governments. Interesting.

-Graham

[ Parent ]
Inflating debt (none / 0) (#45)
by Banjonardo on Wed Jan 02, 2002 at 05:24:06 PM EST

Debt is represented in a currency other than the debtor country's currency, usually dollars, sterling, or something really stable like gold or whatever. You can't just inflate debt! Why would anyone loan to inflating countries anyways?
I like Muffins. MOLDY muffins.
[ Parent ]
Not really (none / 0) (#56)
by tjb on Wed Jan 02, 2002 at 10:39:12 PM EST

It kinda depends. If a country were to take out a loan from the World Bank or another country, then, yes the loan would likely be denominated in dollars, but that's really last-resort borrowing.

More likely, a relatively stable, first-world state like Italy would incur most of their debt by issuing government bond denomianted in lira (much like US treasury bonds denominated in dollars). They are asking for a loan and investors set the rate on the market as they perceive what inflation might be, both in absolute terms and relative to other countries. This is probably the only reason a strong currency is good: lack of inflation leads to lower bond rates as investors see less inflation risk with stronger currencies. (However, there are problems associated with strong currencies, which is why the US is trying like mad to slightly devalue the dollar)

Anyway, my guess (and pure speculation here, but it doesn't seem logical for a relatively rich, stable country with decent credit to take out loans in dollars) is that most of the money that Italy and Spain owe is in their local currency through government bonds.

Tim

[ Parent ]
Greek Drachma (3.66 / 3) (#38)
by jabber on Wed Jan 02, 2002 at 03:33:07 PM EST

I don't know how far back the florijn dates, but the drachma is supposed to have originated in 600 B.C. or so.. Of course it's been reminted and repatterned over the centuries, but for having the oldest unit of currency, I believe Greeks have the claim staked out.

[TINK5C] |"Is K5 my kapusta intellectual teddy bear?"| "Yes"
[ Parent ]

Hmm, probably right. (3.00 / 2) (#43)
by Surial on Wed Jan 02, 2002 at 04:58:11 PM EST

I'm sure you're right, I completely forgot about that one.

The only coins that I'm pretty sure of being younger than the dutch florijn are the big three (pound, mark, franc), and the belgian franc.
--
"is a signature" is a signature.

[ Parent ]

Yes and no. :) (4.00 / 1) (#52)
by aphrael on Wed Jan 02, 2002 at 08:11:22 PM EST

The problem with this is that there was no entity called 'Greece' for most of the interverning years. In Byzantine times, the money used would have been the imperial money; in Ottoman times, likewise. I doubt that a unit of currency called 'drachma' has been in circulation for longer than the century and three quarters (roughly) since the creation of an independant greece.

[ Parent ]
Denmark has not adopted the Euro (3.20 / 5) (#20)
by kongslund on Tue Jan 01, 2002 at 06:35:10 PM EST

Denmark, which is a member of EU, has unfortunately not adopted the Euro because of a referendum some years ago.

To answer your questions:

  1. Yes.
  2. Yes, some culture will be lost but I don't think that it is a bad thing. Hopefully we will see that a common currency will foster more internationalism instead of nationalism.
  3. I have no answer for this question but is it important?


--
Jonas Kongslund, Denmark
Agnostic and secular individualist


Economic giants (2.00 / 2) (#21)
by Tatarigami on Tue Jan 01, 2002 at 07:03:19 PM EST

I remember reading an article a few months ago which suggested that a unified monetary policy in Europe could lead to the EU replacing the USA as the foremost economic superpower on the planet through having a larger population and more mature economy (just how does an economy mature, anyway?).

It'll be interesting to see how events shape up for the two continents over the next decade or so.

On the value of money... (4.28 / 7) (#22)
by Amorsen on Wed Jan 02, 2002 at 04:29:47 AM EST

Back in the "good" old days, everyone perceived gold to be of value. Therefore most currencies were based on the promise that the holder of a note would be entitled to exchange it for a given amount of gold. The national banks kept large amounts of gold in reserve, in case everyone decided that they wanted gold more than the money. Eventually a large part of the world's gold ended up in such reserves, which has made the gold price rather volatile -- if all the gold reserves were offered for sale, the gold price would plummet, and the gold reserve would be without value.

These days currencies are not tied to any particular good. The strength of a given currency is only dependent on how much people expect it to be worth in the future. However, the national banks need a way to keep day-to-day happenings from making the exchange rates towards other currencies jump too much, because stable exchange rates are needed to retain trust in the currency. Therefore they buy foreign currencies and keep them stored. In case the exchange rates fluctuate too much, they buy or sell their own currency with the stock of foreign currencies.

If we go back, say 15 years, there were three major currencies used as reserve: The US-Dollar, the D-mark, and the yen. Japan's continuing crisis has made most banks give up on the yen, instead switching to reserves in US-Dollar or D-Mark. Now with the switch to the Euro, many national banks decided that it would be safer to buy US-Dollars for their D-Mark rather than Euro, since the strength of the Euro was unproven. Therefore almost all reserve currency is in US-Dollar today. This has led to a large demand for US-Dollar and naturally pushed the price of US-Dollar up. In response, the US Federal Bank has increased the money supply (in effect printing more money), but not enough to keep the US-Dollar rate down where it was a few years ago. This has enabled the US to buy many foreign goods, thereby leading to a large trade deficit (compounded by the fact that the high US-Dollar has made it very hard for US companies to compete internationally.)

The Euro was supposed to become a respected reserve currency able to easily take the role of the D-Mark, and even take some "market share" away from the US-Dollar. It has completely failed in that task, leading to a global imbalance where the US has a relatively weak economy but a very strong currency, and the EU has a relatively strong (ok, perhaps "less weak" is more accurate) economy but a very weak currency. The global economy will most likely fix that eventually, but the next years could be ugly.

Great post (4.00 / 1) (#57)
by tjb on Wed Jan 02, 2002 at 10:53:50 PM EST

And this is why I wish the Euro were better conceived. The US needs to devalue the dollar, it is way, way, too strong to the point where it begins to injure the US economy and its ability to compete globally.

Despite the weak economy and the best efforts of the Federal Reserves, the US dollar is way overvalued for mostly psychological reasons, and while I doubt the US is going to face a Japan style deflationary spiral, we could see many years of GDP non-growth until currency investors start to purchase Euros.

Unfortunately, for reasons I stated above, I don't see the Euro as a good deal for several of the countries involved, and if I'm right, they'll start to bail on the Euro so that they can set their own interest rates (lower, in general, but higher in Ireland). This will further shake confidence in the Euro and cause investors to flee to dollars even further. This will prevent the devaluation that the dollar needs so desperately by forcing all the otherwise inflationary money that the Fed prints into deflationary and stagnant monetary reserves (which, in turn, increase the chance of rampant inflation if they ever decide to dump that money onto the market at some future time).

Bah, too depressing to think about. I'm usually an optimist not a cynic, but I think the Euro is ahead of its time and that further integration between the European economies is necessary before a common currency becomes practical for all the states involved. As I stated above, I think its ok for France, Belgium, Germany, Denmark, and Britain (if they ever join) to have a common currency at this point. But don't inlcude Italy. Spain, Ireland; those latter three (and in general, the other countries involved) are out of sync with the predominant economies of Europe and sharing a currency with them will cause no shortage of economic misery.

Tim

[ Parent ]
Ireland (none / 0) (#65)
by Merekat on Thu Jan 03, 2002 at 04:55:16 AM EST

I see your point, but regardless of the dangers, I still see Ireland's lot as being better with Europe, because I am a cynic. Irish politicians' running of the economy has frequently been nothing short of stupid, sqandering resources for crowd pleasing when times are good which makes the economy run even hotter, and then picking from social funds when running short. I would prefer we all collapse together, than Ireland do so alone outside the eurozone.
---
I've always had the greatest respect for other peoples crack-pot beliefs.
- Sam the Eagle, The Muppet Show
[ Parent ]
Beautiful but bland notes. (4.00 / 5) (#23)
by Ranieri on Wed Jan 02, 2002 at 04:46:52 AM EST

I've had the pleasure of withrawing 85 euros from an ATM yesterday morning (5+10+20+50), and i have been looking intently at the notes. The notes are very modern and include all sorts of anti-couterfeiting devices. The slight relief is probably going to be a great help for visually impaired people. The colors, while not as bright as we're used to here in holland, are overall rather pleasing.

There's just a little thing that bothers me about the new Euro notes: they are about as bland and tasteless as printed money can get. Probably the governments of the 12 EMU nations were tired of having arguments about the Euro and agreed not to get into a fight over whose national hero would grace the Euro notes.
Hence the (in my opinion) ridiculous idea was born to put non-existing buildings (mostly bridges) on the Euro notes.
I find it rather silly that a continent with as much culture and history as europe should put ``fictional buildings'' on it's money. This is made even sillier by the fact that everybody with half a brain can see that the fictcounter-couterfeitingional buildings in question represent a Roman aqueduct, the Branderburger Tor or a Gothic cathedral. I'm not sure that putting the actual buildings on them would have angered anyone, as long as they would have been reasonably distributed.

Now for the obligatory answer to the questions posed in the article:

1) YES! (I am sooo glad i no longer need that jar full of deutchmarks and two types of francs and thousands of lires...)
2) I think that in the years leading up to "E-day" the cultural importance of currency has been greatly overstated. (especially by the brits :) Francs do not make a french person french, neither do Pesetas make a spanjard Spanish. Culture is something vastly deeper than that. One just has to look at the large cultural differences that persist _inside_ the national borders of the large european countries to realize that culture is in the heart, not in the wallet.
3) Possibly. I read an article in a local newspaper once that organized crime might switch en-masse because Euro bill denominations make it easier to move large quantities of cash. I don't know if it's true, but it might make things a bit more interesting if it is :)

on non-existent buildings (3.50 / 2) (#27)
by twi on Wed Jan 02, 2002 at 12:16:52 PM EST

I like the look of the euro-notes _because_ of the pictures. There are bridges and arches/windows on them. This represents getting together as well as open(minded)nes. They are from distinct cultural periods, in which different countries were more dominant than others, so yes they could be somewhat linked, but only somewhat. But together they show a rich and diverse cultural history without directly putting one county above the others. You just could not "distriubte them reasonably" if they were real buildings. Consider a building from country X is on a 10-euro- note. Then you could say "damn, they are on the most numerous (i suppose) note, so they get many more pictures than we do". And if they are on the 500-euro-note you could say "damn, they are on the biggest note, why are they the most important?". You see, enough room for whining no matter what you do ;-)

All the best, twi

[ Parent ]

Pictures. (3.00 / 3) (#29)
by NovaHeat on Wed Jan 02, 2002 at 02:53:05 PM EST

I'm not European, so anything I have to say about the Euro is pure speculation.

However, I think that there's no 'nationality-specific' pictures on any of the banknotes simply to prevent squabbling. If some Finnish hero was on the 10 Euro note and a French hero was on the 50 Euro note, it seems likely that Finns might feel slighted, somehow.

As for the bridges, it seems like some heavy-handed reference to "building bridges to unite Europe" or something. *shrug*

I think the Euro is a neat idea. Let's see how long it actually lasts.

-----

Rose clouds of flies.
[ Parent ]

Pictures (none / 0) (#60)
by sigwinch on Thu Jan 03, 2002 at 01:22:25 AM EST

However, I think that there's no 'nationality-specific' pictures on any of the banknotes simply to prevent squabbling.
I see that as a major blunder. They should have printed with modular dies, and allowed each major political subdivision of each nation to choose pictures. The quantity of a picture printed would be in strict proportion to the subdivision's population. This would have made the notes collectors items, and each Euro put in a collection is essentially a payment of 1 Euro for a fancy piece of wallpaper. The mints could've made *billions* this way.

I know they did it with the coins, but *I* wouldn't have passed up the opportunity to do it with notes too. Guess that makes me greedy...

--
I don't want the world, I just want your half.
[ Parent ]

Bridges and buildings and architecture! Oh my! (4.00 / 2) (#39)
by jabber on Wed Jan 02, 2002 at 03:46:08 PM EST

The bridges are there because a unified currency bridges the gaps between the countries which use it. Buildings are used, because the new currency is an attempt to build a new economic entity. There is also a progression of architectural styles correlated with the denomination of the banknote. The least valuable notes have the oldest style, the most valuable have the most modern style.

One has to wonder if maybe the ISS might be featured on the 100E note, a geodesic on the 500E and who knows what on the 1000E bill.

Non-existant buildings are used so that the location of the artifact doesn't give preferential treatment to any member of the EU. For that matter, people or other nationally-bound symbols are also not used. Although, each participating country can mint the reverse side of the Euro coinage; the obverse, size and metal is standardized.

Also as a manner of being non-exclusionary, there are no sets of flags or nationaly identifying marks on the currency, naming the member nations using the Euro. So that the currency can be adopted by other countries later on without having to be reminted.

[TINK5C] |"Is K5 my kapusta intellectual teddy bear?"| "Yes"
[ Parent ]

Iceland is missing (none / 0) (#62)
by claesh1 on Thu Jan 03, 2002 at 04:10:44 AM EST

Also as a manner of being non-exclusionary, there are no sets of flags or nationaly identifying marks on the currency, naming the member nations using the Euro. So that the currency can be adopted by other countries later on without having to be reminted.

I was thinking about this too, and noticed that Iceland is missing on the european map on the coins. Iceland counts to Europe too, right? (I have actually not looked at real coins for this info, only on pictures of them)

[ Parent ]

It's on the notes. (none / 0) (#63)
by Ranieri on Thu Jan 03, 2002 at 04:13:53 AM EST

Iceland is on the paper notes. On the coins it's sort of beyond the rounding. Interesting is also that only the western part of Turkey is featured on the notes. One can only guess what that was ment to signify :)

[ Parent ]
Fictional Buildings (none / 0) (#66)
by nopek on Thu Jan 03, 2002 at 06:24:26 AM EST

I find it rather silly that a continent with as much culture and history as europe should put ``fictional buildings'' on it's money.

Exactly. Though I live in Germany it would have been aboslutely fine to me to have the Roman Colloseum, the Eiffeltower or the Oeresund Bridge on the notes. I don't understand if someone could really be such a whiner to blubber about why his favourite building is on the 5E but not on the 50E note. Except if he is a nationalist but then he wouldn't like the Euro and the whole EU thing anyway.
So I think there wouldn't have been many whiners and we should not have cared about the few.

[ Parent ]

Money, Money, Money in a ri..... (3.00 / 2) (#25)
by craigtubby on Wed Jan 02, 2002 at 10:20:21 AM EST

1 Yes, definately.
2 No, how much culture is tied up in money? At the end of the day its just used for "buying" things.
3 Maybe, but not for a long time yet.

One beef I do have is *why* "Euro" - The French proposed Ecu (even if it was similar to "Cow" in german) was better than "Euro" - Surely it wouldn't have been too hard to look through history for a no longer used or romantically linked currancy name, like Shilling, Noble, Florin, Ducat or Sovereign.

try to make ends meet, you're a slave to money, then you die.

* Webpage *

It has to be generic, though. (4.00 / 1) (#31)
by ghjm on Wed Jan 02, 2002 at 03:03:42 PM EST

If you find any interesting-sounding currency name, it is very likely that it will (a) have the sound of a particular language or (b) be associated with a particular culture. This would tend to bar acceptance in all the other languages and cultures. For a name that has to be totally generic, "Euro" isn't too bad.

[ Parent ]
Oh ye of little faith... (5.00 / 1) (#40)
by jabber on Wed Jan 02, 2002 at 04:06:21 PM EST

If the EU really felt that the Euro held any promise for the future, they would have looked beyond Europe when considering the name... They could have called them Gaians.. Terrans.. Worldings.. You know.. Something we could take to Mars, and use in trade with the Centauri ... Or they would have just taken a clue from ALL those great Sci-Fi authors (from Asimov to Lucas) and called them CREDITS.

[TINK5C] |"Is K5 my kapusta intellectual teddy bear?"| "Yes"
[ Parent ]

Not all of them (none / 0) (#51)
by Ubiq on Wed Jan 02, 2002 at 07:47:48 PM EST

Jack Vance called them "sequins". BTW, most people in my vicinity have started calling them "EYPO's" now, a reference to the greek spelling on the bank notes. ;)



[ Parent ]
ECU (none / 0) (#64)
by Merekat on Thu Jan 03, 2002 at 04:43:58 AM EST

Was short for European Currency Unit, which wouldn't have had the same abbrieviation in all the EU languages so it wasn't acceptable, iirc. I liked it better too.

The amusing thing is that there is still no consensus on what to actually call it. Officially, the plural is also Euro and Cent, but our government has nicely said that they won't stop people calling them euros and cents (isn't that kind of them!). The french apparently will call them cents, but not pronounce the s, as usual, so they're allowed have it, and what I've seen written in finnish is different again.

There is also still a lot of confusion. Someone who should know better surprised me by believing you'd have to change your irish euro for dutch euro when in the Netherlands, for example.
---
I've always had the greatest respect for other peoples crack-pot beliefs.
- Sam the Eagle, The Muppet Show
[ Parent ]

What is a euro called. (none / 0) (#74)
by JonesBoy on Thu Jan 03, 2002 at 10:20:42 AM EST

Well, you guys have that nifty little symbol, but no word for it. Just do it like we do it in the US when a symbol is substituted for a name.

Call it the currency-formerly-known-as-Shilling, Pound, Mark...

Why call it the euro? For the confused American tourist, of course. Its Euro as in Euro-pean. Its easier to remember than that last system the country of Europe had with all those funny names to remember. :) Funny part is, I am only half joking. I am sure it is rooted in the English language, as that is becoming the international language, even though it is not the default language in any of the countries that changed. Hey, we have to pollute you EU countries SOMEHOW.

Speeding never killed anyone. Stopping did.
[ Parent ]
Not so sure (none / 0) (#78)
by CaptainZapp on Thu Jan 03, 2002 at 05:56:17 PM EST

I agree that the name is stupid, but there is little use whining about that

At first I also thought it's stupid. But in the long term (and considering the politically unifying significance of the currency) I more and more believe it's a good, if not visionary choice.

[ Parent ]

my two cents (hehe ;-) (3.66 / 3) (#28)
by ghoti on Wed Jan 02, 2002 at 02:17:12 PM EST

Regarding your questions:

1) YES, definitely! There already is free trade and stuff, so the Euro really makes sense (and I agree that the name is stupid, but there is little use whining about that).

2) No. I don't think a currency has a big impact on culture. Now if they were thinking about a common LANGUAGE ... but that's never going to happen.

3) Possible, but I believe (and hope) that the Dollar and the Euro will be about equal in their power and value. That will make the Euro a nice counterweight to the Dollar, but not generate many problems.

I actually used Euros today to buy some groceries (I'm from Austria), and I think it's a great idea. It takes some getting used to, with the new coins and different prices and stuff, but soon it will be no different than our old currencies. Except that we won't need to exchange money any more when travelling inside Euro-Zone.
°<><
Change is good. (3.83 / 6) (#30)
by terpy on Wed Jan 02, 2002 at 02:58:31 PM EST

First off, hurrah to the Euro. Good idea, but what really makes me like it, is that it proves that very large scale change IS possible. Why is this important to me? Simple, if Europe can consolidate a currency and make a change that big that affects an integral part of the lives of _so_ many people, that means that it is possible that someday the US CAN finally get off it's lazy ass and adopt the metric system!!! Lets have a cheer for the metric system!

----
<joh3n> BUKKAKE: the final frontier
<joh3n> these are the stories of the starship: jizziprize

Blame Europe for that too (none / 0) (#34)
by psicE on Wed Jan 02, 2002 at 03:26:18 PM EST

If the United States does switch to the metric/SI system (which we should have done a while ago), it will be because of the EU's new law, which goes into effect in 2009, that bans imports with non-metric or dual labelling. Therefore, US companies either need to make separate products for Europe (expensive), or make everything metric-only.

This law has already been passed, it's just deferred until 2009 to give companies time to adapt.

[ Parent ]
ignore this one (n/t) (none / 0) (#36)
by psicE on Wed Jan 02, 2002 at 03:28:35 PM EST



[ Parent ]
Blame Europe for that too (3.00 / 2) (#35)
by psicE on Wed Jan 02, 2002 at 03:27:13 PM EST

If the United States does switch to the metric/SI system (which we should have done a while ago), it will be because of the EU's new law, which goes into effect in 2009, that bans imports with non-metric or dual labelling. Therefore, US companies either need to make separate products for Europe (expensive), or make everything metric-only.

This law has already been passed, it's just deferred until 2009 to give companies time to adapt.

[ Parent ]
Europe/Metric (none / 0) (#41)
by Surly on Wed Jan 02, 2002 at 04:25:39 PM EST

Why are they imposing a metric only ban? This sounds to me to be very restrictive. Of course I live in Canada where everything is in English & French language (by law) and (usually) metric and imperial measures.

Yes, most American companies that sell items here do print their boxes in French and English, but there are still some that just put a French sticker on...

[ Parent ]
Decimal or die (none / 0) (#44)
by Robert Hutchinson on Wed Jan 02, 2002 at 05:23:40 PM EST

Why are they imposing a metric only ban? This sounds to me to be very restrictive.
You've answered your own question, although "government bureaucracy" would've been slightly more succinct.

Robert Hutchinson


No bomb-throwing required.

[ Parent ]
Metric in Kentuck (4.00 / 1) (#46)
by aluminumaloi on Wed Jan 02, 2002 at 05:48:33 PM EST

Reading this comment reminded me that, while in Louisville, KY over the holiday, I was happy to notice that several of the highway signs listing distance displayed km FIRST, followed by miles in parens, like:

100 km (62 miles)

The speed limit signs are still measured in mph, but, hey, it's a step!

[ Parent ]
The wrong questions? (2.66 / 3) (#49)
by rehan on Wed Jan 02, 2002 at 07:41:39 PM EST

More interesting to me is whether the EU will become democratic. It's not to be celebrated when 300 million of the world's richest and most powerful people are pulled deeper under a corrupt and undemocratic government (the European Commission and the Council of Ministers) largely against their will.

Stay Frosty and Alert


Is there any evidence of this? (4.00 / 1) (#79)
by martman on Thu Jan 03, 2002 at 08:27:32 PM EST

I for one have not seen any reports or articles regarding corruption being found in the European Commission and the Council of Ministers. Obviously this might be because I am not paying close attention (since i don't live in Europe, but in Australia - we've got bushfires for Christmas! Hooray!), but it might also be because your allegations are simply rumour. Provide some sources or links to articles regarding the corruption you mention and your claim will be vastly more credible.

As to undemocratic, i think that's being discussed elsewhere in the comments.


"Everybody wants to save the earth; nobody wants to help Mom do the dishes."
--P. J. O'Rourke

[ Parent ]
corruption in the commission (4.00 / 1) (#81)
by rehan on Fri Jan 04, 2002 at 06:42:58 AM EST

This was a particularly famous incident.

here's one about corruption in the parliament. They are famous for their strange expenses rules.

Having thought about it more, though, I wonder if it's any worse than the US congress.

Stay Frosty and Alert


[ Parent ]
yes, non?, yes (4.00 / 1) (#50)
by bobzibub on Wed Jan 02, 2002 at 07:44:50 PM EST

It was a good decision. Eliminating forEx costs and risks for companies and people. Allowing easier arbitrage between countries, wages, products.
Now workers in Paris can find out what they are worth in Frankfurt, or Zurich and what you would have to pay to live there too. It wasn't impossible before, just easier now.

Many "youngish" Europeans are very mobile-- their phones work through Europe, and they travel and work throughout Europe. There aren't border stops and there is the EU for free movement of goods. It kind of completes the picture for the Euopean market. Free movement of people (working), products (selling), and currency (buying.)

There is a loss of economic sovereignty, however, as the central banks will no longer have any regional clout with monetary policy. Peripheral economies will be sacrificed to the whole. Much like a recession in Western Canada might not alter Canadian monetary policy b/c it is more concerned with central Canada.

I think the Euro could become a strong competitor for the US buck as an international currency. The population of the EU is about 375 Million, compared to the US 300. Official adoption of the US currency won't likely happen in Canada and Mexico due to the imbalance of economic power in North America. Europe can grow eastward and for most countries it is politically easier to adopt the Euro than the US$.

How the EU manages it will make a lot of difference. The UK pushed up the value of the pound until the UK central bank lost credibility with the market. This won't make anyone happy exc cept the currency speculators like Mr. Soros, who pocketed 1B. The Bundesbank is supposedly well run, and it would be the most persuasive of the central banks.

I think it'll be a success story.

It begs the question to Canadian/US policy makers: Why can a Frenchman freely sell widgets in Greece without the hassle of a border--3 or four countries away--yet an American can't sell widgets in Canada without going through Canada Customs, and Canadian Banks.



Trade Barriers (none / 0) (#55)
by statusbar on Wed Jan 02, 2002 at 09:52:44 PM EST

    It begs the question to Canadian/US policy makers: Why can a Frenchman freely sell widgets in Greece without the hassle of a border--3 or four countries away--yet an American can't sell widgets in Canada without going through Canada Customs, and Canadian Banks.

I believe that it is even worse than that! With NAFTA in place, it is harder to 'export' products from B.C. to Quebec within Canada than it is to export products from B.C. to Washington State!

--jeff



[ Parent ]
Absolutely (4.80 / 5) (#69)
by dennis4b on Thu Jan 03, 2002 at 07:29:38 AM EST

Disclaimer, Dutch living in Finland

1) Absolutely. It was amazing to see thousands of people all over Europe line up, sometimes in the freezing cold, in the first minutes of 2002 to get their first Euro notes. While the money is maybe not as a colorful as some European notes used to be, I like them very much. Europe has always made the best (quality wise, design wise and security wise) bank notes and the Euro is the a combination of all that experience. See also answer number 2.

2) It does of course. But the thing is *every* member of the Eurozone went along. The Greek gave up their historic Drachma's, the Germans their very stable DM and Bundesbank, France their beautiful francs, Holland their colorful guilders, Finland their pretty marks, etc. They all did this to continue with a united single currency. These are big sacrifices for any country, and they all went along and did it. This is a good moment to be very proud if you are living in one of these countries. And hey, Paris is still Paris, I just won't get ripped off when I'm there anymore :-)

Before I go on to number 3, let's deal with some misconceptions. People say it's impossible to have an economic policy for a group of economies so diversified in every aspect as the countries currently in the Eurozone. Like some other people have pointed out, it's the same in the US, different states would ideally require different policies. What less people have pointed out is that for the last 10 years (Euro was drafted at the Maastricht treaty in Holland in 1991) the economies of Europe have been brought to within less than 10% of the tolerances allowed between the states of the USA in the areas needed for the Euro to work as planned. Italy by 1997 had done so much work on their budget they are now a great teamplayer in the Euro.
Also, it always amazes me when a supposedly "real" news agency (BBC) comes up with absurd things (war on terrorism, and now the euro), and I can quote them saying at some point (website I think) .. british don't want their economy controlled by a bunch of unelected Germans .. excuse me ??? The main office of the European Bank is in Frankfurt, which given that the DM has always been the most stable currency and Germany's economy the biggest is pretty fair. Furthermore, there is a president from a different country, currently a Dutchman, to be followed by a Frenchman, etc. Germany is not "in charge" of the Euro, the Euro countries are. Unlike what the Sun tells you adopting the Euro does not mean giving up your independence. But where you could previously mask some symptoms by juggling with exchange rates et al, you are now forced to deal with the actual disease. With help from all the other Eurozone countries. Fair deal?

3) Eventually, yes. Some oil-producing Arab countries not particularly fond of the USA have already said they would want nothing more than the Euro to prove stable (which it has so far, 30% against USD doesn't mean anything and is perfectly explainable, but that's another thread) and start pricing barrels of oil in Euro's, not dollars. Europe has more people, and simply by numbers the Euro will have many more people behind it than the dollar.

First and foremost, the Euro is political, a lesson from the world wars. I have full confidence it will exceed expectations.

Halleluja, Brother (4.00 / 1) (#77)
by CaptainZapp on Thu Jan 03, 2002 at 05:42:31 PM EST

It was amazing to see thousands of people all over Europe line up, sometimes in the freezing cold

In Switzerland the major railway change offices opened exceptionally at midnight, Jan1 - 3am to distribute Euros upon the population of a non-eu country. Folks where lining up (in the freezing cold) by the dozens. All ATMs (at least the ones of the postbank) will soon distribute Swiss Francs and Euros, which is nice if I go to Paris :).

It does of course. But the thing is *every* member of the Eurozone went along. The Greek gave up their historic Drachma's, the Germans their very stable DM and Bundesbank, France their beautiful francs, Holland their colorful guilders, Finland their pretty marks, etc. They all did this to continue with a united single currency. These are big sacrifices for any country, and they all went along and did it. This is a good moment to be very proud if you are living in one of these countries.

Even as a non-eu citizen, with critical opinions on parts of the eu-workings and otoh a feeling for the significance of one of the most important political developments for the last 50 years and for the future to come I totally second that notion (in fact, that was the paragraph that gave my reply the title). I'll vote yes despite the reservations, since I think as a highly developed country in the middle of all of it (well, for now) with the propably highest service level anywhere (arguably, safe for Holland and Luxembourg, but small countries seem to be somewhat more efficient in that respect) we have a lot to offer and a lot to gain. Provided that we can keep the system of a direct democracy (which will ultimately clash with some eu regulations) I don't think there's much to lose (save for money, but then there's enough of that around). The question will come up for referendum in 5 years, but I believe that it will be ten years until Switzerland is a member. But despite what the slightly right of John Ashcroft folklorists think, it's inevitable.

Dutch living in Finland

Well, then I guess I'll have a Grolsch on your post and oh yeah, did I mention that this reply is crafted on a computer with an operating system having it's humble beginnings in Finland?

Ich bin ein Europaeer

[ Parent ]

Two things (2.00 / 1) (#80)
by trhurler on Thu Jan 03, 2002 at 08:37:26 PM EST

First of all, it does seem likely that the Germans will dominate the European Bank, if for no other reason than the simple principle of being close to the source, and in any case, the EU's leadership is not and never has been elected, nor are there any plans I'm aware of to change that.

Second, China has far more people and resources than Europe, and yet I do not see their economy or currency dwarfing that of the US; further, OPEC will not use Euros unless they prove stable, which would mean a relatively stable price in dollars, which would mean essentially nothing changed. Many things contribute to the influence of a currency, and "number of people who live where it is produced" is not really all that important, nor is which currency some particular people set their prices in among a set of stable options. The dominance of the dollar largely stems from the fact that people all over the world trust it regardless of what they think of its origin. The Euro might eventually have similar influence, but that would take time, and to actually surpass the dollar, the US would have to screw up somehow.

Third, even if every European nation was involved(not true,) the population would only be a fractional degree larger than the US. I realize that the EU is basically the world's largest case of penis envy, and I find it admirable that you admit this so openly, but the economy of the US is quite competitive with all of Europe combined:)

--
'God dammit, your posts make me hard.' --LilDebbie

[ Parent ]
History (4.50 / 4) (#72)
by yooden on Thu Jan 03, 2002 at 09:05:28 AM EST

I'm a citizen of one Euro country, live 2000m from another one, work 1000m from a third. A short 60 years ago and hundreds of years before that, there have been war after war here, the region is still riddled with border fortification.

Now I don't even know from which war these fortifications are. If I want to buy my bread in another country, I don't even have to think about currency issues.



Comment from a non-EU European (5.00 / 2) (#73)
by CaptainZapp on Thu Jan 03, 2002 at 10:20:15 AM EST

This is coming from a non-EU country, which is surrounded by Euro countries (save for Liechtenstein, which still employs Swiss francs)

1) Do you think the adoption of the Euro is a good decision by the leaders of the 12 countries adopting the currency?

In the long term, yes absolutely. The reasons ranging from (political) identity to a (medium term) counterweight to the USD. Personally - since I travel a lot - it's the best invention since GSM, since I only will have to deal with basically two currencies (EUR & USD) when abroad. Saves a lot of grief, hassle and expenses.

2) Do you think the adoption of the Euro means the elimination of a portion of the culture of each of the 12 adopting countries? I, for one, appreciated the unique currencies of the countries of Europe.

As long it's only the currency :). No, I don't have a problem with that. Where the EU should really take more care regarding regional differences is food. Banning stuff like French or Italian raw milk cheese or other regional delicacies because of wicked, wicked bacteria is just plain stupid (those of you that don't have the luck to have access to some of that stuff just have no clue, what you miss out). Besides that, I like the design better, then with the LIT notes :). Personally I think the EU bureaucrats should care more for national and regional diversity and not attempt to Dutchify (to stick with the example) cheese production throughout Europe. Hey, nothing wrong with Holland, but the cheese tastes like the plastic it comes in (duck and cover)

3) Could the Euro topple the dollar as the most-powerful currency in the world?

Not in the short term. Medium and long term I think it will be a counterweight. The USD was a lucky currency because of Greenspan, who had a tight grip and excellent foresight moneytarywise, in the last couple decades. When a fed boss decides to engage the money presses, as the US tended to do without consequences before Breton Woods, then the Euro could quickly become the currency of choice.

The true challenge will be the ECBs resistance to attempts of nationally motivated pressure. If it can resist that (as it did pretty well under Duisenberg) the Euro has an excellent future, because its not up to one country dilluting the currency for short sighted reasons. (Yes I know that national banks are independent [in theory])

Euro Euro: One Currency's Strange Economic Journey (5.00 / 1) (#83)
by Scrymarch on Sat Jan 05, 2002 at 05:56:04 PM EST

The Euro has seemed to me rather like the European Union itself - large, important, even powerful, but possessing a dull abstractness that leaves me unable to engage with the concept. International finance is an abstruse topic that most people deal with on instinct, whether making change or rioting for bread, and at its core it contains an act of trust which is probably the most interesting part about this entire exercise.

From my layman's reading of it there's a consensus on what a single European currency does, which is increase market transparency across the continent. It makes it both easier to compare prices in different countries and removes the costs of converting money, while making monetary conditions less able to be tailored to specific regions. The technical arguments revolve around whether that is a good or bad thing. Though most seem to be in favour there is a respectable minority against the concept.

Money is a way of quantifying trust, and exchange rates are second by second reports on that measure. By abandoning exchange rates - even their physical echoes in notes and coins - the EU has established a large zone of trust. This is usually explained in technical terms, like exchange rate risk and capital market hedging, because networks of trust are so implicit to business businessmen don't like to talk about them. Now there are important and worthwhile mathematical and econometric analyses that can be done; most so when they represent unintuitive results. But ultimately transactions, and particularly an experiment like the Euro, rests on gut emotion, not equations and simulations.

During the last year I met an Australian architect in Berlin with perhaps the precisely contrary perspective to the technical way the argument for the Union is usually expressed. He had an immense but formless enthusiasm for the European Union and its trappings. He had wandered into some sort of EU information office at one point wanting to know more about it; and he was presented with some promotional plastic flags and colouring books and similar objects designed to cultivate a European sense among the young. His actual knowledge of the institutions and technical details was sketchy, but I think he appreciated the size of the undertaking at an emotional level.

Though the various leaders and technocrats would have you believe this decision was made by wise grey heads carefully weighing abstract concepts, it ultimately comes down to a leap of faith. They are asserting with this bold and boring experiment that a European is better off treating a person thousands of kilometers away much like they would treat their neighbour. The conglomeration may yet fall apart. The act of trust, though, is impressive, and I salute it.


Physical quality of the Euro.... (none / 0) (#85)
by MonoSynth on Fri Jan 18, 2002 at 09:10:35 AM EST

Some Dutch dudes tested the Dutch Euro's against the Dutch Guilder for physical quality, and the Euro is *much* worse than the good old Guilder....

Look here



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....And the world goes on racing, like the world always will....
Whither the Euro? | 85 comments (82 topical, 3 editorial, 0 hidden)
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