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Old 06-26-2019, 03:45 PM
 
Location: western East Roman Empire
6,600 posts, read 10,664,793 times
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Quote:
Originally Posted by DKM View Post

They are holding out for a more fiscal union before taking the plunge.
The Danes didn't really want the Maastricht Treaty back in 1992, but it was rammed down their throats anyway, the palliative being the opt-out from the single currency, I believe.

Fast forward to today, do you really think the Danes would want to be in fiscal union with countries like Italy and Greece in the foreseeable future?

Italy and Greece do not have a foreseeable future, I know, I lived and paid taxes in both countries for a long time.

Maybe in 50 or a 100 years, but not in any foreseeable future.

Right now the balance of risk is leaning the Danes (and others) away from further integration, not toward it, unless if it were restricted to Core Europe.

The Danes could sovereignly unpeg themselves tomorrow, while the likes of Italy and Greece are all twisted in a strait-jacket with almost no wiggle room.
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Old 06-27-2019, 06:59 AM
 
5,103 posts, read 2,743,062 times
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Quote:
Originally Posted by bale002 View Post
The Danes didn't really want the Maastricht Treaty back in 1992, but it was rammed down their throats anyway, the palliative being the opt-out from the single currency, I believe.

Fast forward to today, do you really think the Danes would want to be in fiscal union with countries like Italy and Greece in the foreseeable future?

Italy and Greece do not have a foreseeable future, I know, I lived and paid taxes in both countries for a long time.

Maybe in 50 or a 100 years, but not in any foreseeable future.

Right now the balance of risk is leaning the Danes (and others) away from further integration, not toward it, unless if it were restricted to Core Europe.

The Danes could sovereignly unpeg themselves tomorrow, while the likes of Italy and Greece are all twisted in a strait-jacket with almost no wiggle room.
I really donít know enough about the Italian and Greek economies. Is the primary issue around a lack of industry/job growth while being saddled with a large deficit and entitlement program?
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Old 06-27-2019, 07:16 AM
 
2,730 posts, read 1,747,774 times
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Quote:
Originally Posted by Drewjdeg View Post
That's basically an illusion insofar as their currency is pegged to the Euro.
They still have the option to unpeg though, if needed or desired, yes?

I bet Italy and Greece could have used that option to deal with their crises.
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Old 06-27-2019, 08:33 AM
 
8,309 posts, read 9,063,524 times
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Quote:
Originally Posted by bale002 View Post
The Danes didn't really want the Maastricht Treaty back in 1992, but it was rammed down their throats anyway, the palliative being the opt-out from the single currency, I believe.

Fast forward to today, do you really think the Danes would want to be in fiscal union with countries like Italy and Greece in the foreseeable future?

Italy and Greece do not have a foreseeable future, I know, I lived and paid taxes in both countries for a long time.

Maybe in 50 or a 100 years, but not in any foreseeable future.

Right now the balance of risk is leaning the Danes (and others) away from further integration, not toward it, unless if it were restricted to Core Europe.

The Danes could sovereignly unpeg themselves tomorrow, while the likes of Italy and Greece are all twisted in a strait-jacket with almost no wiggle room.
The Danes have at least once and maybe twice defeated adopting the Euro via nationwide vote. The Danes have instituted something similar to Aussie economic model........they will tolerate sub-optimal economic output (roughly 18% lower than The US per person) and suboptimal unemployment rates (about 25% worse than The US) for several reasons one is to make recessions less severe and maybe less frequent and other is running a cool economy makes pegging the DKK to the Euro fairly straightforward.

And you are right at any moment should Denmark's central bank decide to unpeg they could do it.......just like the Swiss did a few years ago.
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Old 06-27-2019, 10:30 AM
 
11,977 posts, read 17,487,251 times
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Why doesn't Denmark just use the Euro?

Because countries like Italy and Greece do.
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Old 06-27-2019, 11:34 AM
 
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Quote:
Originally Posted by Drewjdeg View Post
Sure, but they have zero control in the status-quo. If they really cared about distancing themselves from the EU, they wouldn't peg their currency. Yet, here we are decades later.
It's a valid point. But a currency peg can (theoretically) be changed more easily than joining the Euro. Of course, maybe it's just about the elites allowing the Danes to maintain the illusion of sovereignty.
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Old 06-27-2019, 02:12 PM
 
Location: western East Roman Empire
6,600 posts, read 10,664,793 times
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Quote:
Originally Posted by SWFL_Native View Post
I really donít know enough about the Italian and Greek economies. Is the primary issue around a lack of industry/job growth while being saddled with a large deficit and entitlement program?
In a nutshell, yes.

In short, the Italian economy made great strides in the four decades after WWII, but starting in the 1990s the policy has been to conserve the gains of those generations at the expense of current and future generations, going on a third now.

Greece is different, but I don't care the characterize it right now, except to say that their system is a badly grafted model of the European socialist system and they were living off the coattails of Core Europe for a long time until they went over the top and the Germans and their closest allies finally put their foot down.

Take that as you will.

And take care!
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Old 06-27-2019, 03:41 PM
 
Location: Ohio
19,875 posts, read 14,217,545 times
Reputation: 16070
Quote:
Originally Posted by Drewjdeg View Post
Why don't they just join the eurozone so they can have an actual say in the their monetary policy?
Because the EU dictates which countries you can do business with.

EU economic policies certainly benefit Germany and France, but it doesn't logically follow that Denmark benefits.

Also, there are strict requirements for budget deficits, and noncompliance results in sanctions.
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Old 06-27-2019, 06:46 PM
 
Location: Wasilla, AK
7,227 posts, read 4,119,698 times
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Quote:
Originally Posted by Mircea View Post
Because the EU dictates which countries you can do business with.

EU economic policies certainly benefit Germany and France, but it doesn't logically follow that Denmark benefits.
After all, how many hams do you think Denmark can sell to Iran?
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Old 06-28-2019, 12:19 AM
 
26,075 posts, read 28,473,598 times
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Quote:
Originally Posted by Mircea View Post
Because the EU dictates which countries you can do business with.

EU economic policies certainly benefit Germany and France, but it doesn't logically follow that Denmark benefits.
Makes sense.

Quote:
Originally Posted by Mircea View Post
Also, there are strict requirements for budget deficits, and noncompliance results in sanctions.
Meh, those requirements are a joke, IMO. If they actually followed their rules, Greece and Italy would never have been admitted or at least would've been kicked out a long time ago. And they're not the only offenders. Lots of Euro countries flout the deficit rules all the time. In any case, Denmark is more fiscally responsible than most other European countries (most other countries...period). Their Debt to GDP ratio is 34.1%, much lower than countries like Germany and the Netherlands, who are seen as fiscally responsible; so complying with deficit and debt rules wouldn't be a significant issue for Denmark.

https://tradingeconomics.com/denmark...nt-debt-to-gdp

Last edited by mysticaltyger; 06-28-2019 at 12:31 AM..
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