4 ms·

As a European I really don't want the euro to replace it as the world currency, but I don't think you're fair in your evaluation, the euro hardly has an history

by nolok 6y ago

As a European I really don't want the euro to replace it as the world currency, but I don't think you're fair in your evaluation, the euro hardly has an history of fiddling depending on today's need. Even what it had was very small compared to the others dollars included, and still matched the need to stabilize inflation at 2% as much if not more than the need to help the underlying countries' economies. And I say that as someone who believe we should have used it more to get out of the slump after 2008. Your comparison is incorrect on that point.

rossdavidh 6y ago
Not the OP, but I think the printing money in response to slow economy is what they are referring to. The U.S. Federal Reserve certainly did so as well, but the point is if the Euro is willing to tolerate (or even encourage) extremely low or even negative interest rates in response to a slowdown (unlike, say, gold, which has no central bank), then it is not much different than the dollar in that respect. Perhaps no worse, but also not really better, and so not much reason to switch from the status quo.
- nolok 6y ago
  I am not saying it is a reason to switch, I don't think it is, I'm just answering thos specific points. "Stability, predictable" is the euro's mantra, literally the only thing they follow is do whatever is needed to keep inflation at 2%, period. And then the specific line from parent I answered to > "The yuan, euro and pound all have a history of fiddling whenever it suits the government of the day" This is absolutely not true for the euro. I wish it was a bit more.
  - woodpanel 6y ago
    This is absolutely not true for the euro It is indeed true. The ECU was a basket of the currencies of the European Community member states, which in it were tied at a fixed rate (The ECU later on was converted 1:1 into euros as were the nations currencies exchange rates). That fixture already was enough 'fiddling' to enable speculators to "break The Bank Of England".
    - oblio 6y ago
      ? What does the mechanism used to create an entirely new currency by converting old currencies to it have to do with the day to day operation of the Euro after its creation? The € has about as much government intervention as the $ has. I'd be glad if someone could prove me wrong.
mohamedattahri 6y ago
I don't think inflation is a good indicator of the kind of stability needed here. What I believe matters the most is the the political stability of the EU as a project, and the eurozone as a community. Over the past 15 years, we've seen multiple episodes of: rise of autocratic rulers in the east, growing political influence of Russia, rise of right/left-wing anti-European political parties who want out of the euro, Germany threatening Greece with expulsion from the eurozone, etc. It's hard to imagine the world betting on the Euro for the next 50 years having seen this happen times and times again over the past decade or so.
- nolok 6y ago
  And through all the that, crisis of all sorts (debt, migrants, political, ...) the euro has not lost a single member, it has not jumped wildly in value from week to week, and it has not started including whatever country it could, keeping to its slow and controlled accession process. Even the far right in France and Italy has stopped putting "drop the Euro" into their manifesto, something that was one of their top 3 bullet points since its creationg and up to merely 5 years ago. Even they don't believe in its end anymore.
  - mohamedattahri 6y ago
    Agreed, but I'll quote Reid Hoffman's definition of trust as "consistency over time" as an indication that it will take decades to build that trust.
- mancerayder 6y ago
  Sure, except these same nations and states have had that problem for a lot longer than the life of the Euro, AND they had wars on top of it. For centuries. The Euro does mitigate that likelihood, even if there are protests and the rise of nationalism. There were protests and nationalism prior to any Euro. Now it's harder to produce a war industry when your industry and economy are so intertwined with another country's.

by nolok 6y ago

rossdavidh 6y ago

Not the OP, but I think the printing money in response to slow economy is what they are referring to. The U.S. Federal Reserve certainly did so as well, but the point is if the Euro is willing to tolerate (or even encourage) extremely low or even negative interest rates in response to a slowdown (unlike, say, gold, which has no central bank), then it is not much different than the dollar in that respect. Perhaps no worse, but also not really better, and so not much reason to switch from the status quo.

nolok 6y ago
I am not saying it is a reason to switch, I don't think it is, I'm just answering thos specific points. "Stability, predictable" is the euro's mantra, literally the only thing they follow is do whatever is needed to keep inflation at 2%, period. And then the specific line from parent I answered to > "The yuan, euro and pound all have a history of fiddling whenever it suits the government of the day" This is absolutely not true for the euro. I wish it was a bit more.
- woodpanel 6y ago
  This is absolutely not true for the euro It is indeed true. The ECU was a basket of the currencies of the European Community member states, which in it were tied at a fixed rate (The ECU later on was converted 1:1 into euros as were the nations currencies exchange rates). That fixture already was enough 'fiddling' to enable speculators to "break The Bank Of England".
  - oblio 6y ago
    ? What does the mechanism used to create an entirely new currency by converting old currencies to it have to do with the day to day operation of the Euro after its creation? The € has about as much government intervention as the $ has. I'd be glad if someone could prove me wrong.

mohamedattahri 6y ago

I don't think inflation is a good indicator of the kind of stability needed here. What I believe matters the most is the the political stability of the EU as a project, and the eurozone as a community. Over the past 15 years, we've seen multiple episodes of: rise of autocratic rulers in the east, growing political influence of Russia, rise of right/left-wing anti-European political parties who want out of the euro, Germany threatening Greece with expulsion from the eurozone, etc. It's hard to imagine the world betting on the Euro for the next 50 years having seen this happen times and times again over the past decade or so.

nolok 6y ago
And through all the that, crisis of all sorts (debt, migrants, political, ...) the euro has not lost a single member, it has not jumped wildly in value from week to week, and it has not started including whatever country it could, keeping to its slow and controlled accession process. Even the far right in France and Italy has stopped putting "drop the Euro" into their manifesto, something that was one of their top 3 bullet points since its creationg and up to merely 5 years ago. Even they don't believe in its end anymore.
- mohamedattahri 6y ago
  Agreed, but I'll quote Reid Hoffman's definition of trust as "consistency over time" as an indication that it will take decades to build that trust.
mancerayder 6y ago
Sure, except these same nations and states have had that problem for a lot longer than the life of the Euro, AND they had wars on top of it. For centuries. The Euro does mitigate that likelihood, even if there are protests and the rise of nationalism. There were protests and nationalism prior to any Euro. Now it's harder to produce a war industry when your industry and economy are so intertwined with another country's.