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Did the Greek crisis wipe most anti-Euro objections? How? At least for me the Greek crisis tipped me over to the side that thinks the Euro was a colossal mistak

by Ma8ee 6y ago

Did the Greek crisis wipe most anti-Euro objections? How? At least for me the Greek crisis tipped me over to the side that thinks the Euro was a colossal mistake. (I’m strong proponent of the EU, but the euro only works well for Germany).

toyg 6y ago
Countries that were flirting with the idea of backtracking on the Euro, like Italy and (to a lesser degree) Spain, have effectively removed the item from their political agenda for the time being. It has become radioactive in electoral terms. Even the anti-EU (and Putin-backed) parties stopped mentioning it. People are scared shitless of ending up like Greece did in those fateful weeks, without functioning banks and with a bankrupt State. It’s better to have an expensive mortgage for a solid house, than living for free in a shack. The Euro is not perfect but you cannot realistically have a strong EU in the long run without a common currency. More tweaking is absolutely necessary (and effectively happening, slowly and under the political cover of this or that crisis, by introducing more mechanisms to move more money out of Germany), but losing a common currency would be the end of the project.
- Ma8ee 6y ago
  You do know that a big part of EU isn’t in the Euro zone? The problem with the Euro is that countries can’t devalue their currency to become competitive after any bubble. So Greek, Spain etc. have to suffer much more than necessary. Not only Southern European countries that some argue had themselves to blame, but also countries like Finland. Germany who’s goods are cheaper on the global market is of course happy.
  - toyg 6y ago
    > You do know that a big part of EU isn’t in the Euro zone? Technically they are all committed, one way or the other, to eventually join - the only exception being Denmark. It's also mandatory for any new member. In practice, Eurozone governments already set the overall economic policies for the block (since they command a large majority and have their own institutions, formal and informal), so staying out is effectively a substantial loss of power and influence. This process will likely speed up now that the largest "holdout" economy (the UK) has left. > The problem with the Euro is that countries can’t devalue their currency I know the current Euro structure is not balanced; the solution is not to abandon the project, but to compensate with improvements like shared debt, more transfers, and a reform of the ECB. Some of these are slowly slotting into place already. The model for European development must be the US - where you would never argue for, say, North Dakota to switch to some Mud-Pizza currency to escape budgetary issues.
    - Ma8ee 6y ago
      No, they aren't committed one way or another. Why do you believe so? Thinking that the Eurozone governments is one block that votes as one and therefore get larger influence is also wrong. Often there's a larger division between north and south Europe than it is between Euro and non-Euro countries. Yes, the Euro could work with much more transfers between the countries, including shared social security. But I have a hard time believing that German voters ever will vote for a government that allows their savings help paying Greek or Spanish social security. But maybe I am wrong there. The US is such a crappy example right now. It was not long ago that their president suggested that the states that couldn't handle the economic hardship of the pandemic just simply declared bankruptcy.

by Ma8ee 6y ago

toyg 6y ago

Countries that were flirting with the idea of backtracking on the Euro, like Italy and (to a lesser degree) Spain, have effectively removed the item from their political agenda for the time being. It has become radioactive in electoral terms. Even the anti-EU (and Putin-backed) parties stopped mentioning it. People are scared shitless of ending up like Greece did in those fateful weeks, without functioning banks and with a bankrupt State. It’s better to have an expensive mortgage for a solid house, than living for free in a shack. The Euro is not perfect but you cannot realistically have a strong EU in the long run without a common currency. More tweaking is absolutely necessary (and effectively happening, slowly and under the political cover of this or that crisis, by introducing more mechanisms to move more money out of Germany), but losing a common currency would be the end of the project.

Ma8ee 6y ago
You do know that a big part of EU isn’t in the Euro zone? The problem with the Euro is that countries can’t devalue their currency to become competitive after any bubble. So Greek, Spain etc. have to suffer much more than necessary. Not only Southern European countries that some argue had themselves to blame, but also countries like Finland. Germany who’s goods are cheaper on the global market is of course happy.
- toyg 6y ago
  > You do know that a big part of EU isn’t in the Euro zone? Technically they are all committed, one way or the other, to eventually join - the only exception being Denmark. It's also mandatory for any new member. In practice, Eurozone governments already set the overall economic policies for the block (since they command a large majority and have their own institutions, formal and informal), so staying out is effectively a substantial loss of power and influence. This process will likely speed up now that the largest "holdout" economy (the UK) has left. > The problem with the Euro is that countries can’t devalue their currency I know the current Euro structure is not balanced; the solution is not to abandon the project, but to compensate with improvements like shared debt, more transfers, and a reform of the ECB. Some of these are slowly slotting into place already. The model for European development must be the US - where you would never argue for, say, North Dakota to switch to some Mud-Pizza currency to escape budgetary issues.
  - Ma8ee 6y ago
    No, they aren't committed one way or another. Why do you believe so? Thinking that the Eurozone governments is one block that votes as one and therefore get larger influence is also wrong. Often there's a larger division between north and south Europe than it is between Euro and non-Euro countries. Yes, the Euro could work with much more transfers between the countries, including shared social security. But I have a hard time believing that German voters ever will vote for a government that allows their savings help paying Greek or Spanish social security. But maybe I am wrong there. The US is such a crappy example right now. It was not long ago that their president suggested that the states that couldn't handle the economic hardship of the pandemic just simply declared bankruptcy.