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> Why do countries join the Euro when neither Sweden nor Great Britain do and (almost) all economists say that it doesn't work if you have a weak economy? Poli
by Mikeb85 4y ago
> Why do countries join the Euro when neither Sweden nor Great Britain do and (almost) all economists say that it doesn't work if you have a weak economy?
Politics. If you have a weak economy it's perceived by the population that switching to a strong currency will instantly increase their purchasing power.
- nickdothutton 4y agoIf you have a weak economy and weak currency (which you have repeatedly printed in order to pay off debt, like Greece, Italy, etc) then your borrowing cost eventually becomes high as banks get wise to your behaviour. If you switch to the Euro then your borrowing cost magically becomes low (since you cant unilaterally just print money). If your economy still doesnt reform then eventually you cant pay your euro debt… and you have the Greek situation. Can’t print, no-longer have a low-cost, low wage, low tax, low regulation economy (since you conformed to the EU/Euro area regulations). The trick for politicians is getting out of there before the public realises this.