Slashdot Mirror
The Euro
Dizer writes: "Today sees the historic introduction of the new European Currency (Euro) into European hands. The Eurozone market, with a population
of 300 million people, will be cashing in their Punts, Francs and Deutschmarks in favour of the new common Euro currency. This is the biggest currency transition in history, vive l'Europe! See stories on
ireland.com or the BBC."
Patrick Doyle
I mod down every jackass who puts his moderation policy in his sig. Oh, wait a sec....
The fact that Ireland has done extraordinarily well with European integration is probably NOT why it is using the Euro. Ireland has had more than its share of problems with the English, and probably welcome any changes that lead it away from English dependence.
-- Dan
The UK opted out of joining the party back in the early 90s while the Conservatives were in power. The current 'New' Labour government has promised a referendum - they want us to join the Eurozone but prefer to leave it to the voters to take the blame for either joining or staying out.
The UK government's policy right now is that we should join the Eurozone "when the time is right" and "when certain conditions are met". The media are now bored with asking what the conditions are, because Blair refuses to state the conditions, just in case we happen to meet them, and then he'd have to make a decision.
Personally, I think Blair will wait about 6 months so that we can see that the Euro hasn't blown up in French and German faces, and then he'll set a date for the referendum.
Current opinion polls suggest us Brits don't want to adopt the Euro. However, I'd guess that 90% of the public are clueless about the implications, and all they see are rabid tabloid headlines that make it look more like a Martian invasion than a currency change.
The primary objection from those in the know is that losing the pound means losing control over setting interest rates. The primary objection from those without a clue is the change from pounds and pence to using Monopoly money.
When the factories in Detroit lay people off they can move to Dallas, LA, etc. But when people are layed off in Paris they won't be able to chase jobs to Berlin.
uh. labor CAN move freely within EU. try learning facts of the world outside USA before bashing. could be enlightening exprience.
signatures pending - ansa@kos.to - (dont mail there)
Is one answer, there are others, our economy is out of step with that of Europe, we have very different tax rules.
But IMO as a Brit the real reason is that we hate the fact that someone else came up with a better idea. Personally I can't wait to use the Euro in the UK as then it will make getting a mortgage or a loan from A.N. Other country much easier and I can pick the rates in a much more competative way.
The next few years should be great for the UK as we aren't going into recession (touch wood) so we'll hopefully steal a march. We could steal a much bigger march as the strongest fish in the Euro.
An Eye for an Eye will make the whole world blind - Gandhi
Its interesting to see that they issued a 1 euro coin from the start, as canada does with its dollar, rather than attempting to introduce a coin later, as the united states has unsuccessfully tried to do again and again with first the silver dollar and then the golden dollar.
Since 1 euro coins are likely to see more circulation than larger denominations, it makes sense to use coins, because coins will last longer and so have lower replacement costs.
Remember, there were no nuclear weapons before women were allowed to vote.
Well, there are certain advantages to having your own currency. The big thing is that interest rates, and the exchange rates are adjusted to your economy, not somebody elses.
Witness what's happening in Argentina right now. They pegged their currency to the U.S. dollar - in all practical terms that means they adopted the U.S. dollar. But the U.S. dollar kept gaining value as the American economy grew, so that Argentinian exports became too expensive and the economy suffered. A free-floating Peso would have devalued to keep things in balance.
This probably won't happen in Europe because European countries have been integrating their economies over the last half decade. With common regulations, and free-flowing goods, the economies should grow (or shrink) together. As long as that's true things should work out.
It is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail. - Abraham Maslow
Well, Europe and the Euro work flawlessly without the Brits. I wonder if the same can be said about the tea suckers without the euro?!
I am german and I lived in London for some time - I am always surprised how much propaganda wars are fought around anything european/EU.
The normal Brit would gain a lot and pay less, if those high prices would come down a bit.
For example: cost of living (food, electricity) - even buying a simple CD (are Madonna CD is a Madonna CD no matter where you buy it) are extremly overpriced compared to the continent.
But I guess the british like it exclusiv?!
First, someone really HAS to fire michael.
/. reader might be in their 20s, middle-class, into computers. Do you guys not feel more in common with a middle-class, mid-20s linux hacker who happens to live in, say, Finland? Or Indonesia? Than you do with someone of your own nationality, who is 72, from a different class, and totally computer-illiterate?
... Think I'm paranoid? It happens every other time Europe is mentioned on /.
/. readers' awareness of international social, political and cultural issues was as great as their technical awareness.
I cant remember a story he has posted which doesnt include a totally unnecessary, snide, catty bitch in it somewhere. "rfid-tags-coming-soon" - oh for fucks sake. we've had that story. any excuse to smugly depreciate whatever the story is about, he just HAS to take it. Well, its deeply unprofessional and downright irritating.
Second, the people who say this isnt newsworthy are either smoking crack, or are depressingly isolationist and inward-looking Americans who really dont care about the rest of the world. Its bad enough when your president believes he can just ignore the rest of world and get on with what he wants, but when geeks do it??
The "star trek" analogy posted was right on point. Guys, you're supposed to be interested in improving society (what with all these YRO stories), but when, for the FIRST TIME IN THE HISTORY OF THE PLANET, countries voluntarily put their narrow, national identities in second place to the greater interests of cross-cultural harmony, you dont care?!?!?
Dont get me wrong. I'm not stupid; I know that in practice, the EU is often needlessly beaurocratic, meddlesome, corrupt even. But if you can forget that and think of the original philosophy behind it - it really does strike me as a first step towards a potential "star trek" future where there are no countries, there are no "Frenchmen" or "Afghans", only "Earth" and "humans".
Looking at the state of the planet (wars, etc), dont you think it would be a GOOD thing if there were only "humans"?
I know a lot of people here, from all countries, are patriotic / nationalist. Nationalism is false. Nations are false. They arent eternal, they arent natural. Nations and nationalism were invented around the 19th century. Thats a whole different subject so I'll say no more, but I'm doing my thesis on this subject, and when you study the phenomena of nationalism for more than 5 minutes, you realise what a crock of shit it is.
Honestly. I guess a typical
And if none of that has any resonance with you - there's always pragmatism. A currency across such a huge population WILL affect you... this teeny thing called world trade, remember? If the Euro succeeds wildly, it could challenge the international primacy of the dollar. Better believe that'll affect you. If it crashes spectacularly, better believe the US will feel the economic consequences too.
Now I'm just waiting for someone to label the whole of Europe "socialist" without any understanding of what that means, and without any explanation of why something done for the benefit of society should be a BAD thing... *sigh*
I only wish
Rant over.
So, you congratulate the Brits for being selfish and nationalistic? The irony is, of course, that the British economy and currency are in pretty sad shape. Britain isn't a wealthy empire anymore, it has become a second-rate nation. Britain only stands to gain by joining the monetary union, as many businesses might prefer to have their European offices in an English-speaking country. But until Britain adopts the Euro, it just doesn't make much sense for businesses to go there.
Dunno. Time will tell I guess. But I don't see why the differences between European states should be greater than the differences between (for example) American states. Labour, goods, and capital move freely, so when one part of the Eurozone becomes undervalued investors should come in and snap up the bargains.
It is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail. - Abraham Maslow
It is precisely this attitude that makes me ashamed to be British.
Vive la EU!
Seriously:
There's a widespread assumption in the UK, and most widespread among the Euroskeptics, that we are unequivocally better than everyone else and that their ways of doing things are worse.
I don't buy it. Doing someone else down is the nastiest expression of patriotism, and usually conceals a narrow-minded reluctance to scrutinise one's own actions.
Yes, the banking currency-conversion objection is valid: and so are the issues to do with non-anonymity of large-denomination notes.But the exchange rate doesn't fluctuate wildly -- the Pound is typically locked to within +/- 0.1% of the Euro.
Personally, I'm looking forward to using the same currency whether at home or abroad. And I'm looking forward to the opportunity to vote for tighter integration with the EU.
When banknotes where first introduced over 17th to 19th century, they were viewed as certificates that a certain bank (usually a single "central bank" per country), would exchange for something of tangible value (usually an equivalent in coins made of precious metal). After WWII a monetary system was introduced in which the USD was the only bill pegged to gold, and other currencies were floating against it. The emptyness of the Fed's gold reserve and the oil crisis broke that system in the 70s, replaced for the first time by the complete floating of all currencies agains each other, with none pegged to any tangible good, and the IMF playinga pivotal role of watchdog to ensure this balance does not diverge.
But the USD became used so widely in international transactions, that it became the de-facto standard against which the currencies values were measured. This gave a huge technical priviledge to the US : the USD could be ridiculously cheap, as it was in the early 90s (when a USD was worth the equivalent of about 0.80 euros in the european currencies of the time), without making holders of USD poorer, since the price of goods on international markets was labelled in USD, giving the US industry an artificial competitive advantage.
Conversely, the USD could be ridiculously overpriced, such as in the mid 80s when it was 25% more expensive then it is now compared to European currencies, making it easier for the US government to finance a huge deficit, while still being able to sustain an abysmal deficit in the balance of payments (since creditor institutions used USD as their reserve currency)
The main economic sense behind the euro is to take away part of that privilege from the US, by making Europe a zone where internal business could be made without any influence of the USD's values. Actual euro banknotes allows banks around the world to actually stash the currency, and makes the integration irreversible, and hence more reliable.
So the US has been considerably opposed to Europe monetary integration, and have worked hard, with their British sidekicks, to make it not happen. Actually the changeover might be seen as the biggest thing that has went in the face of US national interest in the last 30 years, maybe since the end of WWII.
Simple, because they were given the choice.
In many countries (including Belgium, my own) people were considered cattle that had to be herded towards the Euro. If referenda were held, like in Denmark, people held back. The press then commented that perhaps they would need some more conditioning. Over here they simply did not make the mistake of allowing a referendum, although our prime minister wrote in his pre-electoral campaigns and political treatises how he worshipped the referendum on every possible political issue.
This is why I abhor a common Euro-state: from an economic point of view it might make sense, but we're trading it for civil liberties. Europe is slowly sliding to a social-democracy (social as in "socialist international", and "democracy" as in "we don't execute dissenting opinions yet but we sure as hell will make life hell on them using political correctness"). If people think I'm exaggerating, consider Austria's treatment after they democratically formed the "wrong" coalition in the eyes of the socialist parties of the majority of Euro-countries. To whom still thinks Austria's ordeal is related to harsh immigration standpoints: the social-democrats in Denmark were far more misoxenic in their election campaign yet met no such aggression.
Returning to the Euro-point. Britain is wise because they now get a free test ride to see how the Euro will evolve. If they like what they see, they can jump in because all the other countries are eager to see this bastion of resistance cave in. If the Euro devaluates instead, they have a lot to gain.
Really? Name a major manufacturer of computing equipment that in the EU that is not a foreign conglomerate.
Get used to paying more for the products you really want.
Just to clarify the parent poster's point, it is theoretically possible for everyone in a country to reduce all of their salaries and government benefits to compensate for their
decreasing productivity. However, it is generally impractical to get everyone to agree to do this in sync, while it is trivial if not automatic if that country has a separate currency.
The situation in Argentina is a bit different, because part of the problem is that the government claimed to back its currency with more US dollars than they actually currently have.
It's true, but contrary to the case of south American coutries which don't have a say about the Fed's policy, the economics policies of European countries are more or less concerted, but more importantly, they are bound by restrictive rules about public deficits and inflation. Actually Argentina was considering sharing it's currency pegging between the euro and the USD, which would have made sense since the Europe, and particularly Spain, is their main trading partner. The European Central Bank has proven in three years that it was truly independant, and deaf to the claims of governments and private financial institutions. This makes it more credible that they are actually solely commited to controlling the only true measure of a currencie's value : inflation (what you can actually buy with your money). Also, ironically, the one government that is pushing the most currently towards a more "flexible" monetary and public deficits policy, is not Italy and Greece, but ... Germany, the only country in Europe that is in a recession, and the one with the worst surge in unemployement and pubic deficits.
Remember, the inclusion of former east Germany has made their average per capita GDP lower than the ones in the UK, France and Italy !
Just a slight problem with reality, though?
On US (and much other) currency the buildings are national monuments symbolic of a nation's power and/or aspirations... :-(
However the bridges and arches to nowhere on the Toytown Euro cash are entirely imagined
By the time the USA had fully standardised on the dollar (1870s - iirc - when it finally had the reserves to back it up) they certainly had enough symbols of national identity.
The Euro is part of the project to impose 'nationhood' on the united states of Europe, despite their being no such nation - and thus no symbolic bridges and buildings upon which everyone can agree
http://fsfeurope.org/
But the bigger threat is inflation. It's simple and happens anytime there are changes to standard pricing schemes, be that a GST/VAT, exchange rate, whatever.
- Manufacturers don't want to receive less than what they've previously been getting. So they round up.
- Distributors don't want to receive less than what they've previously been getting. So they round up.
- Retailers don't want receive less than what they've previously been getting. So they round up.
It all gets passed on to the consumer (me). Now I need more money to pay for this, so I ask for a raise....That's the classic price/wages spiral.Economics 101 says that inflation is inversely related to the exchange rate. So that means if inflation goes up, then the exchange rate will go down.
As Germany (the driver of EU commerce), has just officially gone into recession, this inflation pressure is going to be a serious confidence issue in the Euro. As the currency depreciates, there will be the "I told you so" bleating...
Britain, by not taking part of the Euro, is best placed to benefit in the short/medium term. Short term means less than 2 years. Medium term means 2-5 years in financial circles - IT has different time lines.
The only thing that concerns me is the effect this has on the German economy. If there is serious inflation over short/medium term, this could all come undone. If there's not, and the German economy kicks in during this period, then the Euro will take off.
So does Anonymous Coward have good karma?
The control of this currency rests with the German Government. Unlike the presidency of the EEC, which rotates so that each country can have a turn at running Europe, the control of the Euro is fixed with the Germans.
This is not fair or right.
The UK is the most powerful economy in Europe, and its government is clearly the best at managing an economy. If anyone should be running the Euro, fixing the interest rates and running the inevitable European tax system, its the Bank of England, and NOT the Bundesbank.
Either way, whoever is running the Euro, giving control of your currency to another nation is suicide.
Can you imagine the US Treasury accepting the control of the Dollar and the US economy from Canada or Mexico?
That is precisely what is happening in Europe. This is totally wrong, and everyone here is being brainwashed into accepting the Euro because it is superficially convenient.
First of all, stating that the UK is the most powerfull economy of europe is bullshit. Expressed in growth, Ireland wins. If you consider the value of the pound to be the measuring tool, then might I remind you that a strong currency makes export (selling, profits) harder. Most of the european countries are exporting much more than they are importing. The reunion of germany has been payed with the germans giving up their strong DM. This was negotiated by Jacques Delors, Mitterand and Kohl. So give the germans credit where due, they are pulling something off that Europe in itself has yet to make true, political and total unification. It takes time, it hurts, and it is certainly not easy. But in the end it makes us all stronger and brings more stability in our fortress than ever before. I think it's simply the right way to tackle the bigger battle at stake here: The economic wars with the US and Asia.
By the way, the euro is not 'fixed with the germans' as you said. I consider that a typical narrow visioned patriotic view on the matter, but not a clear thinking one. The euro is controlled by the european central bank, which is headed by dutchman Wim Dhuisenberg. Germany is economically still the driving force behind it, because they are simply plain good efficient commonsense hardworking people. That is not to say other states don't work as hard, they simply are not as efficient (and by culture, they usually didn't need to be)
I'm sure this sounds horrendous, but London shopping malls say they ARE accepting and returning euro currency. That's right. We will not need to change currencies and pay taxes whilst doing so in your country, whch is of course a shopping benefit and a way to make sure tourists don't go to Paris instead because of the money thing. People can travel and shop with on single currency. It will make trading goods fairer, and will in the long run slowly integrate a respect for foreign cultures and standards through the pricing of the same goods in different parts of europe. Like Prodi said, we carry Europe in our pockets now, it's not just a far from our beds thing. I'm proud of it, and as far as I am concerned there cannot be enough Europe!
Stating that Brittain needs control of the currency is a laugh, you don't even want to be part of it, but oh look, now that we've got it you want to control it ? That sounds like a envious kid in pre-school. We need Brittain in the system, because yes we want your strong country to support the currency, talking on the same level that every other nation does, and we're sure that in the long term the UK will come to acknowledge the benefit of the Euro. It's not about control, it's about Unification. The UK is no longer an island, but it takes some time for people to see that, along with Denmark and Noorwegen.
- Positive thinking Belgian.
With great power comes great electricity bills.
I would suggest that you try thinking through the poster's comments before engaging in ignorant-American bashing.
The United States does have true labor mobility. Moving from one section of the US to another for economic advantage is not only easy, it is very common. In addition to the lack of legal barriers, there are no language barriers and few cultural ones.
Are you asserting that the average Parisian, having just been layed off, could and would chase jobs in Berlin? The average Detroiter could and would do so in Dallas. The Parisian is prevented from doing this, but the barrier is de facto rather than de jure as you seem to assume. From a macroeconomic perspective, it amounts to the same thing: the workers do not, in fact, move.
London is the number one financial place in Europe, it would have been pretty hard for another country to get this institution, if Britain had joined right away.
I'm Portuguese, and I can say that Portuguese usually speak two foreign languages -- English and French. Couple that with the language proximity to Italian and Spanish (enough to get you started, if you travel there), and you've opened up a great part of Europe.
I'd say that Europeans tend to settle when they get older (mid-thirties). But that's natural. It's impossible for 100% of the population to be mobile. Younger people tend to grab the oportunity to travel. I don't know the US, but I'd guess the average red-neck Texan won't move to Sillicon Valley too quickly either,
If at first you don't succeed, skydiving is not for you
You seem to imply that it is bad for a currency's exchange rate to constantly drift lower. It could be argued that from a European perspective that it is VERY GOOD. Their exports have become cheaper making them more desirable and thus generating jobs. It has also made imports more expensive thus encouraging local solutions and generating jobs. For some reason, people seem to think their nationalistic pride is hurt when a currency's exchange rate drops. This is missplaced pride.
I do think they understand it very well. Rounding should always be done in the last step, e.g in the consumer-retailer chain with the individual prices, not the first step which in this case was the currency fixating inbetween the 12 Euroland currencies. The earlier you introduce rounding, the more impact it has. If the Euroland currencies' values would have been rounded to the Euro, the national economies and trade would have been greatly affected. Just skipping some decimals would increase or decrease the national debts and expenses and budget and export incomes and whatnot and cause economic unbalances, the greater the rounding. And roundings would have to be great in some cases, and all this for a questionable gain in currency transition. Remember that this is a transition, not an ongoing conversion, so artificially increasing national debts and possibly reducing profitability for export industries just for some additional one-time ease in the human transition is questionable. Computers and pocket currency converters can handle this easily, and the governments also have provided cheap pocket currency converters en masse to people for the last year.
Most prices are set so they have a nice psychological point. This is why cars in the US are adversied as $19,999 and not 20 grand. Without a E$.25 coin, the price of coffee isn't going to .75 but will soon go to 1.00.
Yes, and the danger of new psychologigal prices in fact making things more expensive has been greatly discussed. This is why shops have been required to also list all prices in Euros for the last year, even if the Euro wasn't available back then. Even if this probably doesn't eliminate price increases, it probably limits them somewhat since the people who noted the previous prices in Euros will notice if they suddenly are "rounded up" to a psychologically attractive price, and put pressure on the shops.
GNU/Linux. The Freshmaker.
I would suggest that you try thinking though the context of your statements before engaging in ignorant-Europe FUD.
Many more people understand and even speak multiple languages here in Europe than the average American can even start to imagine. And the percentage of people who don't do so is falling all the time.
Besides, it's not because people in Detroit and Dallas all speak American english that they move around just as easily as you imply. There are many more reasons than language to stick around in the same area.
Linux user since early January 1992.