How the Euro Turned Into a Trap

[THAIPHUKET]

From the Editorial Board of The New York Tiimes

.......................But many experts warned that it could make its members less stable unless it was followed by a tighter political and budgetary union. Since that did not happen, the currency union was left fully vulnerable to economic crises and to the will of Europe’s more powerful economies.

http://nyti.ms/1HS5zGv

[NeverSure]

The Euro was never about money or the economies. It was always about control. There is no reason under the sun other than controlling people and countries to have a common currency.

It will fail.

[Srikcir]

A currency vulnerable to economic crises.

Welcome to the real world of global economics.

There hasn't been in modern history any one currency that hasn't suffered setbacks either due to a nation's own failed economic policies or from failed economic policies of other nations. But the more nations that can join in a common currency backed by tariff free trade and capital resources, the more likely they will survive large economic aberations.

[montrii]

The Euro was never about money or the economies. It was always about control. There is no reason under the sun other than controlling people and countries to have a common currency.

It will fail.

Such a shortsighted, narrow-minded, and flat-out ignorant comment! Also pretentious, as if the poster had some deep ability to know the future. "Never about money or the economies," what nonsense! Does the poster know about all the struggles to break down trade barriers in the European states going back before WWI that eventually created "Benelux," a common market in the center of Europe which led to prosperity all around, eventually inspiring the European Common Market, the Euro, and . . . unbelievably, after centuries of internecine warfare . . . the European Union? So many forces involved, not just powerful corporations, but labor groups and people of good will and conscience? "No reason under the sun," ha! How about simplicity in crossing borders and buying goods in other countries, just for a basic starter. Sheeesh!

[elgordo38]

The Euro was never about money or the economies. It was always about control. There is no reason under the sun other than controlling people and countries to have a common currency.

It will fail.

Yes it has failed and now they are working on a new global currency. It will be the biggest failure of all.

[NeverSure]

The Euro was never about money or the economies. It was always about control. There is no reason under the sun other than controlling people and countries to have a common currency.

It will fail.

Such a shortsighted, narrow-minded, and flat-out ignorant comment! Also pretentious, as if the poster had some deep ability to know the future. "Never about money or the economies," what nonsense! Does the poster know about all the struggles to break down trade barriers in the European states going back before WWI that eventually created "Benelux," a common market in the center of Europe which led to prosperity all around, eventually inspiring the European Common Market, the Euro, and . . . unbelievably, after centuries of internecine warfare . . . the European Union? So many forces involved, not just powerful corporations, but labor groups and people of good will and conscience? "No reason under the sun," ha! How about simplicity in crossing borders and buying goods in other countries, just for a basic starter. Sheeesh!

1. You say that "Benelux," a common market in the center of Europe which led to prosperity all around, eventually inspiring the European Common Market, the Euro..."

2. So you agree that the common market without a common currency led to prosperity. Good.

3. I contend that this prosperity has not continued as promised under the Euro, and the headline news today proves it.

4. This would do nothing to prevent wars and has nothing to do with that.

Your posting style is rather rude, BTW.

Cheers

Edited July 26, 2015 by NeverSure

[montrii]

1. You say that "Benelux," a common market in the center of Europe which led to prosperity all around, eventually inspiring the European Common Market, the Euro..."

2. So you agree that the common market without a common currency led to prosperity. Good.

3. I contend that this prosperity has not continued as promised under the Euro, and the headline news today proves it.

4. This would do nothing to prevent wars and has nothing to do with that.

Your posting style is rather rude, BTW.

Cheers

Ah, neversure, sorry if it came across as rude, I do understand how that might be, but I was just calling it as I saw it. I could add more adjectives, but since I don't want to add to my rudeness, suffice it to say the comment made me mad. It exemplified to me a most unfortunate mind-set I see everywhere of using absolutes and seeing no subtlety in the events of human history, at a time when subtler understanding is sorely needed. Yes, the common market led to prosperity. I disagree that it "has not continued as promised under the Euro," or that current headlines prove that thesis. As another poster noted, all currencies have ups and downs. Who is at fault for this particular crisis? That's up for debate, plenty of blame to go around. But in this debate there have been voices both calling for careful and for draconian approaches. Take your pick there as to whose side you're on, but draconian won, this time. Maybe next time careful will win. There's a back and forth that is competely missed in your "It will fail" comment. If the moniker "neversure" reflects your actual attitudes in life, perhaps you'd do well to apply a little more of those to this question.

[NeverSure]

The Euro was ill conceived and will fail. It's just a matter of time. No such group of countries with different cultures and even different languages can be homogenized.

The only thing that might save it is total control. It was always about control so let's see how that goes for those who are trying to control. You know - the unelected masters who sit on their thrones.

It isn't working.

Cheers

[Naam]

The Euro was never about money or the economies. It was always about control. There is no reason under the sun other than controlling people and countries to have a common currency.

It will fail.

the US-Dollar did not fail when it was forced on the confederate states and the European Union did not (to the best of my knowledge) face a civil war since inception of the €UR.

[Naam]

No such group of countries with different cultures and even different languages can be homogenized.

the Greatest Nation on Earth™ proves the contrary.

[Loptr]

The EU was formed as a monetary and economic union, not a political union... What the EU has become is a union of countries that are being forced into political decisions mandated by the unelected economic bureaucrats in Brussels... The economies of each country in the EU is different, so you cannot simply lay a template over all countries and expect monetary flows to equate... Northern EU countries are far more productive economically than southern countries... As long as each country had the ability to print their own currency, they could inflate their way out of economic crisis... Not any more as all fall under IMF, ECB control... We now hear noise from leaders such as Hollande calling for a unified European government, which in my opinion was the goal all along... Slippery slope and it might have worked long term, but TPTB have screwed up any chance of success with further pressure placed on the EU nations by unbridled immigration of people from dissimilar cultures, placing further economic pressure on each country...

[montrii]

The Euro was ill conceived and will fail. It's just a matter of time. No such group of countries with different cultures and even different languages can be homogenized.

The only thing that might save it is total control. It was always about control so let's see how that goes for those who are trying to control. You know - the unelected masters who sit on their thrones.

It isn't working.

Cheers

Whatever, neversure, but the conversation would be more comfortable if you'd live up to your name and not be so all-fired sure about everything, making such grand pronouncements. We weren't discussing "homogenizing," as if Europe were some sort of milk, either. We were talking about a monetary system. And how do you think the almighty dollar got started? The 13 colonies had people declaring the same sorts of things as you are now. They all had different currencies and trading with each other was a ridiculous proposition. They worked it out and came up with a common currency. It was much more about convenience than control. And, just as in Europe, it was voted on. I'm sure there are some people who behave as unelected masters, but they certainly don't get their way all the time. OK, you see some bad headlines and preach doom and gloom. You're welcome to your belief, but I'd urge you to get real. There's a lot more to all of this than you appear to be seeing.

[Loptr]

The Euro was never about money or the economies. It was always about control. There is no reason under the sun other than controlling people and countries to have a common currency.

It will fail.

the US-Dollar did not fail when it was forced on the confederate states and the European Union did not (to the best of my knowledge) face a civil war since inception of the €UR.

Funny you should use those examples, because it took a Civil War in the US to impose central control as the Confederate states were attempting to secede from the Northern union due to social and economic reasons... Same as is happening in the EU today...

[montrii]

The EU was formed as a monetary and economic union, not a political union... What the EU has become is a union of countries that are being forced into political decisions mandated by the unelected economic bureaucrats in Brussels... The economies of each country in the EU is different, so you cannot simply lay a template over all countries and expect monetary flows to equate... Northern EU countries are far more productive economically than southern countries... As long as each country had the ability to print their own currency, they could inflate their way out of economic crisis... Not any more as all fall under IMF, ECB control... We now hear noise from leaders such as Hollande calling for a unified European government, which in my opinion was the goal all along... Slippery slope and it might have worked long term, but TPTB have screwed up any chance of success with further pressure placed on the EU nations by unbridled immigration of people from dissimilar cultures, placing further economic pressure on each country...

I wouldn't say they've screwed up "any chance," to me it seems more like a normal <deleted>. There are pressures, and they're not being handled well. OK. Maybe some solutions will be found. What is success, anyhow? 100 years? 500? Or 30? Let's watch and see what happens next.

[NeverSure]

The Euro was never about money or the economies. It was always about control. There is no reason under the sun other than controlling people and countries to have a common currency.

It will fail.

the US-Dollar did not fail when it was forced on the confederate states and the European Union did not (to the best of my knowledge) face a civil war since inception of the €UR.

Whatever, neversure, but the conversation would be more comfortable if you'd live up to your name and not be so all-fired sure about everything, making such grand pronouncements. We weren't discussing "homogenizing," as if Europe were some sort of milk, either. We were talking about a monetary system. And how do you think the almighty dollar got started? The 13 colonies had people declaring the same sorts of things as you are now. They all had different currencies and trading with each other was a ridiculous proposition. They worked it out and came up with a common currency. It was much more about convenience than control. And, just as in Europe, it was voted on. I'm sure there are some people who behave as unelected masters, but they certainly don't get their way all the time. OK, you see some bad headlines and preach doom and gloom. You're welcome to your belief, but I'd urge you to get real. There's a lot more to all of this than you appear to be seeing.

The USA was entirely different. It formed one country with one central government, one monetary system, one language and one set of goals. I know of no group and certainly no state that wants to disband it. Even though there was a Civil War 140 years ago it has functioned as intended.

Europe has no such common government and certainly not the Constitution and not a similar language as the USA has.

The US was formed largely by people who were escaping Europe and mostly the King of England. They were rebellious against the King to the point of having The Boston Tea Party^R and other things. The People, in democratic fashion, rose up against the Central Government of The King of England^R and had a revolution. From that came the homogenization but it was a willing homogenization.

Anyone who thinks that Europe remotely resembles the founding of the United States (United being important here) of America isn't paying attention.

Cheers.

Montrii ^^^ You really need to stop the insulting talk. It adds nothing to the points you want to make.

Cheers.

[montrii]

The Euro was never about money or the economies. It was always about control. There is no reason under the sun other than controlling people and countries to have a common currency.

It will fail.

the US-Dollar did not fail when it was forced on the confederate states and the European Union did not (to the best of my knowledge) face a civil war since inception of the €UR.

Funny you should use those examples, because it took a Civil War in the US to impose central control as the Confederate states were attempting to secede from the Northern union due to social and economic reasons... Same as is happening in the EU today...

I think Naam made an unfortunate choice of words. The Union didn't "force" a new currency after Lee's surrender. It won the war, and things went back to the way they'd been before. The dollar was a product of the original United States Constitution. And it solved many problems arising from the use of multiple currencies.

[NeverSure]

The Euro was never about money or the economies. It was always about control. There is no reason under the sun other than controlling people and countries to have a common currency.

It will fail.

the US-Dollar did not fail when it was forced on the confederate states and the European Union did not (to the best of my knowledge) face a civil war since inception of the €UR.

Funny you should use those examples, because it took a Civil War in the US to impose central control as the Confederate states were attempting to secede from the Northern union due to social and economic reasons... Same as is happening in the EU today...

The US evolved. The first settlers arrived from England in the early 1600's. Eventually there were 13 colonies of England. Those colonies formed the first 13 states after the War of Independence (against the king) in 1776. That's when the constitution was ratified and a central US government was established.

Yes there was a Civil War but no one today wants out of the USA.

The USA isn't a democracy. It is a republic of 50 states with each state, regardless of population, having an equal number of senators in the senate. This was done to stop the states with large populations from ruling the smaller ones. It works very well.

The USA didn't have the initial problems that we see in Europe as all of the colonies wanted the republic and they got to vote on it. The People did. Although far from perfect, it has worked better than any system in the world since its inception.

Cheers.

[montrii]

The Euro was never about money or the economies. It was always about control. There is no reason under the sun other than controlling people and countries to have a common currency.

It will fail.

the US-Dollar did not fail when it was forced on the confederate states and the European Union did not (to the best of my knowledge) face a civil war since inception of the €UR.

Whatever, neversure, but the conversation would be more comfortable if you'd live up to your name and not be so all-fired sure about everything, making such grand pronouncements. We weren't discussing "homogenizing," as if Europe were some sort of milk, either. We were talking about a monetary system. And how do you think the almighty dollar got started? The 13 colonies had people declaring the same sorts of things as you are now. They all had different currencies and trading with each other was a ridiculous proposition. They worked it out and came up with a common currency. It was much more about convenience than control. And, just as in Europe, it was voted on. I'm sure there are some people who behave as unelected masters, but they certainly don't get their way all the time. OK, you see some bad headlines and preach doom and gloom. You're welcome to your belief, but I'd urge you to get real. There's a lot more to all of this than you appear to be seeing.

The USA was entirely different. It formed one country with one central government, one monetary system, one language and one set of goals. I know of no group and certainly no state that wants to disband it. Even though there was a Civil War 140 years ago it has functioned as intended.

Europe has no such common government and certainly not the Constitution and not a similar language as the USA has.

The US was formed largely by people who were escaping Europe and mostly the King of England. They were rebellious against the King to the point of having The Boston Tea Party^R and other things. The People, in democratic fashion, rose up against the Central Government of The King of England^R and had a revolution. From that came the homogenization but it was a willing homogenization.

Anyone who thinks that Europe remotely resembles the founding of the United States (United being important here) of America isn't paying attention.

Cheers.

Montrii ^^^ You really need to stop the insulting talk. It adds nothing to the points you want to make.

Wow, you're more sensitive than I am. I don't see how I've been insulting. It's just that calling yourself "neversure" and then being so positive about things as to say flatly "it will fail," "It was never about . . ." and "no reason under the sun," to mention a few, does not compute to me. You don't seem to be keeping an open mind about the issue, and I'm pointing that out. If that's an insult, it's not intended as such. You do see you are making rather grand prophecies, do you not?

Now in relation to Europe and the founding of the US, you're muddying the waters. I was merely stating a fact about the problems the US faced after winning the Revolutionary war, the problems which led it to create a common currency and agree on a new and strong constitution. It took quite a few years for them to get to this point, after struggling with a much looser union. This speaks to your contention that control is the only factor at work in creating a single currency. No. Convenience is certainly a factor, would you not say? I traveled Europe when it had many currencies, and crossing borders meant all sorts of financial complications. And there are plenty of other factors.

If you find my comments insulting, I'm sorry, but I do find your observations less than thoughtful, informed, or incisive. They are simply statements of opinion, presented as truth. I say that not to hurt you or to support my own arguments, just to say that this is part of what I see wrong in political discourse today, opinions stated as fact. I'm not going to tell you what's going to happen with the Euro, whether it will meet with success or failure, whatever those terms may mean in this case, but you are. You might even be right, I don't know, maybe it will fail. But you've certainly given me no reason to think that with these pronouncements of yours.

[Naam]

The Euro was never about money or the economies. It was always about control. There is no reason under the sun other than controlling people and countries to have a common currency.

It will fail.

the US-Dollar did not fail when it was forced on the confederate states and the European Union did not (to the best of my knowledge) face a civil war since inception of the €UR.

Funny you should use those examples, because it took a Civil War in the US to impose central control as the Confederate states were attempting to secede from the Northern union due to social and economic reasons... Same as is happening in the EU today...

I think Naam made an unfortunate choice of words. The Union didn't "force" a new currency after Lee's surrender. It won the war, and things went back to the way they'd been before. The dollar was a product of the original United States Constitution. And it solved many problems arising from the use of multiple currencies.

fact is that the Union forced the old currency on the confederate states as the existence of not only "federate" Dollars but also individual "state" currencies of different states proves:

https://www.google.co.uk/search?q=confederate+money&lr=&hl=en&as_qdr=all&tbm=isch&tbo=u&source=univ&sa=X&ved=0CCkQsARqFQoTCMP6tfSY-sYCFcnUjgodZK8HOg&biw=917&bih=579

and as far as different cultures and spoken languages exist the U.S. was and still is, quod erat demonstrandum, a prime example.

case closed, bailiff next case!

disclaimer: i hate the EU-crats in Brussels, i'd like to see the European Union disbanded, i give a flying fàrt for the €UR and would like to see it fail. unfortunately i am in this respect a wetdreamer like many others.... because it won't happen

[NeverSure]

The people of the Eurozone aren't an intricate part of the process. They have essentially unelected leaders who they have little no loyalty to. Many resent it.

Their local leaders don't have local control but rather have given the control to this group. This group is spending the money of the more powerful countries on the people of the weaker countries with what they call "loans".

Greece has to fail. It can't succeed under the current trajectory. It is the canary in the coal mine to be followed by Portugal, Italy and Spain.

This was sold as a plan for economic prosperity and apparently an end to conflicts. It has had the opposite effect as deep resentment builds and debt soars unchecked. The UK's budget deficits are horrible and its national debt as a percentage of GDP is rapidly approaching that of the USA. It doesn't have the natural resources or the economic engine to support the debt. No, it doesn't have the Euro but it supports the EU.

There isn't the feeling of personal patriotism in the EU that would cause all people to rise up and defend just one flag. It is a disjointed and motley group that's unorganized and disorganized. The wheels will come off.

Cheers.

Edited July 27, 2015 by NeverSure

[NeverSure]

Wow, you're more sensitive than I am. I don't see how I've been insulting. It's just that calling yourself "neversure" and then being so positive about things as to say flatly "it will fail," "It was never about . . ." and "no reason under the sun," to mention a few, does not compute to me. You don't seem to be keeping an open mind about the issue, and I'm pointing that out. If that's an insult, it's not intended as such. You do see you are making rather grand prophecies, do you not?

It would appear that you are unable to discuss without engaging in personal attacks. Welcome to my ignore list.

Cheers.

[Naam]

excerpt from NY Times editorial mentioned in the opening post:

For example, returning to the drachma, which would trade at a deep discount to the euro, could help the Greek economy by making its island resorts, olive oil and feta cheese cheaper for tourists and foreign buyers.

adding the ugly booze Ouzo will surely do the trick!

[rott]

Before the introduction of the Euro, John Major (remember him?) proposed making the ECU a hard currency and member states maintaining their national currencies.

On the surface this sounded an excellent idea to me, but he was roundly shouted down and derided for suggesting it.

With the benefit of hindsight would this have worked or would the practical difficulties of a dual currency system have been too great?

[Naam]

Before the introduction of the Euro, John Major (remember him?) proposed making the ECU a hard currency and member states maintaining their national currencies.

On the surface this sounded an excellent idea to me, but he was roundly shouted down and derided for suggesting it.

With the benefit of hindsight would this have worked or would the practical difficulties of a dual currency system have been too great?

the ECU was based on a basket of member country currencies, among these some weak currencies such as Spanish Peseta, Italian Lira, Greek Drachma and Portuguese Escudo. but even without the weak ones there was no way to make it "hard" because the strong currencies (e.g. Pound Sterling, Deutsche Mark, Dutch Guilder) fluctuated wildly vs. US Dollar and the bunch of other currencies pegged to the Dollar.

[lannarebirth]

No such group of countries with different cultures and even different languages can be homogenized.

the Greatest Nation on Earth™ proves the contrary.

That is true, but aside from being a monetary union we are also a fiscal union, which often requires the transfer of a significant percentage of the treasury to "less advantaged" states. It is not a loan, it is merely a government disbursement. A transfer of wealth. Are the citizens of Germany ready to adopt a similar system whereby their tax dollars perpetually go to support "states" that consume more than they produce? We accept that in the Good Ol' USA™, but I'm not sure the good citizens of Germany are ready for that yet.

Edited July 28, 2015 by lannarebirth

[Naam]

No such group of countries with different cultures and even different languages can be homogenized.

the Greatest Nation on Earth™ proves the contrary.

That is true, but aside from being a monetary union we are also a fiscal union, which often requires the transfer of a significant percentage of the treasury to "less advantaged" states. It is not a loan, it is merely a government disbursement. A transfer of wealth. Are the citizens of Germany ready to adopt a similar system whereby their tax dollars perpetually go to support "states" that consume more than they produce? We accept that in the Good Ol' USA™, but I'm not sure the good citizens of Germany are ready for that yet.

the fiscal union (transferring tax dollars from well-off federal states to less well-off ones) exists since ages in Germany. i have no idea whether that kind of union will be established in Europe. but also the fiscal union of the United States did not appear out of thin air with the declaration of independence 239 years ago.

[Naam]

[lannarebirth]

No such group of countries with different cultures and even different languages can be homogenized.

the Greatest Nation on Earth™ proves the contrary.

That is true, but aside from being a monetary union we are also a fiscal union, which often requires the transfer of a significant percentage of the treasury to "less advantaged" states. It is not a loan, it is merely a government disbursement. A transfer of wealth. Are the citizens of Germany ready to adopt a similar system whereby their tax dollars perpetually go to support "states" that consume more than they produce? We accept that in the Good Ol' USA™, but I'm not sure the good citizens of Germany are ready for that yet.

the fiscal union (transferring tax dollars from well-off federal states to less well-off ones) exists since ages in Germany. i have no idea whether that kind of union will be established in Europe. but also the fiscal union of the United States did not appear out of thin air with the declaration of independence 239 years ago.

Sorry, I wasn't clear. I did mean states to mean those other countries that form the European Union and not the states which form Germany. And yes you're quite correct that the formation of the American union, both territorial and fiscal did not appear out of thin air. There was a lot of strife and upheaval and a great deal of time involved.

[Naam]

Sorry, I wasn't clear. I did mean states to mean those other countries that form the European Union and not the states which form Germany. And yes you're quite correct that the formation of the American union, both territorial and fiscal did not appear out of thin air. There was a lot of strife and upheaval and a great deal of time involved.

you were quite clear LRB and i mentioned the existing German fiscal union only to demonstrate that it is nothing strange for Germans although looking at the present European situation there is no doubt that only a few Germans would support a fiscal union with the other EU countries.

on the other hand, some sort/kinda fiscal union does already exist, is used and abused since many years. i refer to the EU system of agricultural subsidies handled by the good-for-nothing political clowns in Brussels who subsidise (among others) that producers are even compensated for destroying all kinds of vegetable, fruit, dairy products and even wine

€295,500,000,0000.- were disbursed in 2013 (the Brits are fuming because they are the highest net payers). a full fiscal union means of course a much higher amount but then 295.5 billion €URos are not peanuts!