Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
IMHO the only way you can have a "successful Euro" in the long term is to do a lot more to strengthen European federalism such that Germany just accepts that they have to subsidize Greece just like Massachusetts accepts that it has to subsidize Oklahoma, with that said there is no way in hell that will happen.
Understandable; would you think a solution to this, is devaluing its currency?
The entire Euro thing was intentionally set up to spread the load, balance the risk and make everything more "fair". It is redistribution of wealth 101, and that concept always fails.
No it wouldn't because the problems with the euro remain. All currency unions needs to have a transfer union to work. At least they need a banking union, and the events in Cyprus show that we don't even have that.
Without poor countries the euro would have been something like 1.7 EURUSD instead of 1.3. Some countries that would be in trouble due to that is Finland, France and possibly Belgium. Finland and France already has a trade deficit. Imagine how they would do if currency was much stronger.
A currency union without banking or transfer union will eat up its weakest members who will be forced to do painful internal devaluation, in a recession while experiencing capital flight.
A unitary currency has several drawbacks. One is that the country loses control of monetary policy. In the u.s. if there is a slump, the Fed can expand the money supply, drive interest rates down and mitigate the slump. Another drawback is that the value of the currency is fixed by outside forces. If Greece had its own currency, the value would fall, making its products more competitive and encouraging cheap tourism. By using a central currency Greece is stuck with a high valued currency and can only unwind with years of internal deflation.
These are sovereign nations giving up their sovereignty by using one currency. Remember when Germany said that they were considering going back to the Mark in 2008 during the economic crisis?
It is true that the currency is likely to stay, but that does not mean it is a success.
If it is such a success, then why did this happen. Is it just because all of those countries are lazy and deserve it, or because the euro is flawed?
It seems to me that one country is benefiting at the expense of the rest of euro-zone.
Perhaps you are confused with the two terms "Euro" and "European Union". Euro is the currency, and EU is a union of nations. They are going through a recession like us, but that does not mean the Euro and EU are failures.
No, it is not that one country is benefiting, there are many successful countries within the union which are happy to be in it.
This implies that it was a miserable failure, and I don't agree with that suggestion. I think Euro will be fine and it won't be going anywhere.
Then make your argument for the Euro. How does a currency derive strength when most of the nations involved are laggards economically?
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
