4 ms·

I agree. I also find it pretty insincere to brush off economic problems with the half-sentence "but those should have been manageable". Aren't there lot of nat

I agree. I also find it pretty insincere to brush off economic problems with the half-sentence "but those should have been manageable". Aren't there lot of nations with economic problems that aren't managable (in the sense of averting a shrinking economy in the course of a few years), even though they have their own curreny? Finally, on the small scale, traveling is so much easier if you don't have to worry about currrency. No need to get cash in the foreign currency in advance. No need to worry about exchange rates. No need to worry about your bank adding crazy exchange fees. You can compare price to what you're used to without having to do any mental (or awkward mobile phone) arithmetics. Border regions and travelers profit imensly from the Euro. This is pretty obvious, but econmics pieces on the Euro routinely forget to mention it.

pjmlp 11y ago
On the other hand, 1 € in Portugal isn't the same value as 1 € in Germany, given the salary differences. Yet many brands, e.g. H&M, tend to have the same prices for some of their goods. Which leads to the disparity that we are now suffering from.
- oblio 11y ago
  Your argument is mostly invalid as H&M, for example, has tags in multiple currencies. And as a non-Euro Romanian I can tell you that the conversion rate is not favorable to the buyer.
  - pjmlp 11y ago
    My argument is based on the fact that I have seen such tags with the same price for Germany and Portugal. It true that they don't do it for most of their products, but that doesn't change the fact I have seen such price tags.
    - oblio 11y ago
      My point is that for H&M and similar networks the prices are constant across countries, based on their pre-set FX rate, which is not in the favor of the buyer. The initial argument would only be valid if prices in different currencies would be smaller in the poorer countries, which doesn't happen anyway, regardless of currency.
      - pjmlp 11y ago
        > The initial argument would only be valid if prices in different currencies would be smaller in the poorer countries, which doesn't happen anyway, regardless of currency. But it does happen, on average H&M products are cheaper in Portugal than on Germany, except for those few cases I happened to stumble on.
        issaria 11y ago
        I think oblio means that even if Portugal is not in the Euro zone with its own currency, it's unlikely to get a better price than now.
        oblio 11y ago
        Exactly. Unfortunately I am not that good at getting my point across :(
- crdb 11y ago
  People are globalized, and with the internet, routinely arbitrage price differences which is leading to a more global MSRP. For example, a study of over 1 million bank accounts in Australia (i.e. 1 in 22 Australians) in 2011 by the Commonwealth Bank of Australia showed that over 75% of e-commerce by revenue was cross-border (i.e. Australians were importing). Thanks to the rapid appreciation of the AUD until 2012, brands benefitted from as much as a 50% boost in MSRP locally, and Australians ended up importing not just clothes and cosmetics but things like lawn mowers. This higher MSRP was so profitable to the brands that they were very strict on enforcing it. I won't mention any names but an online retail shop was opened by a large European investment group in the hope of using gray import from Hong Kong to cut MSRP; the brands tracked the news and informed the group that they would stop supplying the European investments of said group if the new Australian entity did not respect local sourcing rules. Another large retail group told me they were making 40% of their global EBT from Australia, where they only employed 4 staff to smooth arrivals at customs (they offered free 3-week shipping to Australia from their UK warehouse). Anecdotal evidence (such as French acquaintances buying glasses from Australian online retailers) seem to point at a reversal in the situation.
yxhuvud 11y ago
Long term, I think the traveling part is pretty nonsense. The reason is simple - as more people start to pay with cards instead of cash the problem goes away by itself. Not having to carry cash at all is a better solution than only having to carry a single kind of cash. As for worrying about banks and exchange rates - if that is a problem I suggest doing something similar to how roaming charges have been regulated. That will probably be necessary in the long term anyhow as a precondition for creating a single market for financial services.
- restalis 11y ago
  You suggest that when you go to another currency region you're ready to spend without giving much thought to the actual amounts you're pulling out of your pockets? Because if you do care about costs you're presented with, there is no way around the aforementioned "mental arithmetics" (due to the exchange rate, of course).
richmarr 11y ago
Travel, absolutely, but it seems to me a bigger benefits are in import/export accountancy and greater (convenient) access to suppliers. An increase cross-border trade would make a flatter, more efficient, marketplace for the win. Don't disagree with the points others have made on fiscal & monetary policy though. As with most things in life, this seems like an area where if someone claims to have the single true answer then they're selling something.

pjmlp 11y ago

On the other hand, 1 € in Portugal isn't the same value as 1 € in Germany, given the salary differences. Yet many brands, e.g. H&M, tend to have the same prices for some of their goods. Which leads to the disparity that we are now suffering from.

oblio 11y ago
Your argument is mostly invalid as H&M, for example, has tags in multiple currencies. And as a non-Euro Romanian I can tell you that the conversion rate is not favorable to the buyer.
- pjmlp 11y ago
  My argument is based on the fact that I have seen such tags with the same price for Germany and Portugal. It true that they don't do it for most of their products, but that doesn't change the fact I have seen such price tags.
  - oblio 11y ago
    My point is that for H&M and similar networks the prices are constant across countries, based on their pre-set FX rate, which is not in the favor of the buyer. The initial argument would only be valid if prices in different currencies would be smaller in the poorer countries, which doesn't happen anyway, regardless of currency.
    - pjmlp 11y ago
      > The initial argument would only be valid if prices in different currencies would be smaller in the poorer countries, which doesn't happen anyway, regardless of currency. But it does happen, on average H&M products are cheaper in Portugal than on Germany, except for those few cases I happened to stumble on.
      - issaria 11y ago
        I think oblio means that even if Portugal is not in the Euro zone with its own currency, it's unlikely to get a better price than now.
        oblio 11y ago
        Exactly. Unfortunately I am not that good at getting my point across :(
crdb 11y ago
People are globalized, and with the internet, routinely arbitrage price differences which is leading to a more global MSRP. For example, a study of over 1 million bank accounts in Australia (i.e. 1 in 22 Australians) in 2011 by the Commonwealth Bank of Australia showed that over 75% of e-commerce by revenue was cross-border (i.e. Australians were importing). Thanks to the rapid appreciation of the AUD until 2012, brands benefitted from as much as a 50% boost in MSRP locally, and Australians ended up importing not just clothes and cosmetics but things like lawn mowers. This higher MSRP was so profitable to the brands that they were very strict on enforcing it. I won't mention any names but an online retail shop was opened by a large European investment group in the hope of using gray import from Hong Kong to cut MSRP; the brands tracked the news and informed the group that they would stop supplying the European investments of said group if the new Australian entity did not respect local sourcing rules. Another large retail group told me they were making 40% of their global EBT from Australia, where they only employed 4 staff to smooth arrivals at customs (they offered free 3-week shipping to Australia from their UK warehouse). Anecdotal evidence (such as French acquaintances buying glasses from Australian online retailers) seem to point at a reversal in the situation.

yxhuvud 11y ago

Long term, I think the traveling part is pretty nonsense. The reason is simple - as more people start to pay with cards instead of cash the problem goes away by itself. Not having to carry cash at all is a better solution than only having to carry a single kind of cash. As for worrying about banks and exchange rates - if that is a problem I suggest doing something similar to how roaming charges have been regulated. That will probably be necessary in the long term anyhow as a precondition for creating a single market for financial services.

restalis 11y ago
You suggest that when you go to another currency region you're ready to spend without giving much thought to the actual amounts you're pulling out of your pockets? Because if you do care about costs you're presented with, there is no way around the aforementioned "mental arithmetics" (due to the exchange rate, of course).

richmarr 11y ago

Travel, absolutely, but it seems to me a bigger benefits are in import/export accountancy and greater (convenient) access to suppliers. An increase cross-border trade would make a flatter, more efficient, marketplace for the win. Don't disagree with the points others have made on fiscal & monetary policy though. As with most things in life, this seems like an area where if someone claims to have the single true answer then they're selling something.