7 ms·

The more I read and hear about the debt problems of the Eurozone, I wonder how France and Germany ever got duped into joining in the first place.

jvehent 15y ago
They didn't join anything. They created it to extend their markets with a common currency. The others joined in.
- kleiba 15y ago
  Well, it wasn't Germany and France alone who created the Euro zone...
  - nakkiel 15y ago
    It was. France and Germany have historically been the driving political forces behind the European bodies. This is why now there is a leadership crisis in Europe: those two countries are still filling a leadership gap and thus criticized by other countries for taking decisions.
    - ticks 15y ago
      It has been quite the eye opener to watch France and Germany drive the proceedings. I was quite supportive of the EU and the Euro, but now I'm glad we (the UK) stayed out of the Euro. It would appear that this crisis is being used to move power away from the "weaker" countries.
      - nakkiel 15y ago
        As you are from the UK, I will warn you. Every news you read from a British source should be cross-checked with another source (just so you have another take on it). Don't get me wrong, I have no animosity toward the UK or anything like this. I also find BBC's reporting to be of very high quality and I watch it daily. However there is total unfairness regarding the Europe thing at the BBC. Basically I'd sum their coverage as "See what's going on? We told you so!". That said, I disagree with you regarding the "stay out of the Euro". I now think that it is sad that the UK didn't get more involved in the Europe. The UK is probably the only country that could have weighed enough to get France and Germany to actually implement another management. Europe is victim of the "small team" problem. It's a small team so it's ok if the two biggest guys manage it hand in hand because everybody's just ok with that and nobody can really challenge them. Problem arise with tougher times like we experience. You guys should have really pushed us :) My opinion: we needed you to kick us and tell us it's not ok to just take the lead; it needs to be formalized AND democratic.
        inovica 15y ago
        A very well written comment. This is a prime example of how we should be communicating on HN. It gets the point across without being confrontational
        maximusprime 15y ago
        We are so culturally different to the rest of Europe, I'm very very glad we stayed out. Us having any sort of leading voice in Europe would have been ridiculous. Hopefully we withdraw fully from the EU, and the Euro collapses. Just watch the Eurovision song contest for an idea of how ridiculously different Europe is from the UK, and how widespread the whole "we like them but not them" thing is.
        epscylonb 15y ago
        I am not sure I would like UK "culture" to be judged by our eurovision entries and suspect most europeans would feel the same. The UK does have a problem though, in many ways we are much more like america economically than the rest of europe, but european is trade is big part of our economy.
        maximusprime 15y ago
        Well, we try to enter songs/artists we think will appeal to Europe's tastes. And mainly fail, because we are so different from them. It's fairly obvious that our countries usual musical output is pretty decent, and if we entered any of that into the contest, we'd win (If it was actually anything to do with the song). I love the Eurovision song contest though, because it highlights how ridiculous the idea of integrating Europe is. You get countries who always vote for each other even when the song is rubbish, and you get no one voting for us, even when we have a half decent song. The Eurovision song contest is the best advert for a 'euro-skeptic'.
        zeugma 15y ago
        I won't take the eurovision to measure europe's culture. First it is not "European" anymore, neither politically (Swizerland) nor geographically (Algeria and Israel for example are participating). Secondly, France and Germany do not succeed very well and they participation is rather ridiculous.
      - barrkel 15y ago
        Bear in mind that countries like Ireland are still strongly in favour of the Euro, even after what has happened; think about the reasons that could be.
  - kleiba 15y ago
    Oh, wow, I got quite a bit of downvotes for simply stating a fact: the Eurozone has been around since 1999, and 11 states of the EU were founding members. Germany and France were among them, sure enough, but they weren's the only ones.
    - Confusion 15y ago
      Don't be naive. Without either of them actively promoting and wanting it, there wouldn't have been a Eurozone. Any other country could have dropped out, but neither of these.
      - kleiba 15y ago
        Not sure were you get any naivite from my post. It's not like Germany and France decided to create a new currency and a few bystanders hopped on board. It was a very complicated and long process, and yes, the German reunification was at the heart of it, 10 years before the Eurozone actually came into existence. Even the US and Russia played key roles in the process. I do get where you're coming from though, since Germany and France have been the motors of the EU's economy. Fair enough. But the original claim from the ancestor was that Germany and France created the Eurozone and others joined later. That's simply factually untrue. Anyway...
    - nakkiel 15y ago
      You are technically right but the driving forces were France and Germany. Those two countries have a long history of wars and one of the goal of the European Coal and Steel Community, which started the whole thing, was to bring peace in the long term by ensuring close ties between the two countries. My grandfather who fought the Nazi in the French "resistance" once told me that whatever I thought politically about Europe, I should back it of all my weight because then I wouldn't have to see history repeat itself.
  - rb2k_ 15y ago
    Here is a nice NPR podcast about the German-French relationship and the creation of the Eurozone: http://www.npr.org/blogs/money/2011/10/21/141512746/france-and-germany-a-love-story http://www.npr.org/blogs/money/2011/10/21/141512746/france-a... Apparently Europe created the Eurozone because they were afraid of the newly united Germany
veyron 15y ago
The euro benefited Germany immensely because weaker nations basically hindered the appreciation of the common currency.
- yummyfajitas 15y ago
  Why is that good for Germany?
  - ticks 15y ago
    Lower value boosts manufacturing and export. Germany's unemployment levels are astoundingly low at the moment. http://www.tradingeconomics.com/germany/unemployment-rate http://www.tradingeconomics.com/germany/unemployment-rate
    - nakkiel 15y ago
      Germany is actually in a difficult position. Most of Germany's current growth is driven by exports to industrializing countries. As we know it, those country's growth is largely tied to Europe (the biggest consumer market in the world). Therefore, if Europe was to collapse, it would affect industrializing nations and Germany would be hit both through Europe and through industrializing countries.
      - ticks 15y ago
        I agree, it's a perilous situation.
    - yummyfajitas 15y ago
      A low value currency is good for Germany because then Germans get to work hard and send valuable goods to other people? Wouldn't it be better for Germans to work less and have other people send valuable goods to them?
      - barrkel 15y ago
        It's relative currency changes that hurt or help the economy, because that's what forces the rest of the import / export economy to adjust. A currency that increased in value substantially would have reduced global demand for German goods, which would have created unemployment in its export sector, reducing German wealth production until the German economy adjusted. If you asked these unemployed German people if they preferred this new "work less" situation, I expect they wouldn't be as happy with it as you seem to suggest.
barrkel 15y ago
Germany wanted to unify; France demanded they give up the DM and enter into a currency union in return. They created it together.
- rb2k_ 15y ago
  Basically this argument can be found in this nice NPR podcast: http://www.npr.org/blogs/money/2011/10/21/141512746/france-and-germany-a-love-story http://www.npr.org/blogs/money/2011/10/21/141512746/france-a...
cturner 15y ago
I see this motive for Germany: the Euro has been a back-door mechanism for buffeting weak parts of the economy during a stressful period (reunification, global plunge in manufacturing margins). The effect is similar to what China gets by constantly buying treasuries. Beneficiaries have been the former east and farmers. Italians can buy German milk that would otherwise be expensive. Here's some speculative fiction on Germany without the Euro: the DEM is a very strong currency. Bankers drive fast German-branded but Eastern-europe-manufactured cars along a financial-sector corridor that stretches between Zurich and a much larger Frankfurt am Main and which has sucked the momentum out of the city of London. Munich has some strength for being in the middle of this but has been hit hard by the loss of manufacturing jobs. Most regions are less fortunate still. Production for export is impractical. There's significant social unease, particularly against hard-working migrants from other European areas "taking german jobs". There are many poor regions that haven't crossed over into services mindset and vast regions of poverty. Wealthy western states resent seeing all their taxes disappear to weaker regions. There's general dissatisfaction with the reunification project. In short - a harsher take on the UK. (I've no ideas about France.)
barry-cotter 15y ago
The story I heard was that Francois Mitterand more or less extorted the commitment to the single currency out of Helmut Kohl as a quid quo pro for supporting German unification. The reasoning is approximately as follows: It was obvious by 1989 that monetary policy for European countries was de facto set in Frankfurt by the Bundesbank. The further you moved from the D-Mark interest rate the less D-Marks your currency would buy and reality would kick in inflating your currency. Mitterand had personal experience of this dynamic having been elected on a Socialist platform and ramped up spending without increasing taxes as much as would have been necessary to pay for the spending. So he wanted a voice in European monetary policy, so a European currency with a central bank modelled on the Bundesbank. So France wasn't duped at all. One proposed end game I've heard is the solid Euro zone currencies (DE,AT,NL,LX,FI, maybe FR, eventually PL and Estonia, maybe others) seceding to a new currency which would end with the ECB managing two currencies. The Euro, not as bad an idea as it looks in hindsight, though the scrutiny for countries that wanted in should have been much higher.

jvehent 15y ago

They didn't join anything. They created it to extend their markets with a common currency. The others joined in.

kleiba 15y ago
Well, it wasn't Germany and France alone who created the Euro zone...
- nakkiel 15y ago
  It was. France and Germany have historically been the driving political forces behind the European bodies. This is why now there is a leadership crisis in Europe: those two countries are still filling a leadership gap and thus criticized by other countries for taking decisions.
  - ticks 15y ago
    It has been quite the eye opener to watch France and Germany drive the proceedings. I was quite supportive of the EU and the Euro, but now I'm glad we (the UK) stayed out of the Euro. It would appear that this crisis is being used to move power away from the "weaker" countries.
    - nakkiel 15y ago
      As you are from the UK, I will warn you. Every news you read from a British source should be cross-checked with another source (just so you have another take on it). Don't get me wrong, I have no animosity toward the UK or anything like this. I also find BBC's reporting to be of very high quality and I watch it daily. However there is total unfairness regarding the Europe thing at the BBC. Basically I'd sum their coverage as "See what's going on? We told you so!". That said, I disagree with you regarding the "stay out of the Euro". I now think that it is sad that the UK didn't get more involved in the Europe. The UK is probably the only country that could have weighed enough to get France and Germany to actually implement another management. Europe is victim of the "small team" problem. It's a small team so it's ok if the two biggest guys manage it hand in hand because everybody's just ok with that and nobody can really challenge them. Problem arise with tougher times like we experience. You guys should have really pushed us :) My opinion: we needed you to kick us and tell us it's not ok to just take the lead; it needs to be formalized AND democratic.
      - inovica 15y ago
        A very well written comment. This is a prime example of how we should be communicating on HN. It gets the point across without being confrontational
      - maximusprime 15y ago
        We are so culturally different to the rest of Europe, I'm very very glad we stayed out. Us having any sort of leading voice in Europe would have been ridiculous. Hopefully we withdraw fully from the EU, and the Euro collapses. Just watch the Eurovision song contest for an idea of how ridiculously different Europe is from the UK, and how widespread the whole "we like them but not them" thing is.
        epscylonb 15y ago
        I am not sure I would like UK "culture" to be judged by our eurovision entries and suspect most europeans would feel the same. The UK does have a problem though, in many ways we are much more like america economically than the rest of europe, but european is trade is big part of our economy.
        maximusprime 15y ago
        Well, we try to enter songs/artists we think will appeal to Europe's tastes. And mainly fail, because we are so different from them. It's fairly obvious that our countries usual musical output is pretty decent, and if we entered any of that into the contest, we'd win (If it was actually anything to do with the song). I love the Eurovision song contest though, because it highlights how ridiculous the idea of integrating Europe is. You get countries who always vote for each other even when the song is rubbish, and you get no one voting for us, even when we have a half decent song. The Eurovision song contest is the best advert for a 'euro-skeptic'.
        zeugma 15y ago
        I won't take the eurovision to measure europe's culture. First it is not "European" anymore, neither politically (Swizerland) nor geographically (Algeria and Israel for example are participating). Secondly, France and Germany do not succeed very well and they participation is rather ridiculous.
    - barrkel 15y ago
      Bear in mind that countries like Ireland are still strongly in favour of the Euro, even after what has happened; think about the reasons that could be.
- kleiba 15y ago
  Oh, wow, I got quite a bit of downvotes for simply stating a fact: the Eurozone has been around since 1999, and 11 states of the EU were founding members. Germany and France were among them, sure enough, but they weren's the only ones.
  - Confusion 15y ago
    Don't be naive. Without either of them actively promoting and wanting it, there wouldn't have been a Eurozone. Any other country could have dropped out, but neither of these.
    - kleiba 15y ago
      Not sure were you get any naivite from my post. It's not like Germany and France decided to create a new currency and a few bystanders hopped on board. It was a very complicated and long process, and yes, the German reunification was at the heart of it, 10 years before the Eurozone actually came into existence. Even the US and Russia played key roles in the process. I do get where you're coming from though, since Germany and France have been the motors of the EU's economy. Fair enough. But the original claim from the ancestor was that Germany and France created the Eurozone and others joined later. That's simply factually untrue. Anyway...
  - nakkiel 15y ago
    You are technically right but the driving forces were France and Germany. Those two countries have a long history of wars and one of the goal of the European Coal and Steel Community, which started the whole thing, was to bring peace in the long term by ensuring close ties between the two countries. My grandfather who fought the Nazi in the French "resistance" once told me that whatever I thought politically about Europe, I should back it of all my weight because then I wouldn't have to see history repeat itself.
- rb2k_ 15y ago
  Here is a nice NPR podcast about the German-French relationship and the creation of the Eurozone: http://www.npr.org/blogs/money/2011/10/21/141512746/france-and-germany-a-love-story http://www.npr.org/blogs/money/2011/10/21/141512746/france-a... Apparently Europe created the Eurozone because they were afraid of the newly united Germany

veyron 15y ago

The euro benefited Germany immensely because weaker nations basically hindered the appreciation of the common currency.

yummyfajitas 15y ago
Why is that good for Germany?
- ticks 15y ago
  Lower value boosts manufacturing and export. Germany's unemployment levels are astoundingly low at the moment. http://www.tradingeconomics.com/germany/unemployment-rate http://www.tradingeconomics.com/germany/unemployment-rate
  - nakkiel 15y ago
    Germany is actually in a difficult position. Most of Germany's current growth is driven by exports to industrializing countries. As we know it, those country's growth is largely tied to Europe (the biggest consumer market in the world). Therefore, if Europe was to collapse, it would affect industrializing nations and Germany would be hit both through Europe and through industrializing countries.
    - ticks 15y ago
      I agree, it's a perilous situation.
  - yummyfajitas 15y ago
    A low value currency is good for Germany because then Germans get to work hard and send valuable goods to other people? Wouldn't it be better for Germans to work less and have other people send valuable goods to them?
    - barrkel 15y ago
      It's relative currency changes that hurt or help the economy, because that's what forces the rest of the import / export economy to adjust. A currency that increased in value substantially would have reduced global demand for German goods, which would have created unemployment in its export sector, reducing German wealth production until the German economy adjusted. If you asked these unemployed German people if they preferred this new "work less" situation, I expect they wouldn't be as happy with it as you seem to suggest.

barrkel 15y ago

Germany wanted to unify; France demanded they give up the DM and enter into a currency union in return. They created it together.

rb2k_ 15y ago
Basically this argument can be found in this nice NPR podcast: http://www.npr.org/blogs/money/2011/10/21/141512746/france-and-germany-a-love-story http://www.npr.org/blogs/money/2011/10/21/141512746/france-a...

cturner 15y ago

I see this motive for Germany: the Euro has been a back-door mechanism for buffeting weak parts of the economy during a stressful period (reunification, global plunge in manufacturing margins). The effect is similar to what China gets by constantly buying treasuries. Beneficiaries have been the former east and farmers. Italians can buy German milk that would otherwise be expensive. Here's some speculative fiction on Germany without the Euro: the DEM is a very strong currency. Bankers drive fast German-branded but Eastern-europe-manufactured cars along a financial-sector corridor that stretches between Zurich and a much larger Frankfurt am Main and which has sucked the momentum out of the city of London. Munich has some strength for being in the middle of this but has been hit hard by the loss of manufacturing jobs. Most regions are less fortunate still. Production for export is impractical. There's significant social unease, particularly against hard-working migrants from other European areas "taking german jobs". There are many poor regions that haven't crossed over into services mindset and vast regions of poverty. Wealthy western states resent seeing all their taxes disappear to weaker regions. There's general dissatisfaction with the reunification project. In short - a harsher take on the UK. (I've no ideas about France.)

barry-cotter 15y ago

The story I heard was that Francois Mitterand more or less extorted the commitment to the single currency out of Helmut Kohl as a quid quo pro for supporting German unification. The reasoning is approximately as follows: It was obvious by 1989 that monetary policy for European countries was de facto set in Frankfurt by the Bundesbank. The further you moved from the D-Mark interest rate the less D-Marks your currency would buy and reality would kick in inflating your currency. Mitterand had personal experience of this dynamic having been elected on a Socialist platform and ramped up spending without increasing taxes as much as would have been necessary to pay for the spending. So he wanted a voice in European monetary policy, so a European currency with a central bank modelled on the Bundesbank. So France wasn't duped at all. One proposed end game I've heard is the solid Euro zone currencies (DE,AT,NL,LX,FI, maybe FR, eventually PL and Estonia, maybe others) seceding to a new currency which would end with the ECB managing two currencies. The Euro, not as bad an idea as it looks in hindsight, though the scrutiny for countries that wanted in should have been much higher.