Posted on 12/13/2006 12:18:26 AM PST by MadIvan
The achievement of economic and monetary union by 11 European countries in 1999 was based on a deal: Germany, the strongest member, gave up the Deutschemark on the understanding that the others would not debauch the new common currency, the euro. Nearly eight years on, that inherently doomed project is coming apart at the seams.
The fundamental problem is that the economies of the "Germanic" members have diverged so far from those of the "Latin" bloc that the single interest rate set by the European Central Bank (ECB) is becoming a huge political liability.
An inkling of this came last year, when Italy's Northern League called for a return to the lira. It has now been taken up by the French prime minister, Dominique de Villepin, who has said that members must regain control over exchange-rate policy. Since that would give them indirect leverage over interest rates, it would strike a mortal blow at the ECB's independence.
The threat to the cohesion of the eurozone is best illustrated by comparing France and Germany. The second, having established a competitive advantage over the southern bloc of about 30 per cent over the past decade, is facing incipient inflation and favours a tight monetary policy. The first, devastated by the strength of the euro against the yen, dollar and renminbi, would like a halt to interest-rate rises. While the French political establishment has already turned against present policy, its abandonment would undermine support for the EU in Germany. The two "motors" of Europe are pulling in opposite directions.
What was once seen as a giant step towards "ever-closer union", as prescribed by the Treaty of Rome, is becoming an intolerable straitjacket. Common sense would suggest loosening the sleeves, but it may well be ignored as each of the camps cries foul. Britain found itself in a similar quandary before it left the ERM in 1992. For the eurozone members, there is, unfortunately, no immediate way out.
The euro is not going away. Even the US Fed Reserve believes it is good for international trade, so I suspect that the US will do what it can to prop it up.
My opinion is this. We have nothing in common with you. While the Continent has been polluted with revolution and war, we've been stable, slowly evolving our government over millenia. We believed in capitalism before it was a twinkle in the eyes of the Continent. Our tax system, regulation, all are much freer than yours. We don't agree and we will never agree. I don't want you shoving your way down my throat, particularly since France's unemployment rate, and Germany's unemployment rate shows - it doesn't work.
So take your pan-Europeanism back to Brussels. Or better still, shove it up your arse.
Ivan
Ivan
You stated your case very well.
I was glad Britain rejected the Euro. I have always been of the opinion that the USA, Britain and Australia have a lot more in common than any one of those when compared to any European country.
And it is more than common language.
I was in euro-trash land in August. I came away convinced it was a classic tower of babel. It was created out of jealousy it the self deluded notion that they could become America while still being a socialist pie hole. It has nowhere to go but down and its next currency is the "camel dung" or whatever their very soon to be Islamic masters decide it should be.
Your assumption that Britain is inevitably bound to join a pan-European political entity has impressive historical precedents. Hitler and Napoleon believed this too.
The economic winner in this dispute will be the side that finally rejects Islam and Islamicization no matter what the circumstances of the euro might be. Neither Britain nor France seem to be doing very well on this front at the moment. Nor is the US.
The Lord builds the nations, and tears down the nations; frustrating their plans....
Very good point. The euro is not the cause of Europe's problems. As I recall, many on the pre-euro national currencies (especially the lira) were essentially worthless next to the mark and dollar.
The French are upset because they realized that the European economic integration they have been pushing for decades means that the French welfare economy will be fully exposed to competition from places such as Poland and Denmark. That is why French voters rejected the EU constitution, and that is why the French are thinking about going back to the franc.
From my point of view in America, it is better for us to deal economically with one big jurisdiction in Europe (one currency, one set of regulations, one set of tariffs, etc) than with 30 smaller separate ones.
This move by OPEC states to abandon the dollar for the euro should have some interesting effects!
We were stationed in Germany when they switched to the Euro, I was not all that jazzed about it either...I was so glad that England did not cave and join in! Wish the Irish had been thinking straight.
bump for later
I don't know abou this...right now the Euro is beating the snot out of the $.
Wait till the euro goes to $1.50 USD. The mainland socialist euros will be shyting bricks because no one will buy their exports. So they will have to increase taxs even more to support their nanny state welfare programs.Should be fun to watch.
Capitalism>socialism all has been,always will be.
I wonder what the Euro-In-Dollar-Out doom-and-gloomers would say to that. In Russia, e.g., they have already burried Mr. Greenback and are dancing on its imaginary grave. I wonder what tune they are going to sing when they will have to buy back the bucks at twice the cost.
And, BTW, Hail to Mr. Quid too.
taxs=taxes
bloody typos...we need an edit feature!
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