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Sweden chose not to join the Euro. Oddly - European nations that don't use the Euro are generally much better off: Norway (though not EU), Denmark, Sweden, UK.
by edblarney 10y ago
Sweden chose not to join the Euro.
Oddly - European nations that don't use the Euro are generally much better off: Norway (though not EU), Denmark, Sweden, UK.
In hindsight, the UK's decision to not join the Euro is widely accepted as smart.
The Euro is effectively a 'hard Germany currency' that has entrapped the periphery of Europe into a monetary system that massively favours the Germans. Maybe it could have worked out - but from 2000-ish to 2008 - world bankers assumed the Euro meant 'collective risk pooling' so the periphery countries loaded up on cheap debt. But when the crash happened - we discovered there were going to be no bailouts - leaving the periphery with a massive balance sheet problem, and the total inability to manage monetary policy - or rather - they're stuck on a 'strict currency' which favours Germany who already had several advantages.
But I agree, if Scotland does go indy, then it may very well introduce a pegged currency, which makes sense as something temporary.
- BjoernKW 10y agoThis is not entirely true. The Netherlands, Austria, Luxembourg, Belgium and France for example fare just fine with the Euro. The problems you mentioned (and some non-Euro countries being better off) are caused by structural problems in those countries, which are only tangentially related to the common currency. From an economic point of view those countries probably shouldn't have adopted the Euro so quickly in the first place but were allowed to do so nonetheless for political reasons.
- RobertoG 10y agoIt's difficult fix "structural problems" when the monetary policy is decided by others, and not following your interest. Whoever thinks the Euro is a success has not been paying attention and probably don't understand how monetary policies (and money) works. The Euro-area countries has been forced to follow procyclical policies, in a time when govern spending was necessary.
- informatimago 10y agoWe don't fare just fine with the Euro. By having fixed exchange rates between countries, the only remaining economic variable that can be adjusted, is employment. (It doesn't matter if it's public or private employment). This is why the EU tells France and other countries to reduce the number of public employees, and why France has been losing one 1000-employee enterprise every day since the introduction of the Euro. And the countries you listed are not the only ones in the Euro, think about how Spain, Portugal, Italy and Greece are faring with the Euro! It's worse than a war!
- kpil 10y agoFrance is a bank crisis waiting to happen though...
- Symbiote 10y ago> Denmark The Danish Krone is pegged to the Euro, within a very tight margin. http://www.xe.com/currencycharts/?from=DKK&to=EUR&view=5Y http://www.xe.com/currencycharts/?from=DKK&to=EUR&view=5Y And you've missed Poland, Hungary, Czechia, Romania and Bulgaria; these countries don't use the Euro, but aren't usually considered much better off.
- edblarney 10y agoWell, Eastern European countries are growing much more rapidly than the others. But they are definitely different - they were closed economies, way behind, and there's advantages to their having the Euro (should they get it). Which is different from Greece/Spain. Moreover, they want to be in the Euro :) the Swedes, Danes, English etc. chose to not use it.
- Y_Y 10y ago> Oddly - European nations that don't use the Euro are generally much better off So is it that countries that took the euro were hurt by it, or that countries with already strong currencies chose not to take the euro?
- RobertoG 10y agoIt could be both. Anyway, it's not so difficult to see why to have the flexibility of adjusting your currency, independently of the rest of the system, to suit your current situation is a good thing. micro-services anyone?