
Why the Euro failed - jajag
https://qz.com/1377098/why-the-euro-failed/
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twblalock
The Euro didn't fail. It has flaws (as did many European currencies that
existed before the Euro), but no EU member state has abandoned it, because the
upsides outweigh the downsides and the costs of leaving would be enormous.
Even Greece didn't do that, although they did come close.

~~~
ackidacki
Europe's most successful countries are the ones with their own currencies.
It's easy to compare the differences in growth and debt with those in and out
of the EZ. Ireland is the only true exception & it's for reasons relating to
its tax policies.

~~~
twblalock
What's your standard of success? Germany has the largest GDP in Europe by
about a trillion dollars and uses the Euro.

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ackidacki
GDP growth, consumption growth, manageability of debt, standard of life,
employment rate. The central question being not "how big is it because of the
euro" but "is it better because of the euro"

Germany and Benelux are high but problematic in areas of consumption. 41% of
the German Economy is export orientated (meaning consumption is extremely low)
and while employment rates are high, employment isn't completely 'full time',
wages lag productivity significantly (pay is relatively bad) and debts in the
private sector are heavily problematic. Not to mention Germany's population
demographics don't have a bright future.

Contrast this to economies with their own currencies - the UK, Sweden, Norway,
Poland, Denmark - which aren't dogged down by such problems. Sweden had a
housing crash last year and is managing just fine despite it.

If the EZ had another crash it would be debatable whether it can still hold
strong - a point reinforced by France's Finance Minister himself.

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NicoJuicy
What do you mean, problematic on areas of consumption? ( From BE, fyi )

~~~
ackidacki
In simple terms most of Benelux & German GDP doesn't make its way into
citizens pockets, as a result pay is relatively poor and has an impact on the
standard of living. This is a result of official policy (Tarifeinheitsgesetz)
meant to make labour more competitive.

If you look up GDP it is pretty big, but if you look up wages you will find
its relatively bad.

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monkeydreams
The article assumes that the Euro has failed and goes on from there. I would
like to see what realistic scenario could have produced the implied Utopian
vision the author implies is the only criteria for success.

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doe88
The death/failure of € is greatly exaggerated.

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kyriakos
aside from the economic issues which I believe are exaggerated, being able to
travel around EU and not caring about exchange rates etc is really nice.
moreover I order from online shops around europe and the only time I need to
mentally convert prices is for amazon.co.uk.

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Theodores
There is some baby and bathwater going on here. An assumption that everything
to do with the Euro is bad and an assumption that everything bad is to do with
the Euro.

For some people in Europe the Euro was a bit like when decimalisation happened
in the UK - suddenly everything in every shop was marked up to be that bit
more expensive. But people got over that, much like how people got over
decimalisation in the UK, nobody wishes for 'pounds, shillings and pence' any
more.

Trade is so much easier in Europe without the funny little currencies that
there used to be. You don't get fleeced by people exchanging money from Lira
to Francs to Deutschmarks to Irish Pounds and so forth. This helps the little
guy as well as normal sized businesses.

In the pre-Euro days it was a regular thing to read stories about how places
like Italy had shaved a few zeroes off their Lira due to hyperinflation. We
don't have those stories now. I think the Euro has something to do with that.
At least everyone in Europe has a currency that is worth something, before
then half the European currencies were as useful as Monopoly money or crypto-
ponzi-tokens.

There was also a lot of speculation on currencies in the pre-Euro days.
Effectively 'pump and dump' schemes, some capitalist fat cats would get bored
and pick on a currency to destroy. The only way to control this is to have
restrictions on how much money people could travel with, so in pre-Euro days
you might find yourself off on holiday to Greece or somewhere and not be able
to take much more than pocket money with you.

History is generally written by people with an agenda who don't specifically
lie to make their point (sell more books), instead they lie by omission. The
Euro was not some dastardly neo-liberal scheme to economically colonise places
like Greece and make things difficult for the German taxpayer. Saying so in
fake academic b.s.-speak does not make it so. Europe has difficulties with
things like Brexit, there is no need for reject 'scholars' from the IMF who
aren't even European to stir people up into nationalistic fervour.

What next? An 'academic' who knows nothing about America could sell books on
how the dollar has been a failed experiment and how the U.S. needs to have
separate currencies per state. Sounds great, don't see why those nice folks in
California should be bailing out those dossers in Detroit, right?

How well would business work inside the U.S. if you needed to change your New
Mexico Pesos into Arizonan Pobble Beads each time you ventured out from
Albuquerque for a day trip to the Grand Canyon? What if you only had Wyoming
Whuffies and the stall at the inter-state border took 10% commission and
claimed they only exchanged at a fraction of what you bought them for the day
before?

That would make no sense at all, neither would it make any sense to have the
Eurozone broken up into lots of currencies that can be played by the stock
markets of London and New York for speculative gain.

~~~
nopriorarrests
>In the pre-Euro days it was a regular thing to read stories about how places
like Italy had shaved a few zeroes off their Lira due to hyperinflation.

>We don't have those stories now. I think the Euro has something to do with
that.

Yes, but it's not like Italian budget magically turned to proficit because of
euro adoption. It still contains deficit, the one which EU is not happy about,
and they are currently fighting with Italy. Maybe if lira was still italian
currency, Italy devalued it a bit and that would be the end of the story.

Instead, there is a eurozone-wide problem of how to deal with populist italian
government, and the cost of this problem is... €2.1 trillion (that's the
amount of italian debt).

So, the problem was not resolved. It just was shifted into the future, with
unclear implications.

~~~
chronid
Well, I see forcing member states to be fiscally responsible (Italy's current
expenditures - _after removing debt /interest repayments_ \- are _curiously_
forever increasing even under the worst "austerity") something a union should
do. The problem is the Euro is _not enough_ to do so.

Devaluation won't fix Italy's problems in the long term, it just shifts them
into the future. The devaluations of the lira in the last ~30 years of the
last century and the flattening economic growth in the '90s are there to prove
it. You cannot keep drugging your economy forever, you'll pay for it in the
end.

