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Will the recession kill the Euro? Options · View
Rembacher
Posted: Friday, February 04, 2011 4:48:48 PM

Rank: Forum Guru

Joined: 10/16/2008
Posts: 1,106
With the current economic troubles in Greece and Ireland, and the unsteady economies of Portugal and Spain also creating worry, will we look back at this recession as the event that killed the Euro? Or ten years from now will the EU countries have found a way to make it work?
Jacknife
Posted: Saturday, February 05, 2011 8:24:12 AM

Rank: Forum Guru

Joined: 8/27/2008
Posts: 196
Location: United Kingdom
No, the germans and french are too engrained into it. if the Euro dies it won't be because of this recession.

Being in the UK, I am very glad we are not in the euro because we need control of our interests rates independent from external control. I'm quite happy for the euro to exist, i just don't want to be in it.
obscura
Posted: Sunday, February 06, 2011 8:01:04 PM

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Joined: 9/10/2010
Posts: 143
Location: Zef Side
In line with Friedmans prediction's, before the Euro was launched in 99, that it would fail at it's first financial crisis, I think it's collapse is inevitable, with corruption and division in economic performance and discipline ripping it apart. The EU was doomed from the beginning, it's like peanut butter and jelly sandwiches - it has never and will never work, no matter what the supporters say. As far as the Germans being too engrained, they are dreaming of a return of the Deutschmark and are rushing through it's printing already.

For conveniency, the Euro was great, but it causes issues when countries need respond by adjusting monetary policy in dire times. All the EU countries will revert back to their original currencies, NOT the UK Pound like I hear too many people saying. It's too strong and to ever think that the Germans or French would agree to it is rediulous.

The only way it can be prolonged is with complete union of goverments and policies within the EU and massive conditions imposed on the southern slackers (PIGS countries), including Ireland.

Rembacher
Posted: Sunday, February 06, 2011 8:14:46 PM

Rank: Forum Guru

Joined: 10/16/2008
Posts: 1,106
I do think the Euro is bound to fail, but I expect it to happen from the erosion of the lesser countries, rather than the lack of support of the financial powers such as Germany. From the start, a unified currency, without a unified financial policy was going to cause problems when the financial policies of member nations headed in different directions. I expect the PIGS, and any other struggling nations to realize eventually that the most effective way to ease their financial burdens is to return to their own currency so they can get away from the high valued Euro, and price themselves back in to the market.
Dimitri
Posted: Monday, February 07, 2011 3:55:30 AM

Rank: Active Ink Slinger

Joined: 11/22/2009
Posts: 19
Location: Athens
The euro will not fail for one simple reason ... the germans (and the french) will not let it fail.

I agree that without a unified financial policy between the Euro zone countries problems will always exist, but to think that the economies of Greece, Ireland and Portugal will cause a collapse of the Euro is far fetched.

Im from Greece and we are in deep s**t at the moment, but its not an irreversible situation, same applies to Ireland and Portugal.

Returning to the old currency is not an option right now for any of the above countries.

It might solve the problem short term but in long term it would be a mistake to be left out.
MrNudiePants
Posted: Monday, February 07, 2011 8:35:15 PM

Rank: Forum Guru

Joined: 8/10/2009
Posts: 2,141
Location: United States
obscura wrote:
In line with Friedmans prediction's, before the Euro was launched in 99, that it would fail at it's first financial crisis, I think it's collapse is inevitable, with corruption and division in economic performance and discipline ripping it apart. The EU was doomed from the beginning, it's like peanut butter and jelly sandwiches - it has never and will never work, no matter what the supporters say. As far as the Germans being too engrained, they are dreaming of a return of the Deutschmark and are rushing through it's printing already.

For conveniency, the Euro was great, but it causes issues when countries need respond by adjusting monetary policy in dire times. All the EU countries will revert back to their original currencies, NOT the UK Pound like I hear too many people saying. It's too strong and to ever think that the Germans or French would agree to it is rediulous.

The only way it can be prolonged is with complete union of goverments and policies within the EU and massive conditions imposed on the southern slackers (PIGS countries), including Ireland.


Peanut butter and jelly sandwiches work quite well for me... Whistle

subside
Posted: Friday, February 11, 2011 1:49:19 PM

Rank: Active Ink Slinger

Joined: 12/2/2010
Posts: 11
Interesting topic. I believe the euro will fail. I am surpride it has lasted this long. My rsons ar based on my experience, europen background and studies.

1. I have traveled throughout western europe since the age of 9. My parents were born and lived for some time in italy. The diversity throughout europe coupled with the suspicious nature of each european contry is great. Each country wishes to maintain its individuality. There is an inherent conflict betwwen the individual european countries that make unification-in financial terms difficult. This inherent distrust, which is examplified in many areas. For example:
a. Per the NATO charter, the Supreme Commander must always be an american. Why? Because the french dont trust the Germans and their industial ability; the English and the French despise each other; and the British remember what Germany did to Britain in two wars.
b. Each european country is unique-language, culture, food, pride and norms. They are fiercely protective of their identity. It is difficult for a country to surrender much of its economic control/or its dependence to another individual or group of countries. By definition, it would be equivqlent to losing part of its individual itdentity and control what future direction it wishes to purse.
c. the mere fact that britan, and others, such as Switzerland and some of the scandanavian countries did not join the euro is because of the distrust and fear associated with giving up economic individuality.
2. The stronger european economies, especially the German, French and to a degree the Italian, will only be willing to bale out countries for so long. They tend to be more rigid and focused when economic problems develop. The germans already spent Billions when they incorporated East germany. France has decided the fat government jobs and union perks are not warranted and a drain on the economy. They cant afford to give up their ecomonic vitality for the sake of countries that run ampant with government payouts-Greece, Spain, Portugal and to a certain degree Italy
3. One of the main premises of currency unification, coupled with non tariffs on trade, was that trade would be facilitated between the countries. Statistics, by one acoount that I read, demonstrate that only about a 20 pecent trade increase has occurred. This is because although there is only one currency, regardless as to the politicians, the individuals of each country jealously safeguards its economy. For instance, travel to itakly and try to find Spanish wine or french wine in the local store. very difficult at best. And what you do find is not that great. In France, try to find Italian wine or Italian clothing. Not easy. In Italy, Spain and greece, you will not find any olive oile other than what was made in that country.
4. The people that i have met during my recent visits to France, Italy, Belgium and Germany clearly indicated they are not happy with the euro as a currency.

Thank you for this opportunity, I apologize for this lenghty comment, but I thought the information was necessary to advance my position.


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