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Old 11-09-2011, 08:18 AM
 
Location: VA soon to be NC
1,109 posts, read 1,981,221 times
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I mean why was it created? I mean whats the point of having a currency that many countries use . When one goes bankrupt then the powerful ones have to bail them out. This does not make sense. Germany and UK should not have to bail out Greece or Italy just because they cant manage their in-country debt.
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Old 11-09-2011, 08:53 AM
 
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makes a level playing field. The world is tired of US domination and bullying.
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Old 11-09-2011, 08:53 AM
 
Location: The Triad (NC)
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"The United States Of Europe" need(ed) a common currency...
to go along with all the other common things they were doing.

hth
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Old 11-09-2011, 09:06 AM
 
Location: VA soon to be NC
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Look how well thats working out for them.
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Old 11-09-2011, 12:50 PM
 
8,308 posts, read 8,583,412 times
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Quote:
I mean why was it created? I mean whats the point of having a currency that many countries use . When one goes bankrupt then the powerful ones have to bail them out. This does not make sense. Germany and UK should not have to bail out Greece or Italy just because they cant manage their in-country debt.
Perhaps, if you lived in Europe or had substantial business dealings there you would understand the advantage to creating a common currency.

Get out a map. None of the nations are very large. Texas is larger than any Western European country that I can think of. The countries have always out of necessity traded with one another because none are self-sufficient. Now imagine yourself as a businessman who has to travel around Europe to sell machine parts, oil, wine, or automobiles. Every time you cross a national border you have to go to a bank and change your Deutsche Marks into Spanish Pesatas, French Francs, Dutch Guilders, Italian Lira, or Greek Drachma. Not only do you spend a lot of time at the bank, but every time you go there you find hefty fees for exchanging your currency. All the currencies fluctuate in value. Many times the profit or loss your business earns has more to do with what happened to exchange rates that day or week than it has to do with the products or services that you are selling.

The same thing was true for tourists. Its very easy to cross a national border in Europe by train. You may even cross more than one in a single day. Every time a tourist wanted to go to a country there was a always a trip to the bank. There was always the issue of fees to exchange currency. It certainly didn't stop tourism. However, it was a factor in hindering it and the losses could be calculated in billions of Euros or Dollars.

The only people benefiting from the old system were the banks.

Now, imagine all that is replaced with a single currency. No more trips to the bank. No more worrying about exchange rates. What effect do you think that would have on business? The simple answer is that going to a single currency significantly improved the business climate in Europe. Perhaps, more importantly it made business success much more dependent on producing high quality goods and services than upon the financial wizardry involved in guessing what exchange rates would be.

Europe today is learning the lesson about what happens when you go to uniform currency without enough controls over the monetary and fiscal policies of member nations. There is nothing wrong with the concept of a single currency for these countries. However, in order for it to work its going to require more centralized control over at least some aspects of the economic policies of member states.

Rather, than talk doom and gloom over the situation in Europe, I'll postulate that these countries will get their act together and solve their monetary issues. It will be painful for some people in some countries. However, these countries have democratic political systems with a large middle class population. It is in their interest to fix these problems. These problems are the growing pains of nations developing new financial systems. They are not the death knell of the civilized world.
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Old 11-09-2011, 04:39 PM
 
Location: Near a river
16,045 posts, read 18,263,811 times
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Quote:
Originally Posted by Novadhd5150 View Post
I mean why was it created? I mean whats the point of having a currency that many countries use . When one goes bankrupt then the powerful ones have to bail them out. This does not make sense. Germany and UK should not have to bail out Greece or Italy just because they cant manage their in-country debt.
It was supposed to strengthen Europe as a coalition. As you point out, the back side.
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Old 11-09-2011, 04:40 PM
 
Location: Near a river
16,045 posts, read 18,263,811 times
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Quote:
Originally Posted by markg91359 View Post
Rather, than talk doom and gloom over the situation in Europe, I'll postulate that these countries will get their act together and solve their monetary issues. It will be painful for some people in some countries. However, these countries have democratic political systems with a large middle class population. It is in their interest to fix these problems. These problems are the growing pains of nations developing new financial systems. They are not the death knell of the civilized world.
I wonder where Russia will be in all this...will it rise again?
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