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Credit where credit is due: the EU gets a lot of flack for being bureaucratic, hidebound, sclerotic, whatever, but the single currency has been a success and it
by decimalenough 1y ago
Credit where credit is due: the EU gets a lot of flack for being bureaucratic, hidebound, sclerotic, whatever, but the single currency has been a success and it's still expanding, 26 years after its creation.
Also, the addition of Bulgaria means it's almost possible to travel from Spain to Greece entirely through the Eurozone, with only a thin sliver of Serbia or Macedonia in the way. (Assuming we include Montenegro and Kosovo in the Eurozone: technically they aren't, but for all practical purposes they are.)
It'll also be interesting to see who's next. Czechia is not far off but doesn't seem to be in a hurry, while Romania wants in but still seems to be a ways off. Poland and Hungary will stay outside unless there are major political changes.
- toomuchtodo 1y agohttps://en.wikipedia.org/wiki/Potential_enlargement_of_the_European_Union https://en.wikipedia.org/wiki/Potential_enlargement_of_the_E...
- decimalenough 1y agoI think you meant this: https://en.wikipedia.org/wiki/Enlargement_of_the_eurozone https://en.wikipedia.org/wiki/Enlargement_of_the_eurozone
- carabiner 1y agoThe crazy thing is that it was US pressure on Europe in the late '90s that led to adoption of the euro.
- oaiey 1y agoI am not aware of this. Can you give us a hint what that was?
- oaiey 1y agoEuro was part of the Maastricht treaty which formed the EU as we know it today in 1992. The euro part was a power move of France against a reunited Germany which back story origins in the early 80s. Obviously backfired.
- deleted 1y ago[deleted]
- flimflamm 1y agoExcept if you are a Finnish person who lives right next to Sweden (SEK) and Norway (NOK) who are not using Euro (and Russia but that's a different story).
- lawn 1y agoI live in Sweden at the border of Finland and there's very little issues with crossing the border and paying in another currency.
- jojobas 1y agoWas it any easier when Finland was using the markka?
- euroderf 1y agoBack in the late 80s, when you wanted to convert your foreign currency to markka, you had to go to a bank and fill out a form. Much friction.
- crossroadsguy 1y agoI have always felt it was a mistake allowing countries inside the EU but not the currency. But when one looks at the dates - and they are 6 years apart - it becomes clear why. I wonder how it would have turned out had Euro and EU been launched together. Would it have been "a package" or optional?
- jochem9 1y agoAll EU countries are required to join the euro. This was agreed in the 1992 Maastricht treaty when the EU was founded (and the EMU, which was the starting point of the euro). Only Denmark and the UK negotiated an opt-out at the time. Only problem is that there are no deadlines and it's up to the country to make a plan for adopting the euro.
- ingohelpinger 1y agothe same treaty says state financing through the ECB is illegal, but they do it anyway.
- epolanski 1y agoThey don't? All EU emitted debt goes towards specific projects.
- ingohelpinger 1y agowhat? the ECB is buying state bonds. maybe thats the reason the ECB is its own state, no authorities allowed to enter the building. wondering how they will audit the ECB. ahh right, they wont. :)
- riffraff 1y agoAre you sure it's in Maastricht? I think the automatic requirements met -> has to join were added in the Lisbon treaty, Maastricht just established the requirements but didn't force joining, which is why some older eu countries which would meet them haven't joined yet.
- cik 1y agoI think there's a reality for (visiting) consumers, Schengen has more value than the currency union, at least if you're not a user of cash. My experiences in non-Euro, Schengen countries is that all payment terminals offer me the choice to pay in Euro or the local currency. In many cases in tourist areas (of Czechia, Poland, and Bulgaria) I only encountered terminals that asked for payment in Euro.
- chgs 1y agoIt’s the 21st century, I pay for everything by card, currency barriers are way below Schengen and language barriers
- druskacik 1y agoIt's usually better to pay in the local currency than Euro. The currency still has to be exchanged somewhere, and the banks usually have better rates than the terminal operators.
- savolai 1y agoHm I always wondered about what this choice actually translates to, what’s the underlying logic determining how what I pay in -> where conversion gets made?
- decimalenough 1y agoIt's called DCC and you are legally required to be offered a choice. If you choose the local currency, your home bank does the exchange and the rate is basically always better. If you choose your home currency, the terminal operator does the exchange at a terrible rate and often slaps on a hefty fee for the "convenience".
- Cu3PO42 1y agoTo make things more complicated: it's not necessarily your home bank making the exchange, it can also be your card scheme (e.g. MasterCard/Visa/...). However, this is something you don't get a choice in. Your bank has an agreement with the scheme which foreign currencies are handled by whom. In any case, the rates used by the schemes are generally also pretty good.
- Roark66 1y agoPolish here, very much against adopting the euro until our standard of living and growth rate matches Germany (no at least not for next 10 years). Why? Because the disadvantages far out weight the benefits for developing countries. The biggest issue is giving up one of the biggest instrument of control over the economy to a supra-national non-democratic organisation. Surely the monetary policy will follow what is best for the biggest economies (or at best the average) while local policy is way better tweaked towards local needs. The best example of this is money supply. The money supply ideally should match the economy growth rate +X so there is tiny inflation (and definitely no deflation). This growth rate is very different in "old EU" and "new EU" countries. So what happens? In time things get more expensive much faster in countries that grow faster while incomes stay the same. This is a huge negative and this is on top of price increases happening on "day 1" due to rounding up during conversion. Historically the biggest benefit that was sold as something to outweigh this was a claim that "inflation will be low" and big inflation spikes are impossible. This came about from the short sighted view that all inflation stems from printing money and by giving up our control over it to somebody else we somehow "protect ourselves". This was proven wrong during covid when inflation was vastly different in let's say Latvia and Germany despite sharing a currency. So what is the bottom line? Is euro all bad? No, it is very useful so we have a common currency in the euro zone that is not controlled from across the ocean. This is a huge benefit, but the same benefit is achieved by having it be a second currency like it is now in Poland rather than the only currency. (you can pay in euros in almost everywhere if you prefer as well as get it from cash machines etc)
- mytailorisrich 1y agoExactly right. The euro has benefited countries like Germany a lot but not necessarily all countries.
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- petre 1y agoYou can't possibly compare Poland to Bulgaria with 1/8 Poland's GDP and 17% its population. For Bulgaria the Euro is completely fine, as the Lev has been pegged to the Deutche Mark and later the Euro for ages. It's exports are basically raw materials and grain. Most of the other stuff they produce is sold domestically. I think I've only seen Bulgarian sunflower oil, mineral water, ketchup and pasta in stores outside the country. For a state with so feeble exports and a pegged currency it really doesn't matter, only adds up currency conversion fees. They might want to attract more tourism and investments.
- mytailorisrich 1y agoSuccess, yes it has survived. But it has cost a lot to people and countries.
- yard2010 1y agoI'm not an expert but this is the best value for the cost if you ask me.
- mytailorisrich 1y agoFor most people the benefit is no currency exchange on holiday. Cost is loss of key economic levers, price increases, and potentially less competitive exports. I don't think a blanket statement like yours holds. Ot works for Germany (unsurprisingly) but some countries suffered.
- throw0101a 1y ago> Credit where credit is due: the EU gets a lot of flack for being bureaucratic, hidebound, sclerotic, whatever, but the single currency has been a success and it's still expanding, 26 years after its creation. For certain definitions of "success". The 2010s weren't such a great time: * https://en.wikipedia.org/wiki/Euro_area_crisis https://en.wikipedia.org/wiki/Euro_area_crisis The EU isn't as integrated (e.g., labour mobility) as other currency areas, and so problems in one region are harder to fix.
- dzhiurgis 1y ago> travel from Spain to Greece entirely through the Eurozone I'm not euroskeptic, but does it even matter in the age of ubiquitous digital payments? IMO SEPA is far more important development than cash itself.
- dvfjsdhgfv 1y agoPoland will not adopt it in foreseeable future because it makes no sense: the Polish currency (zloty) acts as a kind of bumper in difficult times. It's very simple: something bad happens like a crisis or a war, investors immediately sell assets deemed as risky (such as zloty), zloty goes down by x%, and automatically Polish products and services become more attractive by x%. This all happens by itself. So for the Polish economy it's a no brainer. For people themselves, they're not so keen either as they know well adopting euro was abused in other countries to increase prices (and not just round them up a bit). So basically nobody wants it, even if there are a few real benefits of joining, such as potentially lower mortgage rates which are among the highest in the EU).