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There is not an economist I know of, left or right wing, who believes that joining the EUR was beneficial for weak economies. Especially for Italy, proved to be

by atmosx 7y ago

There is not an economist I know of, left or right wing, who believes that joining the EUR was beneficial for weak economies. Especially for Italy, proved to be catastrophic. Greece was always a basket case but Italy was doing pretty well before joining. Joining the EUR means literally giving up sovereignty. The Iron Lady explained that very concisely in her last speech as a PM in the House of Commons: “He who controls the interest rates in Europe, controls Europe”. Couldn’t be more “spot-on”. Regarding the topic. The UK never considered itself part of “Europe”. There historical and cultural facts and the events of the 20th century that IMO played a major role in keeping their own currency.

bleuedejapan 7y ago
Italy's problem was never the Euro. Italy is the largest political mess of Europe, and the amount of structural problems is staggering. Its industries kept it running, and China's growth as a manufacturing centre, together with the accession of countries with less structural problems have taken a toll on the Italian industry. If there was no Euro, Italy would still be ruined anyway.
barrkel 7y ago
It's a two way street, the sovereignty argument. A bigger entity has different sovereignty to multiple smaller entities. The British pound is worth about half what it was when I first moved to the UK - that's not the kind of sovereignty that's kind to my pocket. A bigger currency is a more stable store of value for citizens. That's not worthless, independent of the lack of friction in international transactions - not a major friction online, but really nifty when you cross a land border every day.
- raxxorrax 7y ago
  And yet, the argument here is that a weak currency is advantageous for an economy. Advanteageous relative to countries also having the Euro burden perhaps. But even just from a marcoeconomic perspective there seem to be distinct contradictions everywhere.
  - MagnumOpus 7y ago
    > weak currency is advantageous for an economy Some nuance please... Your fallacious point of view is pushed by certain lobbying groups because a weak currency is - horribly harmful to inhabitants' living standards (how many days of disposable income does it take a developer to buy an iPhone in the UK vs in the US? About three times as many.) - very helpful to the shareholders of exporting companies (cheap labor and high profit margins)
    - atmosx 7y ago
      How much does it cost cancer treatment in the US vs the UK?
maximente 7y ago
well yeah, but the sovereignty argument was always part of the deal. it's not like it was sprung upon member nations that they suddenly had to accept a common currency out of nowhere. FWIW US states are prevented from having parallel currencies as well; that's also loss of autonomy. it's not necessarily horrible, just a different set of rules. you are correct in that it makes monetary policy impossible to control from the "outside". obviously that's not a great outcome for various economies in the EU, including the ones you have listed.

by atmosx 7y ago

bleuedejapan 7y ago

Italy's problem was never the Euro. Italy is the largest political mess of Europe, and the amount of structural problems is staggering. Its industries kept it running, and China's growth as a manufacturing centre, together with the accession of countries with less structural problems have taken a toll on the Italian industry. If there was no Euro, Italy would still be ruined anyway.

barrkel 7y ago

It's a two way street, the sovereignty argument. A bigger entity has different sovereignty to multiple smaller entities. The British pound is worth about half what it was when I first moved to the UK - that's not the kind of sovereignty that's kind to my pocket. A bigger currency is a more stable store of value for citizens. That's not worthless, independent of the lack of friction in international transactions - not a major friction online, but really nifty when you cross a land border every day.

raxxorrax 7y ago
And yet, the argument here is that a weak currency is advantageous for an economy. Advanteageous relative to countries also having the Euro burden perhaps. But even just from a marcoeconomic perspective there seem to be distinct contradictions everywhere.
- MagnumOpus 7y ago
  > weak currency is advantageous for an economy Some nuance please... Your fallacious point of view is pushed by certain lobbying groups because a weak currency is - horribly harmful to inhabitants' living standards (how many days of disposable income does it take a developer to buy an iPhone in the UK vs in the US? About three times as many.) - very helpful to the shareholders of exporting companies (cheap labor and high profit margins)
  - atmosx 7y ago
    How much does it cost cancer treatment in the US vs the UK?

maximente 7y ago

well yeah, but the sovereignty argument was always part of the deal. it's not like it was sprung upon member nations that they suddenly had to accept a common currency out of nowhere. FWIW US states are prevented from having parallel currencies as well; that's also loss of autonomy. it's not necessarily horrible, just a different set of rules. you are correct in that it makes monetary policy impossible to control from the "outside". obviously that's not a great outcome for various economies in the EU, including the ones you have listed.