6 ms·

As I Greek, having the experience of the Euro both theoretically and practically, I can say that the currency per se, it's not a problem but given the way the E

by atmosx 13y ago

As I Greek, having the experience of the Euro both theoretically and practically, I can say that the currency per se, it's not a problem but given the way the ECB acts the last 3 years, I don't understand why would anyone give-away the control of the countries currency to a board of people who act in very controversial ways..

rdtsc 13y ago
Usually in exchange for other perceived advantages? -- Less travel restriction, a more open market for products, potentially ability to look for jobs in other EU countries (but I am not 100% sure about this one).
- nolok 13y ago
  EU and Eurozone are not linked. What you talk about is joining th EU, which Latvia is already a member of, and which doesn't imply using the Euro as currency.
  - perokreco 13y ago
    That's not really true, as all new members are required to start using Euro as a currency.
justin66 13y ago
Do today's Greeks blame the bulk of their economic problems on outside forces, rather than things they've done to themselves? edit: I don't really have an agenda with this question - I'm not a European and I'm not invested in any way, really - and I'm a little surprised at how quickly it got voted up. Please just treat it as a sincere question.
- atmosx 13y ago
  My first reaction was irony to a very well-known propaganda that is sold throughout Central-Northern Europe to justify totally irrational policies which drove an entire nation to it's knees. But before going into that, I'd like to ask you to be more specific: To which things are you referring to?
  - bayesianhorse 13y ago
    So prior governments didn't falsify financial records like they say themselves? Greece did not take on more debt than even the faked statistics supported? You are saying, contrary to propaganda, the greek government sector and the state-run enterprises were in a splendid and efficient state a couple of years ago? Furthermore, contrary to propaganda, their is no problem with the completely ineffective and unefficient tax collection system? I didn't know that, I am very sorry...
    - nhaehnle 13y ago
      All that is of little relevance, because the crisis in Greece is not a crisis of inefficient use of resources. It is a crisis of disuse of resources. Just look at the unemployment numbers to see what I mean. Had Greece not been part of the Eurozone, their currency would have lost value during the crisis. This would have driven a recovery as Greeks would have turned to producing more things locally, both for domestic use and for exports.
      - StavrosK 13y ago
        I know very little about economics and even less about politics, but it seems to me that a currency losing power would be a much "softer" landing for everyone involved. Right now, since there's no currency to devalue, we must cut salaries and lower all the prices through market effects. This has a very negative psychological effect to people who see their salaries cut to a third of what they used to be (rather than seeing imported goods rise to three times their former prices), and doesn't allow exports to become instantly more competitive by virtue of being cheaper right away. I agree with you that, if Greece weren't part of the Eurozone, things would at least have been smoother.
        bayesianhorse 13y ago
        Talk to Argentina about "softer landing" by hyperinflation. Even with faked statistics they are still worse off than Greece and while their situation certainly could be worse, it could also be a lot better. But as long as you say you don't understand economics or politics, the mistake of oversimplifying monetary economics is understable...
- varjag 13y ago
  Many of them perhaps tend to, but it's irrelevant to his point. Having own currency allows for nation-wide bloodletting through inflation, a classic option of dealing with economic collapse. Having succumbed to Deutschmark er.. Euro, they lost the easy option.
  - bayesianhorse 13y ago
    One problem with defending the Euro is that some of the best anti-arguments are also the most easy to understand. But ask the Japanese how easy it is to actually inflate a problem away... On the other hand "massive inflation" isn't exactly the easy option. It's just very easy to understand if you are prepared to oversimplify macroeconomics.
- cynicalkane 13y ago
  In economics, everyone is always looking to blame everyone else. But the fact remains that, once the initial recessionary shock is over, whether or not an economy recovers depends almost entirely on whether the central bank follows mainstream economic principles, or the pseudo-principles that are popular among politicians and pundits. Israel and Australia are known for executing the former. The Fed split the difference. The ECB has taken overwhelmingly the latter course, and Europe is paying for its love of convenient, self-flattering economic narratives. The policies and the policy effects of central banks are measurable in elementary ways. This is not an opinion. It's very important to realize the role of the ECB and the Euro in this recession, because the current popular alternative--mindless national hatred--has not turned out very well for Europe, historically speaking.
  - nhaehnle 13y ago
    I largely agree with what you write, but I'm somewhat skeptical about blaming the ECB. The thing is, it seems that monetary policy is actually pretty powerless when your goal is to increase economic activity (rather than slowing it down). Point in fact, what could the ECB have done better? They could have reduced interest rates faster and more aggressively, but would that really have changed so much? What else could they have done? I think the blame lies squarely on fiscal policy, namely the European obsession with austerity. Mainstream (that is, non-pundit) macro-economics correctly predicted that austerity would hurt, yet European politicians still follow that prescription. In part, the structure of the Eurozone is at fault. If the automatic stabilizers like unemployment insurance and other social programs had been a part of a supranational budget, the crisis would never have become as deep.
    - jaggederest 13y ago
      The problem is their messaging. If they stood up and said to politicians "You must spend money to pull your economies out of the slump", it would have been much better. Also, even if it wouldn't have been that effective, more aggressive interest rate moves would have done something, and that something on the margin means less suffering in the world.
  - 13y ago
- antman 13y ago
  The Greeks believe what their media says. So it depends on what media they are following. In general although politically active, knowledge about international politics is not wide spread so everybody blames mostly the Greeks. Half of them blame the people, the other half blames the government. I disagree and I believe that Greece for the most part wasn't master of its own fate. Disclaimer: I am Greek
whistlerbrk 13y ago
The currency is never the problem. Not having goods/services which are on par with other member states prevents internal trade. Not being able to devalue your currency prevents external trade. That creates debt which Germany and France buys and whoopdy doo, poverty and extremism. The expansion of the euro into countries which aren't realistic trading partners is the problem but Germany and France love it, it means more long term wealth for them.
- atmosx 13y ago
  Which is what is happening to Greece: It's cheaper to import fish to the epic Island of Ithaca, than to actually fish it!!!
  - bayesianhorse 13y ago
    Welcome to technological progress. Of course it's cheaper to do bulk fishing than small scale fishing with no support infrastructure....
    - atmosx 13y ago
      Yeah, but the taste sucks.
  - aigarius 13y ago
    You are confounding several things. It is NEVER cheaper to import than to fish, because importing costs money and fishing does not. What you mean is that the opportunity cost of fishing is higher than its market value, meaning that there is another job that you can do for 8 hours that would make you more money than the fish that you could have caught in 8 hours would be worth. For that to be true, you need that job to exist that you can do, which is not always true in high unemployment situations. And when that IS true, then it is a good thing, because that means that the economy as a whole is working more efficiently - you are not spending your time doing useless things, you do something more productive instead.
- nhaehnle 13y ago
  > The currency is never the problem ... Not being able to devalue your currency prevents external trade. So it is the currency that is the problem :-)
nawitus 13y ago
A single currency is the best feature of the Eurozone. Politicians can't pull devaluation stunts anymore, and dealing with a single currency makes trade in Europe a lot more efficient. The European Parliament and the Commission is the biggest problem with EU in my opinion.
- ye 13y ago
  > Politicians can't pull devaluation stunts anymore LOL. They just keep printing. http://www.ecb.europa.eu/stats/euro/circulation/html/index.en.html http://www.ecb.europa.eu/stats/euro/circulation/html/index.e... 2008 783B 2009 827B (+5.6%) 2010 861B (+4.1%) How much % do your savings generate again? :) I'm trying to find the figures of the amounts they printed after 2011, it's in hundreds of billions. http://www.marketoracle.co.uk/Article32265.html http://www.marketoracle.co.uk/Article32265.html http://www.marketoracle.co.uk/Article30666.html http://www.marketoracle.co.uk/Article30666.html
  - andy_boot 13y ago
    I think you've missed his point. If the ECB prints more money but most of your trade is with other Euro countries (which it will be) then you can't really use the devaluation trick.
    - SilasX 13y ago
      Sure you can: mark down the nominal price of the goods you export. Not willing to make them competitive? Good luck.
      - afterburner 13y ago
        How? By lowering wages? That's the tricky part. That's why devaluation is so much easier.
        jpatokal 13y ago
        To implement, yes, but the impact is the same. Those devalued wages are now worth less when it comes to buying imports, and since (to a first approximation) everything in this globalized world of ours is imported, even local goods and services have to hike up prices in response.
Zigurd 13y ago
Latvia was put through an austerity program despite having their own currency. Hard to say if that was the right thing. Now that Latvia has a 5%+ growth rate, success has the proverbial 1000 fathers.
dualogy 13y ago
"Basically, this is the direction the Euro group is taking us. This concept was born with little regard for the economic health of Europe. In the future, any countries money or economy can totally fail and the world currency operation will continue. What is being built is a new currency system." ~ "FOA", ca. late 2000 / early 2001 From the outset, the currency was designed to be used fairly similar to any other "shared unit in common use across borders", such as meters or degrees-celsius. Consequently, local/national government continues to decide on their country's fiscal and economic policy (and deals with their employment, debt, taxation etc. issues), whereas the currency unit is to remain merely a non-political means-of-exchange for trade settlement (as a result, identical products have widely differing prices across the euro zone, this is anticipated and accepted by the design) that is to be managed by ECB (which has NO other mandate unlike the Fed that has to worry about employment and economic recovery etc. etc.) at a steady "2%-or-below" inflation rate for a certain level of price stability across euro-zone.

by atmosx 13y ago

rdtsc 13y ago

Usually in exchange for other perceived advantages? -- Less travel restriction, a more open market for products, potentially ability to look for jobs in other EU countries (but I am not 100% sure about this one).

nolok 13y ago
EU and Eurozone are not linked. What you talk about is joining th EU, which Latvia is already a member of, and which doesn't imply using the Euro as currency.
- perokreco 13y ago
  That's not really true, as all new members are required to start using Euro as a currency.

justin66 13y ago

Do today's Greeks blame the bulk of their economic problems on outside forces, rather than things they've done to themselves? edit: I don't really have an agenda with this question - I'm not a European and I'm not invested in any way, really - and I'm a little surprised at how quickly it got voted up. Please just treat it as a sincere question.

atmosx 13y ago
My first reaction was irony to a very well-known propaganda that is sold throughout Central-Northern Europe to justify totally irrational policies which drove an entire nation to it's knees. But before going into that, I'd like to ask you to be more specific: To which things are you referring to?
- bayesianhorse 13y ago
  So prior governments didn't falsify financial records like they say themselves? Greece did not take on more debt than even the faked statistics supported? You are saying, contrary to propaganda, the greek government sector and the state-run enterprises were in a splendid and efficient state a couple of years ago? Furthermore, contrary to propaganda, their is no problem with the completely ineffective and unefficient tax collection system? I didn't know that, I am very sorry...
  - nhaehnle 13y ago
    All that is of little relevance, because the crisis in Greece is not a crisis of inefficient use of resources. It is a crisis of disuse of resources. Just look at the unemployment numbers to see what I mean. Had Greece not been part of the Eurozone, their currency would have lost value during the crisis. This would have driven a recovery as Greeks would have turned to producing more things locally, both for domestic use and for exports.
    - StavrosK 13y ago
      I know very little about economics and even less about politics, but it seems to me that a currency losing power would be a much "softer" landing for everyone involved. Right now, since there's no currency to devalue, we must cut salaries and lower all the prices through market effects. This has a very negative psychological effect to people who see their salaries cut to a third of what they used to be (rather than seeing imported goods rise to three times their former prices), and doesn't allow exports to become instantly more competitive by virtue of being cheaper right away. I agree with you that, if Greece weren't part of the Eurozone, things would at least have been smoother.
      - bayesianhorse 13y ago
        Talk to Argentina about "softer landing" by hyperinflation. Even with faked statistics they are still worse off than Greece and while their situation certainly could be worse, it could also be a lot better. But as long as you say you don't understand economics or politics, the mistake of oversimplifying monetary economics is understable...
varjag 13y ago
Many of them perhaps tend to, but it's irrelevant to his point. Having own currency allows for nation-wide bloodletting through inflation, a classic option of dealing with economic collapse. Having succumbed to Deutschmark er.. Euro, they lost the easy option.
- bayesianhorse 13y ago
  One problem with defending the Euro is that some of the best anti-arguments are also the most easy to understand. But ask the Japanese how easy it is to actually inflate a problem away... On the other hand "massive inflation" isn't exactly the easy option. It's just very easy to understand if you are prepared to oversimplify macroeconomics.
cynicalkane 13y ago
In economics, everyone is always looking to blame everyone else. But the fact remains that, once the initial recessionary shock is over, whether or not an economy recovers depends almost entirely on whether the central bank follows mainstream economic principles, or the pseudo-principles that are popular among politicians and pundits. Israel and Australia are known for executing the former. The Fed split the difference. The ECB has taken overwhelmingly the latter course, and Europe is paying for its love of convenient, self-flattering economic narratives. The policies and the policy effects of central banks are measurable in elementary ways. This is not an opinion. It's very important to realize the role of the ECB and the Euro in this recession, because the current popular alternative--mindless national hatred--has not turned out very well for Europe, historically speaking.
- nhaehnle 13y ago
  I largely agree with what you write, but I'm somewhat skeptical about blaming the ECB. The thing is, it seems that monetary policy is actually pretty powerless when your goal is to increase economic activity (rather than slowing it down). Point in fact, what could the ECB have done better? They could have reduced interest rates faster and more aggressively, but would that really have changed so much? What else could they have done? I think the blame lies squarely on fiscal policy, namely the European obsession with austerity. Mainstream (that is, non-pundit) macro-economics correctly predicted that austerity would hurt, yet European politicians still follow that prescription. In part, the structure of the Eurozone is at fault. If the automatic stabilizers like unemployment insurance and other social programs had been a part of a supranational budget, the crisis would never have become as deep.
  - jaggederest 13y ago
    The problem is their messaging. If they stood up and said to politicians "You must spend money to pull your economies out of the slump", it would have been much better. Also, even if it wouldn't have been that effective, more aggressive interest rate moves would have done something, and that something on the margin means less suffering in the world.
- 13y ago
antman 13y ago
The Greeks believe what their media says. So it depends on what media they are following. In general although politically active, knowledge about international politics is not wide spread so everybody blames mostly the Greeks. Half of them blame the people, the other half blames the government. I disagree and I believe that Greece for the most part wasn't master of its own fate. Disclaimer: I am Greek

whistlerbrk 13y ago

The currency is never the problem. Not having goods/services which are on par with other member states prevents internal trade. Not being able to devalue your currency prevents external trade. That creates debt which Germany and France buys and whoopdy doo, poverty and extremism. The expansion of the euro into countries which aren't realistic trading partners is the problem but Germany and France love it, it means more long term wealth for them.

atmosx 13y ago
Which is what is happening to Greece: It's cheaper to import fish to the epic Island of Ithaca, than to actually fish it!!!
- bayesianhorse 13y ago
  Welcome to technological progress. Of course it's cheaper to do bulk fishing than small scale fishing with no support infrastructure....
  - atmosx 13y ago
    Yeah, but the taste sucks.
- aigarius 13y ago
  You are confounding several things. It is NEVER cheaper to import than to fish, because importing costs money and fishing does not. What you mean is that the opportunity cost of fishing is higher than its market value, meaning that there is another job that you can do for 8 hours that would make you more money than the fish that you could have caught in 8 hours would be worth. For that to be true, you need that job to exist that you can do, which is not always true in high unemployment situations. And when that IS true, then it is a good thing, because that means that the economy as a whole is working more efficiently - you are not spending your time doing useless things, you do something more productive instead.
nhaehnle 13y ago
> The currency is never the problem ... Not being able to devalue your currency prevents external trade. So it is the currency that is the problem :-)

nawitus 13y ago

A single currency is the best feature of the Eurozone. Politicians can't pull devaluation stunts anymore, and dealing with a single currency makes trade in Europe a lot more efficient. The European Parliament and the Commission is the biggest problem with EU in my opinion.

ye 13y ago
> Politicians can't pull devaluation stunts anymore LOL. They just keep printing. http://www.ecb.europa.eu/stats/euro/circulation/html/index.en.html http://www.ecb.europa.eu/stats/euro/circulation/html/index.e... 2008 783B 2009 827B (+5.6%) 2010 861B (+4.1%) How much % do your savings generate again? :) I'm trying to find the figures of the amounts they printed after 2011, it's in hundreds of billions. http://www.marketoracle.co.uk/Article32265.html http://www.marketoracle.co.uk/Article32265.html http://www.marketoracle.co.uk/Article30666.html http://www.marketoracle.co.uk/Article30666.html
- andy_boot 13y ago
  I think you've missed his point. If the ECB prints more money but most of your trade is with other Euro countries (which it will be) then you can't really use the devaluation trick.
  - SilasX 13y ago
    Sure you can: mark down the nominal price of the goods you export. Not willing to make them competitive? Good luck.
    - afterburner 13y ago
      How? By lowering wages? That's the tricky part. That's why devaluation is so much easier.
      - jpatokal 13y ago
        To implement, yes, but the impact is the same. Those devalued wages are now worth less when it comes to buying imports, and since (to a first approximation) everything in this globalized world of ours is imported, even local goods and services have to hike up prices in response.

Zigurd 13y ago

Latvia was put through an austerity program despite having their own currency. Hard to say if that was the right thing. Now that Latvia has a 5%+ growth rate, success has the proverbial 1000 fathers.

dualogy 13y ago

"Basically, this is the direction the Euro group is taking us. This concept was born with little regard for the economic health of Europe. In the future, any countries money or economy can totally fail and the world currency operation will continue. What is being built is a new currency system." ~ "FOA", ca. late 2000 / early 2001 From the outset, the currency was designed to be used fairly similar to any other "shared unit in common use across borders", such as meters or degrees-celsius. Consequently, local/national government continues to decide on their country's fiscal and economic policy (and deals with their employment, debt, taxation etc. issues), whereas the currency unit is to remain merely a non-political means-of-exchange for trade settlement (as a result, identical products have widely differing prices across the euro zone, this is anticipated and accepted by the design) that is to be managed by ECB (which has NO other mandate unlike the Fed that has to worry about employment and economic recovery etc. etc.) at a steady "2%-or-below" inflation rate for a certain level of price stability across euro-zone.