Discontent with the euro

There has been alot of discussion in certain countries (notably Germany and Italy) about scrapping the euro and returning to their old currencies. Now for the time being this sounds more like people's discontent at the poor performance of their economies. But will it stay that way, if these countries economies don't improve is it possible that reverting to the older currencies becomes a viable option?

Here's a link with some info.euro woes

I don't think Europe will abandon the Euro.

I bet most of the complaints about higher prices came more from businesses, having to readjust prices anyway due to the new currency, raising them, not an intrinsic problem with the currency.

I don't see any chance whatsoever of any EU countries abandoning the Euro and trying to go back to an old currency.

The characters in Germany or Italy that were talking about this were not 'heavyweight' or 'serious' people (an Italian 'social affairs Minister' from a junior party in the coalition gov was as senior as it got IIRC).
The rest was newspapers talking about the fact that anyone was talking about it at all.

In many respects this reminds me of when the UK went decimal in feb 1971 (who remembers their converters and the collections of shiny new coin sets? ).
The older generation hated it (some still do) and it was blamed for all sorts of sneaky price rises and people taking advantage.
......and in fairness some of these complaints were perfectly fair and true.

But even so that did not make the move unworthwhile or not beneficial to the national economy in the long run.

The same will be true of the Euro IMO (and sadly the UK will no doubt have to go through all that when we finally do make the move into it).

The Euro is here and is already the world's 2nd largest openly traded 'hard' currency; it is a reserve currency for countries all across the globe (including the USA now).
In short it is now to big to be allowed to fail and it won't.

Originally posted by sminkeypinkey
The characters in Germany or Italy that were talking about this were not 'heavyweight' or 'serious' people (an Italian 'social affairs Minister' from a junior party in the coalition gov was as senior as it got IIRC).
The rest was newspapers talking about the fact that anyone was talking about it at all.

I dont know about the italians, but Wolfgang Clement and Hans Eichel are THE heavyweights in german economic politics. However, I dont see any realistic considerance to abandon the € now or within the medium future. After all the whole issue was to large parts pushed by Germany itself. That the Germans want their DM back is due to singlemindedness (as I am a Kraut, I may say so) and the sense of security the DM gave the country (a somewhat false sense, since it lost 76% of its value from 1949-1998). Still, the DM was sort of the child and mother as well of the german "Aufschwung", the rise to economic power and stability after 2nd WW.

What I dont understand is the still strong disagreement not with the € itself, but the abandoning of the DM. After all, Germany had no less than six different currencies within the last century. Although it IS true that some prices have nearly doubled, as the currency tags simply have been replaced by an € sign, so it generated a price climb of 95%. Another thing that played into this was the very bad vegetable crop in the year of the €s public introduction, which made the price climb virtually even more severe.

I dont know enough about recent italian economics to comment their situation, but I do know that the Lira always was one of the weakest major european currencies in terms of stability. This country virtually needed the Euro, if not only for the Mafia.... a while ago I read an article about the Euro being highly anticipated in certain circles, because with 500€ notes, you can carry as much as 4 million € in one standard briefcase, whereas the sam ecase filled with 100$ notes would only be worth 1.3-1.5 million $...

Originally posted by Lonestar24
I dont know about the italians, but Wolfgang Clement and Hans Eichel are THE heavyweights in german economic politics. However, I dont see any realistic considerance to abandon the € now or within the medium future.

- As a German I defer to your greater knowledge but I am surprised if you are saying these men have articulated 'anti-Euro' sentiments.

Eichel apparantly called a meeting to discuss Europe's economic state of affairs. (but as I have not seen a report from thme I am loath to simply accept the tone certain 'newspapers' - particularly US owned ones - have given to the meeting)

The phrase I heard (reportedly from Clement) was that "Germany was paying a not inconsiderable price" by not being able to set her own interest rate to suit her own specific conditions.

A criticism yes but it's hardly a comprehensive evaluation (there was no reference for instance of the reduced costs and the spur this has given to the German economy) and neither is it a call to leave the Euro.

I would be amazed if these people would be happy that their comments and any criticism was being used to claim they were standing 'against the Euro'; the Euro's not perfection and just because one says then that it is not is hardly grounds to imply scrapping it and trying to revive the old Dm, surely?

(Anyone care to imagine the grotesque economic mess if Germany were to leave the Euro and attempt to revive the Dm?
I very much doubt it would make anything 'better' for Germany or anyone else. )



[edit on 20-6-2005 by sminkeypinkey]

Discontent with the euro within the power circles in europe probably has to do more with politicians playing on people's fears about the EU as well as a pathetic vote getting startegy. Don't these people realize that it would be economic suicide to dump the euro

I think there is a possibility of Italy either reverting to the lira or (more likely) using the two currencies alongside each other. The 'Northern League' in Italy has begun collecting signatures for a petition to hold a referendum to do just that.

If they can get 500,000 signatures then the government must hold a referendum and the likely result would be in favour of the lira.

Discontent with the euro within the power circles in europe probably has to do more with politicians playing on people's fears about the EU as well as a pathetic vote getting startegy.

To a certain extent this may be true but lots of people in the euro-zone already disliked the euro. It's more likely the politicians are getting fed up with being attacked by the electorate for their poorly performing economies while not being able to do anything about it.

Then again, there are many stories coming out about figures being fudged to allow the euro-project to happen and allow certain countries to enter it so it's their own fault really.

We can only hope that in time the various european economies will settle down, converge and find their equilibrium point. That might provide the stability europe needs for some sustained growth across the board.

Come to think about it you might be right about the Italians reverting. They are the most tempermental people in europe. Politics are so divisive in Italy it's awonder they ever get anything done. I'd bet that political bickering is worse in Italy then it is here in the US.

Don't invest in the Euro, its going to go down like the constitution , get pounds sterling thats a real currency.