The Life And Times Of The Euro

Before I left, a wise and informed friend did question the logic in my leaving Mexico for the UK. He understands economics. He could see the way the wind was blowing. To be fair, the economic winds of ‘no spare’ change were already blowing pretty hard across Europe, and had been for a while. I didn’t disbelieve him. Nor was it simply a matter of ignoring him. I got his point. But we weren’t going to the UK just for financial betterment. Although improving our economic situations was something we hoped to do. Mostly, Mrs P needed to experience England.

My wise friend suggested we wait. The length of time we should wait wasn’t specified, but I did suspect (and may have responded) that the wait would possibly be a very long one. Years. Maybe decades. Now would probably be as good a time as any to go. Things might well get worse the longer we waited. I may have been right. Europe stands on the abyss. The common currency dream has turned into a nightmare.

I confess, I was – once upon a time – pro Euro. Although, like many things, I didn’t stand with both feet in any one camp. Single currencies haven’t historically fared very well in divided economies. The Scandinavians know that from experience. Perhaps it’s not ironic that Scandinavia kept clear of this one. The Euro was done in a half-baked way. That the UK stayed out isn’t is all likelihood going to help us much. I was pro Euro, but more in principle than is support of the coin that was eventually minted.

It’s crunch time though. Will the Euro survive? There seems to be growing doubt that it will, according to ‘experts’. I use apostrophes, which suggests I question their expertise – but there’s no arguing that there’s a large number of them. Those in power, namely Merkel and Sarkosy seem hell bent on proving them wrong however. And if the Euro goes, then what then? I suspect now might be a good time to actually buy Euros. There’d likely be an increase in value in its death throes. And will Mexico fare much better in the global catastrophe than will be caused by the implosion of the Euro? I’m interested in peoples views. Or you can just vote.

7 thoughts on “The Life And Times Of The Euro

  1. I have to admit that I have kept my head in the sand somewhat with this whole Euro thing. I do suspect its imminent collapse but I am a bit too scared to imagine a Europe without it. Without the Euro, would the EU collapse? Without the EU, countries like Serbia and Kosovo will have no more reason to play nicely together.

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    1. I really don’t think that the death of the Euro, if that occurs, will lead to the split up of the European Union. The EU, and its predecessors’, worked just fine for a long time before the Euro currency came into existence.

      The fabric of the EU will continue to change though, I’m sure. That’s natural, given the relatively young age of the organisation. It’s far from being a mature entity.

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  2. The problem is that Europe is a political confederation running a federalist system of money. There are many states in the US that are in fact busted but are not in default because of the federal political system. I do not think the Euro is in that bad of shape, it floats like any “real” currency and its value has held up well through this fandango. The Germans are not very happy with the idea of “their” money being kicked around but it trades way too high for a healthy Europe so I would guess it’s going to get kicked down the street a bit before it pulls it self out of the gutter. The Greeks lied about their spending to get into the Euro and everyone looked the other way, the lies have to be accounted for and stopped, more federalism is coming to Europe and it will be a good thing.

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    1. Your first two sentences – I agree. California, as I understand it, is your Greece. In the context of this post, anyway. Otherwise, it’s very different, of course.

      Whether the Euro is in good shape or not is debatable. It’s only as strong as the political foundation it’s built upon, and that is definitely being stressed at the moment. Greater federalism is what’s needed if the euro is to survive, but there is considerable resistance to that. The (predictable) UK veto today demonstrates that. The UK is more likely to recover lost sovereignty than cede it for the short time – although maintaining the status quo is more likely.

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      1. “California, as I understand it, is your Greece.”

        In the sense of profligacy, yes. The ratio of government taxation and spending in California seems to be unsustainable.

        However, there are many productive companies and industries based in California. California is rich. Tax a bit more, spend a bit less, and the problem’s basically solved. Easier said than done, of course, but possible. Greece, on the other hand, can’t do either: too corrupt, too few competitive industries, and so on. So I don’t think the analogy holds.

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        1. I agree about California but Rhode Island fits, fly speck in the whole picture and broke as can be. The reason no one hears about its problems is that it is part and parcel to the US federalist system. If the Greeks were dealing with a federalist government and were but a state among many they would be a sidebar in the news as Rhode Island is today.

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