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Fist Fun
11:06 / 31.12.01
So the single currency is kicking off in mainland Europe. How big of an event is this really? Is it economic or political folly?
I remember looking into this a few years ago and not finding any clearcut answers. There are economists who argue both for and against and I sort of got lost after a while. However the economic decision was made years ago and it has been political will that has kept the ball rolling.
Should Britain join? How will the euro affect your life?
 
 
Our Lady of The Two Towers
12:21 / 31.12.01
I'd like to thank Tony Benn for giving me reasons to be against it that weren't xenophobic and based on Little Englander prejudice. The EU is completely fucking useless, riddled with corruption and cannot do anything that any country does not want them to do. Half the countries that want in on the single currency want it because their economys are ruined and they see it as a good way of sorting it out.

Get rid of the corruption and sort out the politics first. Monetary union should be the last stage of unifying countries together rather than the first.
 
 
Fist Fun
13:45 / 31.12.01
Some pretty hearty generalisations there Lozt. I'd agree that corruption is a problem, but I think it comes with the job. Do you know of any large organisations, charge with handing out subsidies, that are free of corruption. I think it is rather a problem of human nature than the institution itself.
As for
quote:cannot do anything that any country does not want them to do.

well this is to be expected at this stage. The Treaty of Amsterdam did increase majority voting in quite a few areas, but the above quote is pretty true. Is this a bad thing? Are you suggesting that all national vetoes be removed?
quote: Half the countries that want in on the single currency want it because their economys are ruined and they see it as a good way of sorting it out.
Well, yes. Isn't that a good thing? I fail to see the negative side of "sorting an economy out".
I think it boils down to a chickena nd egg situation. The European Union doesn't currently have the the political power, organisation, or most importantly democratic legitimacy that is required to carry out a project as grand as a single currency. However such projects seem like the only feasible way to generate these necessary conditions. It would be great if they could be put in place beforehand, but I don't believe that would be politically possible.
 
 
Our Lady of The Two Towers
15:39 / 01.01.02
quote:Originally posted by Buk:
The Treaty of Amsterdam did increase majority voting in quite a few areas, but the above quote is pretty true. Is this a bad thing? Are you suggesting that all national vetoes be removed?


If there is supposed to be economic unity then I see no reason why there shouldn't be political unity as well. To have one without the other sounds like a recipe for trouble later on, but I only did GCSE Business Studies so it's not like I understand economics in any way.

quote:
Well, yes. Isn't that a good thing? I fail to see the negative side of "sorting an economy out".
What worries me is that it makes things difficult for everyone else. IIRC, Scottish nationalists want complete economic independence from the UK but England won't give it to them because it's a valuable source of income to the British purse. Am I remembering that right? I am a bit concerned that those better off parts of the EU will have to pay up to cover the poorer parts.

I don't believe it's a chicken and egg situation. I think a political union could come first but would require national governments to effectively sign their own death warrants, so it's obviously not likely.
 
 
Little Mother
11:45 / 02.01.02
quote: Some people are worried that the single currency is being run by a a central bank that is divorced from firsthand or secondhand democratic control.

To be fair there is limited difference between that and they way the bank of england as is since there is precious little if any democratic control over what it does with the pound. However control of a currency and things like interest rates does not equate with control of an economy and I feel that a great many of those in Britain arguing against the single currency are playing on people's ignorance. The great majority of economic tools are still in the hands of national governments, and there is little indication of those controls being given up in the near future.

quote:The EU is completely fucking useless, riddled with corruption and cannot do anything that any country does not want them to do.

I wouldn't entirely go along with that unfourtunately the media tend not to be so interested the the useful things the EU does. It has done a great deal of good in protecting the environment of europe, from both pollution and over exploitation, it gives a chance for redress for damage done across national borders. A great deal of infrastucture improvement in some of the poorer parts of europe has been at least partly funded by europe. And it is the Eurpean court of auditors that is still fighting against Bill Gates' misuse of his dominant position in the market place. Corruption is a problem in all government, true, but I would also suggest the that EU (and we are here talking about all three political sections: Commission, Parliament and Council of Minister as well as the two courts) is not quite as riddlied with corruption as might be thought. I think the main problem is that the European Parliament is undervalued and not given the powers it deserves, too much is decided by the Council of Ministers who are far too often preoccupied with national one-upmanship as a form of vote winning.
 
 
Fist Fun
04:52 / 03.01.02
How do you feel about the Euro Little Mother? How will it affect your life? Is it "a good thing"?
 
 
STOATIE LIEKS CHOCOLATE MILK
04:52 / 03.01.02
OK, so there are arguments for and against. Neither of which I can really follow... my vision tends to go blurry when economics gets complicated.
What DOES really amuse/worry/upset/confuse me (depending on the time of day) is the "loss of sovereignty to those goddamned foreigners" argument. I know, I'm an economics moron, but... isn't it a bit sad (and frighteningly uber-capitalist) to stake your entire cultural identity on WHAT YOUR CURRENCY IS? (Especially sincewe only went metric about 30 years ago... it's not like it's ancient cultural heritage or anything). As far as I can tell, we (the UK) have weathered the economic slump better than expected largely because we've run up more personal debt so our consumer spending could prop up the pound. (Sorry... I've been up all night writing press summaries for Goldman Sachs and the British Bankers' Association- I feel like I've read little bits of a very complicated novel and am trying to figure out who the bad guys are). Chances are, when those credit card bills come in, our consumer spending will go through the floor again, all the previously-fucked flagship companies that have undergone a brief renaissance (hello Marks & Spencer) will once more be shagged, and we're just counting on the global economy (ie not just the "eurozone", much as I hate that word) to have bounced back a bit so we can catch it on the upswing...
I don't think the strength of the pound in comparison to any other relatively stable currency (and that, believe it or not, includes the euro) has much to do with it, given that not that long ago, economists were complaining that the pound was TOO strong (which I didn't understand) and that unemployment was getting TOO low (which I also didn't understand).
I dunno. On a purely pragmatic/stupid level, I'd kind of like some different money, just because I'm getting bored with the notes and coins we have now, even on the rare occasions I get to see them.
Oh, and there's also the fatalist/practical side of things... do "we" (not that I really care about what the fuck my nationality is, just the way the place I live is run and treats the places where other people live... so right now that "we" sticks in my throat) really want to be one of the, probably about 3 by the end of this palaver, countries who have their own currency that ONLY THEY USE, if all "our" allies/partners/trading buddies/fellow-human-beings-in-the-immediate-vicinity have decided- just this once- to AGREE on something?
And yes, I'm as afraid of a New World Order as the next guy... but I really think, if that's on the cards, not accepting the euro ain't gonna do diddly-squat to prevent that.

[ 03-01-2002: Message edited by: Moominstoat ]
 
 
uncle retrospective
14:58 / 03.01.02


[ 07-01-2002: Message edited by: uncle retrospective ]
 
 
Fist Fun
08:41 / 04.01.02
The economic arguments can get hard to follow, I've read a few journal papers on it and there are economists who argue for either side.
In summary it is generally noted that the single currency would provide greater transparency (easier to compare prices), competitiveness(less barriers to trade) and stability(based around the core methods used by the German Central Bank). The most commonly used economic argument against is that one set of interest rates would not be appropriate for all the involved states. Obviously it is much more complex than that but those are the usual journalistic arguments.
Will Britain join. Yes, they will as long as then government holds the referendum at the correct time (or finds some excuse not to go to referendum). Personally I read the waiting till the five key tests are met to mean wait till conditions in the single currency zone involve lower interest rates. This would mean by joining up mortgage rates would be lowered and joe average would save thousands on his mortgage. That is the only way I could see a referendum actually being won, and I wouldn't be suprised if the central banks of england(britain?) and europe arrange things to make that happen, even though they are independent from political control.

[ 04-01-2002: Message edited by: Buk ]
 
 
Our Lady of The Two Towers
08:57 / 04.01.02
The Daily Mail went to various high street stores in London, Birmingham and Manchester and tried to pay with Euros. They were, unsurprisingly turned down. They then wrote a typically europhobic piece about how the Euro caused chaos.

I read this and thought, what was the point? Of course they can't use this money, it's not valid currency in Britain! But then, if the Daily Mail were not allowed to print misleading articles and straw man arguments, where would they be?
 
 
Little Mother
18:18 / 04.01.02
quote:How do you feel about the Euro Little Mother? How will it affect your life? Is it "a good thing"?


Right, well to be honest I don't think it's going to effect my life that much since my job prospects and other financial type stuff could be affected as much by a whole host of other economic factors. I feel the euro will make a lot of peoples lives easier and cause them to spend less money they don't have to. I also feel that farting about on the edges ahas, when it comes to european affairs invariably left Britain worse of in the end. There are definately possible risks to the single currency, devaluation being the main one, I feel that the possible benefits outweighthese risks. Although I am constantly amazed and annoyed by those who fail touse any of these reasoned arguments and instead spout all that sovereignty piffle. Since if sovereignty is indeed defined by one's currency Belgium and Luxemberg, who have had a highly succesful monetary union for some time now are in big trouble.

quote: I've read a few journal papers on it and there are economists who argue for either side.

Just as an aside, my politics A'level teacher, who had, among others, an economics degree, once said that if you lined every economist up end to end they would fail to reach a conclusion.
 
 
Fist Fun
14:14 / 05.01.02
Interesting piece in todays Guardian about Tim Martin the chairman of the pub chain JD Weatherspoon. He is going to be spending £40,000 kitting out his pubs with anti-euro beermats and posters.
His arguments are the following:
"single currency cannot work without a single government. This is because differences in wealth across the continent are so immense that a single interest rate is unsustainable. Currencies only work within nations because governments use taxation to mitigate regional inequalities."
"Interest rates would be set at a higher rate than we need. You'd get riots in the street. They'd be a very serious danger of social chaos - as in Argentina."
"We've had an anti-intellectual attitude towards it. People have adopted an emotional, tribal, political attitude towards it, rather than analysing it in depth."
Anyone care to comment on this? It is fairly obvious that a single currency would involve a tranfer of political power from the nations state, however it would be very unlikely that this would involve a single government. What is meant by the vague term "single government" anyway? The European Union is guided by, and this was a focus of The Treaty of Amsterdam, the principle of subsidiarity. That is to say that decisions should be taken at the most efficient level be that regional, national or supranational. So a "single government", if we take that to mean a supranational entity with all powers that previously belonged to the nation state vested to it, would be contrary to the constitution of the Union. Surely a transfer of political power to the entity that can use it most efficiently should be encouraged.
Currencies only work within nations because governments use taxation to mitigate regional inequalities
Under the Euro nation states will still control taxation so this seems quite a confused point. Perhaps it has been taken out of context. I think he might be referring to the fact that public spending is one of the economic levers used to balance regional economies in times of trouble. The single currency would mean that funds would be necessary for troubled regions, but this happens just now all the richer countries are net contributors. They agree to this because the know that they gain immensely from the single market. This will still be the case but more so under the Euro subsidies will have to be used but with the knowledge that in the longterm evening out inequalities enriches everyone.
The often used argument that a single interest rate would not be suitable for so many different regions is a valid one but it doesn't take into account that interest rates are just one economic lever among many.
 
 
w1rebaby
19:41 / 05.01.02
personally, I'm in favour of the euro since (a) as has been pointed out I have bugger all democratic control over my currency anyway, and (b) it will put currency speculation within the euro zone out of commission, which is one of the biggest parasitic "industries" imaginable and contributes nothing to society, apart from making the rich richer and the poor poorer.
 
 
Fist Fun
08:25 / 11.01.02
quote:it is interesting to see how so many people in the Uk base anti Euro arguments on flawed information:
#1 Euro is weak. Over the last 2 years the UK Pound has fallen nearly as much against the dollar as the Euro. Also, i didn't hear any of the anti euro mob saying the UK Pound was weak in the 3 years following the pound dropping out of the ERM and having fallen 30% against the Euro.

#2. One size fits all interest rate policy. Why is a one size fits all policy OK for very economically different regions such as the south east and North wales or the midlands or oil dependant scotland. If anything the UK (ex London) needs a similar interest rate policy to the Ruhr, Northern Italy, France, Belgium .... Britains one size fits all has been decried for years but the anti euro lot don't seem to be bothered about it.

#3 The queens head on bank notes. If i remember correctly a recent article in the FT mentioned that the queens head first appeared on the pound in the 70s, thats not exactly a age old tradition. Also the queens head can carry on appearing on coins. Contrary to many coments heard in the UK the pound is not the oldest continuous currency in use - the drachma has been in use for 2600 years, the franc for 700 years and the florin for 600 years (all over europe).

#4 UK economic performance is better than eurozone. Well that one realy is cods wallop. Unemployment - at least 3 other countries have unemployemnt rates that are lower than the UK (Netherlands, Austria, Portugal), at least 2 other countries have had faster falling unemployement than the UK (France and Spain), Germany absorbed a bankrupt decrepit country in 1990 - if you look just at former west Germany unemployment is at the same level as in UK. Finally headline figures mean nothing. The total number of hours worked in the UK economy as stayed the same since the end of the 1980s (more people are working but more are on part time).

Realy when you analyse things cooly there is only one valid argument, and that one is subjective. The UK public is emotionaly attached to the pound even though it has delivered steadily lower purchasing power over the last 30 years ( a pound was worth 5DM in the 70s). There are no real economic arguments against the euro, if there were they would be equally valid against a pound used in the UK, Gibraltar, Channel islands etc etc.

Interesting post from a messageboard.
 
 
Little Mother
11:15 / 11.01.02
quote: It is fairly obvious that a single currency would involve a tranfer of political power from the nations state

Would it though? With an independent central bank that is not under government control it could be argued that power over currency lies within the nation state (or whichever one the bank happens to be in) but not with it. There is also the question of how much power governments or banks have against currency speculators anyway. As has been mentioned the euro removes this problem from its zone.
 
 
alas
12:37 / 11.01.02
arggh. lost a supremely eloquent post to this. To recap that lost MS in sadly degraded language no doubt:

three things lost to the euro: 1) the gorgeous Dutch bills. alas. 2) the 3,000 year old drachma. 3) the fact that you could become a millionaire in Italy by exchanging a tenner for lire. (well, almost)

from this side of the Atlantic: Isn't the invisible elephant in the EU debate so far the economic hegemony of the US, esp the USDollar's domination of currency markets?
(I realize this may sound very UScentric: everything is ultimately about the good ol'USA, but I can't figure a way to bring this up without giving that impression, partly because the US--government, media-- does position itself as central to the Westnern market model, with the UK as its favorite cheerleader. . . )

Although I'm not engaged in utopian fantasizing about the EU as creating a new, fully humane/environmentally conscious/socially progressive new world order, it seems that part of the purpose of uniting is to counter the power of the US, and to bring European social/environmental consciousness to bear at least a little bit on the multinational corporate domination of the world economic scene.

thoughts?
 
 
We're The Great Old Ones Now
13:02 / 11.01.02
Mainland Europe currently regards the US as a rogue elephant, and Blair as some kind of Kipling-esque mystic claiming control over its random destruction.

The US is indeed a pivotal economic force - but Europe is, too. And whilst when the US sneezes, the world catches a cold, the same is true in some measure of Europe and the East.

I don't see monetary union as requiring political union, and actually I think political union is probably a mistake. Devolved federalism might just work...
 
 
Fist Fun
14:27 / 11.01.02
A propos de transfer of political power:
quote:Would it though?

Yes it would. That isn't really up for debate I'm afraid. I understand (and disagree to a certain extent) with the statement that the UK would not lose political control over monetary policy because the cntral bank is independent anyway. However, not all the central banks of the EU are independent, so yes there would be a transfer of political power from state to supranational entity. Pretty clear.
Now the point about the British government having no control over monetary policy (which from a purely economic view is "a good thing") is well made, however I do believe that there tends to be unofficial leverage and that this unofficial leverage would be diminished if monetary policy was decided in Frankfurt.
The debate about monetary union requiring political union is an interesting one. The idea of what is now the EU came from a travelling booze salesman called Jean Monnet. He decided it would be a good idea to stop wars within Europe. Now to do this you would need to make it benificial for nation states to cooperate, help each other out, rely on each other and thus make life better for everyone. Now nations states guard their sovereignity pretty keenly so it wasn't just a question of setting up a federal government. On the other hand nation stated tend to be money grabbing so if something could be proved to make them money...thus was born the Schumann plan, the integration of coal and steel and the first important postwar act of integration...and so it continues. First comes an economic measure that nation states sign up to because they want the dosh, then comes along the political measure which the original economic measure requires to succeed. Single market, CAP, Single Act, expansion to new markets all have been economic measures which have in turn necessitated a tranfer of political power. So, at least in historic terms, it seems likely that a certain tranfer will occur.
This also raises the question "Is increased political union a good thing". Yes, because, while admitting that a central bank independent of political whim, is "a good thing", something as huge and influential as economic policy cannot be allowed to take place without democratic control...of course it the nation states of the EU who pick the governors of the central bank so the nature of independence is another question...
...devolved federalism is based upon subsidiarity which I think I posted about higher up...and it does seem to be the best solution
 
 
STOATIE LIEKS CHOCOLATE MILK
12:33 / 12.01.02
Contrary to my previous post... I've just remembered some bloody good excuses for keeping the pound.
If you put a fiver and a tenner together and fold them properly, you get John McEnroe's head.
If you hold a (I think... haven't seen on in a while) tenner up to the light you get a very small cricketer with a very well-defined arse pissing in the Queen's mouth.
And if you fold a fiver properly, it looks like an arse.
Other than that, though... it does seem to be sentiment rather than economic nous that's dictating people's reactions. I don't know enough about economics to actually formulate a decent argument one way or the other, but let's face it, decimalisation wasn't that long ago. Our current currency is hardly a cultural necessity.
 
 
Mourne Kransky
16:58 / 14.01.02
undecided, tho it does seem unlikely that the Europhobic right could have a monopoly of wisdom on this issue. if we're always on the sidelines, can't really complain that the EU isn't a model public corporation like UK Gov. ha!

problem tho ~ the Guardian tells me it's 1 euro, 2 euro, 3 euro... no plural suffix, like sheep and O'Leary. can this be right?
 
 
STOATIE LIEKS CHOCOLATE MILK
10:16 / 16.01.02
Yeah.. as far as I can gather, the plural of "euro" is "euro".
 
 
Tezcatlipoca
19:54 / 17.01.02
Does this mean we'll no longer be able to 'spend a penny', but will have to start 'euronating'?

Sorry...couldn't resist
 
 
sleazenation
20:49 / 17.01.02
Oddly enough the plural for the euro is the euro mainly because in greek euros means urine....
 
 
Sauron
09:02 / 18.01.02
In light of the Greek, point, I can't believe how apt thatis.

But did you know the reason the Euro is called the Euro is because the Tory government fought against it being called the Florin because they felt this would be too easy a moniker for the British public to assimilate and that the word Euro would be much more alarming to the British public.

[ 18-01-2002: Message edited by: Sauron/ Illegal combatant #1273 ]
 
 
sleazenation
09:02 / 18.01.02
I have a strong suspicion that the ECU (european currency unit) was dropped as a as a name because theFrench had a currency of that name at some point in the past...
 
 
Fist Fun
09:02 / 18.01.02
Heh, heh the idea that the Euro was named on a destructive Tory whim is a good one, I don't think they were ever that influential though cos there are 14 other countries in the EU and stuff.
I think the name Euro was adopted cos, right now, it is bland and generic and thus doesn't seem to be favouring anyone. Will it still be a bland and generic name in twenty years tine though?
 
 
Liloudini
00:57 / 19.01.02
quote: I have a strong suspicion that the ECU (european currency unit) was dropped as a as a name because theFrench had a currency of that name at some point in the past... ....

I think they changed the name because in Portuguese the word sounds like it's arse
( é=is; cu=arse)... ...and all popular/pop musicians (not all but...) in countrie did lyrics playing with the meaning of the word.........
 
 
STOATIE LIEKS CHOCOLATE MILK
06:52 / 19.01.02
Personally, I think they should have named it after the European Monetary Union (called it a European Monetary Unit, or some such) because a) I'm a big Rod Hull fan, and b) the thought of having to wrestle six or seven emus across a counter just to buy a packet of fags gives me a wonderful mental image...
 
  
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