Posted on 06/03/2005 3:05:36 PM PDT by Cornpone
AMSTERDAM — Doom scenarios about the future of the euro are being heard in France and the Netherlands after both nations rejected the EU Constitution in recent referendums.
The president of the Dutch reserve bank DNB, Nout Wellink, has dismissed the speculation as "nonsense", while German Finance Minister Hans Eichel claims such talk is "irresponsible".
But the word is out: after two 'no' votes and a persistent economic malaise, doom and gloom scenarios are being heard about the future of the euro, Dutch newspaper 'De Volkskrant' reported on Friday.
"It is no longer unthinkable that the euro will bust," Leuven University international economics professor Paul de Grauwe said.
Underpinning his assertions, a professor with the European University in Florence, Rick van der Ploeg, said the present political reality could lead to the end of the euro.
Opponents to the euro, including Amsterdam University economics professor Sweder van Wijnbergen, warned in the 1990s Europe could not have a single currency because the economies of the various countries were so different. A single currency would also require a political union, he said.
Supporters of the currency said a political union would arise naturally due to the introduction of a joint currency.
However, De Grauwe said political integration appears to be dead after the no votes in the Netherlands and France, despite the fact "a political union is necessary for a healthy euro".
Van Wijnbergen says the growth rates of European economies are still widely different and it is no longer possible for individual nations to maintain different monetary policy or exchange rates to buffer economic imbalances.
If EU workers relocated to regions with good economic growth, economic differences would level out. But labour mobility does not and will never exist, Van Wijnbergen claimed.
However, he rejected the overnight dismantling of the euro due to the high costs involved and Van der Ploeg said the joint currency can still be rescued. This would depend on France and Germany reforming their labour markets, he said.
Anyone want to venture a guess as to the six month forward price of the euro?
Not exactly a recipe for success.
Thus Soros will have to SELL Euros and (horror) buy Dollars .....so contributing to the further decline in the Euro.
Schardenfreude
"No choice? LOL! Like the USD is the only currency in the world. There are others that are stronger you know."
Of course there are! But not necessarily in high demand. Business people only need so many Japanese yen or Norwegian crowns. Where the commerce is will determine which currencies are in demand.
"THEN trade to USD's"
The general consenses of the "experts" is a lower dollar including the fact the fact the Fed wants a weaker USD.
The rest is capitalism and I'm against it unless of course it's unethical. Warren Buffet is getting eaten alive with the rise in the dollar. Sometimes one makes a profit sometimes not.
The former Soviet Bloc countries will just build a wall to keep them OUT!!
I don't know, claim to be his hidden illegitite child and sue him for half his worth? Then send hundreds of thousands of free Chevy's and Fords to chinese people (with lots of faulty patented parts) to drive up demand and inflation in China.
Exactly -- that's why it won't work for diverse countries. It's the Tragedy of the Commons in another form.
LOL...Most likely. "Mr. Yushchenko, tear down this wall!"
No, the wall will be more to the west of Poland, Czech, Romania, Bulgaria. LOL
For Americans, rejoicing at the disorder and chaos in Europe after the rejection of the EU Treaty is foolish and infantile.
A strong economy and strong currency in Europe is good for America.
Maybe now, even though the new Government in France is just rearranging the deck chairs on the Titanic, Chirac will turn towards the US, as Tony Blair did, as its logical and most effective partner in dealing with the issues that are wrecking French society.
Hehehehehe!
:)
http://www.freerepublic.com/focus/f-news/1415676/posts
http://www.freerepublic.com/focus/f-news/1415675/posts
http://www.freerepublic.com/focus/f-news/1416105/posts
http://www.freerepublic.com/focus/f-news/1415986/posts
"Incidentally did you know John Kerry went to Vietnam and won a ton a of medals? No kidding its true. I heard Dan Rather report it on TV and everything."
No way!!!! Please provide a source!! LOL
If it crashed suddenly, I think you are correct. But what if the "Franco-German axis" (a phrase I hear frequently these days) keeps the euro and let the smaller countries get rid of it if they want. How would that hurt the global economy?
Those major players are Asian banks that are heavily infested in the euro. The assumption behind that "success" was that political integration would follow. But that isn't going to happen now.
You are correct that the euro isn't going away. But you can't base value on dreams and promises forever. Either the economies in the euro zone improve, or the euro will continue to decline. Let's hope it will be a gentle slide.
That statement might need some clarification.
Gotta wonder if Russia and Saudi are still talking about trading oil based on the euro or puking in a corner somewhere now. valuable the euro might be, but stable? hmmmm
Indeed, that's why the UK distrusts the EU because of France.
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