The Euro 1162
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."
Simple question.. (Score:2, Interesting)
Picture of bills with US bill (Score:5, Interesting)
Picture of a 5 Euro bill, 10 Euro bill, 1 Euro coin [fhsu.edu]
They are pretty cool looking.
One simple reason why it won't work: (Score:1, Interesting)
Unless people can freely move to where the jobs are, all Euro-using countries will start to look like Argentina in 10 years.
Are we becoming like star trek? (Score:3, Interesting)
I think in the next 20 years as trade zones evolve we will see the union of trade zones until there is true free world trade. Then in our lifetimes we may see the start of a common world government.
Re:One simple reason why it won't work: (Score:2, Interesting)
I hope it works! (Score:1, Interesting)
Different versions of the Euro... (Score:3, Interesting)
Also, an interesting note, is that the EU states will still need to produce their own stamps but put them in the EURO currency pricing, which will be nice for collectors and more autonomy.
FYI, I was over in Germany for three weeks and spoke to a couple of folks about how they viewed the EURO. Alot of the older folks were worried about how non-assest items will be valued. For example, appraisals. Something that use to be appraised for 5.500 DM, will it be assessed at 2,811 EUROS come a couple months down the road?
Congrats to the Brits (Score:1, Interesting)
Until the EU can get the Euro some value, the Brits are much better off using Sterling for a few more years.
Re:One simple reason why it won't work: (Score:5, Interesting)
One of the advantages that Europe has is that language and culture maintain national entities in such a way as to resist the "winner take all" scenario, in which all the educated professionals move to a tiny handful of economic supercenters. Economic growth can be distributed geographically more in Europe, but it has nothing to do with any restrictions on travel.
One of the ironies of economic popular wisdom in the 90's is apparent by the fact that Brazil, with its protectionist policies, is doing reasonably well, while Argentina, which did almost everything the IMF and the US banking establishment told it to it, is about to go toes-up. The Argentine disaster could spell the end of WTO-styled globalism far more than the protests of Seattle etc. ever could
Issues with the euro in day-to-day life (Score:5, Interesting)
Well, being one of the 300 million affected, I just thought that I could karma whore a little and get an "informative" mod by telling you (the non-european or non-affected-even-if-european people) a few issues that arise in real life with this change :-) Let's hope not to be another of a million messages about this O:-)
There's more, but I don't recall anything specially interesting now, so let's hope that another one with a better english and memory can say something more fulfilling ;-)
Coming from a store owner... (Score:3, Interesting)
- The Euro costs us £0.50 to exchange for every transaction made. That's right, the banks charge us to convert our money back into pounds! They don't charge at the consumer level, just merchant to merchant, so we mandate consumers do this on their own, or pay via another means.
- The new anti-counterfeit measures contained in the Euro. This may seem like a good thing, but the larger Euro demoniations contain coils electromagnetically charged to a certain serial number. This can thus be tracked, and as much as consumers are worried about their privacy, merchants are worried about ours in respect to competitors.
- The attitude here in London is mostly anti-Euro, as Brits object to this new prospect of a continental government. We've been independent for this long, and under no means do we want to be governed by someone higher than the Parliament
- The conversion rates fluctuate constantly. What's to say that one day, we charge 500 for a gold ring, and then going to the bank to exchange it, it's then worth 90% of that? That's lost money to us. We can't afford to be dealing in currency fluctuations. Both the pound and the US Dollar are stable enough to be dealing with, but I won't put my corporation's trust into the Euro.
Businesses like mine are doing the same thing. I can't find a single business here in London Square willing to redeem Euros for face value. So, when you come to London, be sure to bring your plastic, or redeem it for pounds.-snellac
Re:Picture of bills with US bill (Score:4, Interesting)
I really, really hope for you that your country never switches currencies. These past 2 years, and especially the last couple of months have been hell, putting a lot of effort in adapting some real old software packages to a different currency, converting millions of records to the new values, dealing with rounding errors, and trying to find out where critical errors may come up.
The economy will not be affected very much imho, but for us IT people it has not been fun.
btw, you were right. That did it indeed
Cash machine problems (Score:4, Interesting)
Then I tried the recharging stations for the (chipcard based) debit card called "Chipknip" (similar to Proton in Belgium and Geldkarte in Germany). Two out of three malfunctioning.
Now, these chipcards are not used very much by the general public. But the thing is, banks have promoted it a lot lately, because it would make the transition easier. The banks should have done a better job if they are really serious about this.
Also, I have a device which I can use to recharge my chipcard at home. I connect it to a phone line and then it makes a connection with the bank.
I noticed that from now on I can recharge it with 25 euro as a minimum. Previously the minimum was about 10 euro. I wished they had maintained that minimum amount.
Re:Xenophobia and pig headedness ? (Score:2, Interesting)
So maybe this with the Brits sitting it out may be a funny thing. But eventually things will be different. Until then the EU would do well to listen more often to the Brits...
Re:Coming from a store owner... (Score:5, Interesting)
This is such a short sighted view point. Only through cooperation can European countries have a say in world affairs, the UK, a country of about 60 million people, will be ignored in the face of trading blocks of 300 million people and upwards.
Sooner or later, the UK will come crawling into the Euro with its tail between its legs, and feeling rather stupid.
The Euro is here, i can feel it in my wallet. (Score:1, Interesting)
For the last couple of months all prices in supermarkets and all point of sale have been double priced. The prices had to be displayed in the normal currency and the Euro. This was done so the normal people could check to see that the price conversion was made correctly.
The idea was that prices would remain the same. Yehhh, right.
In the last couple of months general prices in the Netherlands were raised bij 15%. Almost all price conversions were made so that the new Euro price was a nice and round figure. 2,95 EURO in stead of 2,72 Euro for example.
These things are the things i have been fearing of. And these fears came through. Not to think of the drop of value of the Euro compaired to the Dollar. The euro was to become a strong currency. But since its introduction in the financial sector a year ago it droped from about $1,20 to $0,85. Now that it is introduced into the general public we will have to see if this value will hold.
The coming of the Euro has been feared by me and others. Im saddend that it has arrived. Not only because of the raised prices that had nothing to do with the normal inflation but also because we have to say farewell to our dutch banknotes and coins.
The Euro is here, and now i always have to use the same currency as the french. And i hate the french.
Re:Coming from a store owner... (Score:3, Interesting)
The only way I can see someone tracking you via a Euro is this: you go to an ATM to withdraw money. The bank knows you and can read the Euro as it is dispensed. You spend the bill. Assuming the merchant deposits all cash to their bank, the bank could resolve the bill from the merchant to the bill dispensed from the ATM assuming it is the same bank or banks share info. This is only likely for large denominations since smaller ones may be tendered as change. Once changed hands, any tracking data is bogus unless the merchant themselves are tracking the euros coming in and going out.
Every US bill has a serial number too, just not magnetically encoded. It would be quite easy to build a box that scans in US bills and reads the serial number. I believe cash is still the best anonymous tender. Magnetic encoding doesn't change anything.
Just food for thought.
-tim
Re:Cash movements (Score:5, Interesting)
I can provide some data from a loosely analogous situation in the United States. US bills are printed at 12 locations in the US, and are originally distributed to banks based on which of the 12 districts that bank is located in.
I'm part of a fun project [wheresgeorge.com]that involves tracking the motion of US currency. I live near (60 miles from) San Francisco--here are the locations the bills I've marked come from, and their relative proportion.
San Francisco 776 32.0%
Kansas City 323 13.3%
New York 205 8.5%
Dallas 187 7.7%
Minneapolis 182 7.5%
Chicago 146 6.0%
Atlanta 133 5.5%
St. Louis 129 5.3%
Cleveland 99 4.1%
Boston 97 4.0%
Richmond 82 3.4%
Philadelphia 63 2.6%
Now, while the banks print out different numbers of bills and such, it's pretty clear that the San Francisco printed bills dominate my sample.
This analogy is unlike the situation with Euro coins for at least one reason--the lifetime of bills is much shorter than the lifetime of coins. Bills tend to last a year or two in circulation, coins for a decade or more. So, as time goes on, I'd expect mixing to be a much larger effect for coins in the EU than it is for bills in the US...
Re:The real reason the Euro is BAD NEWS (Score:1, Interesting)
When will you nationalists finally get it. There is no "other nation" in a united Europe. Hopefully we'll get rid of the national borders and governments as soon as possible too.
Re:The real reason the Euro is BAD NEWS (Score:1, Interesting)
You are wrong. The German Govt. is not elected by the Irish population, and it is the German population which controls the new money, therefore, the German people control, unilaterally, the economy of all the other EU nations.
This is a fact.
Any of the EU nations can "derrogate" from EU laws, including the human rights legislation. The statement that the european nations are connected and in some way equal is a fallacy.
The Euro is an undemocratic currency. Period.
Re:Simple question.. (Score:2, Interesting)
* sustainable convergence between Britain and the economies of a single currency;
* whether there is sufficient flexibility to cope with economic change;
* the effect on investment;
* the impact on our financial services industry;
and
* whether it is good for employment.
Some comentators have suggested that these conditions are so vague that it would be easy to claim we have met them, or haven't as required. Unfortunately I don't understand the economics enough.
What I will say though, is as a Director of UK software company that exports to Europe, and as a frequent traveller to Europe, the quicker we get the Euro the better.
Re:Picture of bills with US bill (Score:3, Interesting)
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.
Ecuador adopted the U.S. dollar as its national currency in March, 2000, and now, according to the Economist [economist.com], "Ecuador is now Latin America's fastest-growing economy, its GDP set to expand by over 5% this year. Much of the social unrest of recent years has died down."
When a country can't control its own monetary policy, it is more likely a symptom of a serious problem, not a cause.
Re:Picture of bills with US bill (Score:2, Interesting)
There are two common fallacies about sharing currencies between countries:
(1) It is necessary to have a shared government. Monetary integration *must* lead to political integration;
(2) Entering a 'common currency' is a once-and-for-all measure.
Both these can be countered by recent history.
Ireland and the UK.
Until the mid-1970s Ireland and the UK shared a currency - the British pound. This situation began with Irish independence at the beginning of the Century. Yet Ireland was not subsumed inside some British super-state. Ireland's independence as a country was never in doubt.
Ireland decided to go its own monetary way following the start of the 'troubles' in Northern Ireland. The Irish government made the, no doubt politically correct, decision that breaking from a currency agreement with a country responsible for 'Bloody Sunday' when tens of Catholic (Northern) Irish citizens were killed would not harm its electoral chances.
If anything, Ireland and the UK had less interlinked economies than most of the Eurozone (cf the figures for Ireland's exports as a % of GDP in the 1970s, esp. pre its entry into the EU - then the EEC.) Add in the almost complete lack of Ireland/UK trade resolution agreements - don't forget that one of Ireland's two major political parties was against the partion of Ireland - and it becomes clear that there is no reason why countries cannot share a currency without sharing a government.
Belgium and Luxembourg:
OK, they're both small. But the point remains.
France and the 'Convertible Franc':
Interesting one this, and one which I don't know as much as I should. (Reminder, read books on the subject.) France's ex-colonial 'possesions' in Africa share/shared with their previous overlord, a semi-convertible currency, even as 'colonial ties' were being increasinly relaxed. No greater disparity between the (predominantly) African economies of the former colonies and their erstwhile masters can be imagined. Yet, these countries regarded the convertible franc as the one beneficial legacy of colonialism.
I don't know how this has changed since the 'creation' of the Euro. Nor can I point to any noted economic successes in Africa. (Although, I would say - largely without any hard evidence - they have done no worse than peers.) So, it is not necessarily a great example.
BUT - they do go some way to demonstrate that a 'sovreign federal' body is hardly a necessity to a working currency.
Re:Simple question.. (Score:4, Interesting)
Actually the election was far more finely balanced. The Tories benefitted from an unexpectedly high turnout which was largely due to the weather, it was the first fine day of spring. The margin was very narrow, less than 2000 votes in 20 seats. In fact had the 50 seats with the smallest majorities gone 50:50 to Tory/Labour then Labour would have won narrowly.
The voter perception of Labour policy was largely fuelled by the Murdoch press. What Major offered was a Conservative government minus Thatcher. The mistake the Labour party had made was that by daemonising Thatcher they allowed the Tories to get re-elected simply by putting a new face at the helm. The Labour policy changes from 1992 through 1997 were of presentaion, not substance.
The major change was not in the Labour party but in the Conservatives. Racked with open internal warfare few of the cabinet made any attempt to conceal their contempt for their party leader. The numerous corruption scandals, starting with sex and ending with peculation and perjury erased any remaining vesigest of respect for the party.
The main similarity between 1992 and 2000 is the extent to which a viciously partisan press tipped the balance in favour of the right. Bush was consistently praised despite his obvious deficiencies while every opportunity was taken to attack Gore. So Bush got a bye for lying about driving while drunk while Gore was called a liar for mistakenly saying he visited Texas with the head of FEMA when it was the deputy head, he having visited 19 other states with the head one might think it an innocent mistake. The list goes on.
The relevance to the Euro is that but for the campaign against it in the Murdoch press it is unlikely that UK opposition would be anything like as great.
We will see if the end result is the same, before 9/11 that looked very likely. The ecconomy was in recession, the administration had lost control of the Senate due to crass political judgement, the California energy crisis caused by blatant market manipulation by Bush's texas cronies at Enron. Of course the hil Bush now needs to climb is that the press loves nothing better than making history repeat. So just as the Clinton years were spent trying to repeat Watergate, the press will now be trying to tie Bush II to the script of Bush I.
Re:Advantages of a single currency (or not!) (Score:3, Interesting)
And Yes, that does mean 'asymetrical shocks' can be more easily absorbed than in Europe.
But that does not mean an Indiana steelworker can easily become a networking expert. (Or, in the current environment, the opposite.)
Even inside countries, people are surprisingly unlikely to move. How else can you explain the persistently high unemployment rates in some parts of the US? The statistics tell a story: very few people change 'region' in the US during their lifetime. And an even smaller proportion change for economic, as opposed to life-style, family or educational reasons.
And at the 'high end' of the emplyment spectrum - by which I mean skilled professionals - locational mobility is increasingly becoming the rule rather than the exception. Find the major investment bank in London where 'brits' make up the majority of senior positions.
I am uncovinced by cultural arguments: I know many Scottish nationalists working in London; many opposed to further European integration find themselves working on computing contracts in Brussels, Frankfurt or Paris.
I could well be wrong, but the evidence does not yet point clearly to either (a) labour mobility being *that* important or (b) people being *much* more unwilling to move - at least temptoraily - around Europe than around the US.
Re:Coming from a store owner... (Score:3, Interesting)
They are not likely to list prices in Euro however, since the SEK<->EUR exchange rate is not fixated and the list prices would have to be changed almost every day, which of course would be impractical. But payment in the converted Euro amount will be entirely OK. A lot of smaller shops are expected to follow this policy, used by the bigger ones, and allow payment in Euro.
Re:Euro symbol in HTML (Score:2, Interesting)
Re:Complete image collection at official Euro site (Score:2, Interesting)
Re:When the rest of the world switch to the Euro ? (Score:2, Interesting)
Well actually it would make sense.
Unlike the dollar, the euro is constructed as a multi-state currency, and many thirld world countries that have dollarized their economies, but still make more business with Europe than they do with the US, might adopt the euro, or the peggind of their currency to the euro. Do you imagine the Fed and the US government concerting their monetary policy to take into account the interests of Brasil and Argentina ? I don't, but I can imagine the ECB letting them in, as a partnership with spain and portugal for example.
Re:Advantages of a single currency (or not!) (Score:2, Interesting)
I just wanted to add something here. While your post is excellent, there have been several arguments made from some very prominent economist (cf. Jane Jacobs [amazon.com] or John Kenneth Galbraith [amazon.com]) over the years that this is precisely the reason for the rather large difference in economic development between various regions in the US.
I could write for hours on this topic, but I don't have time. Suffice it to say that it is their opinion that the US should not have a single currency. In fact it would be much better for all if each state had their own currency to reflect the economic reality that exist in each state. This idea is not a new one, but I don't know why it is never taught. Though out most of European history, it was very common for each city to have its own currency and they seemed to manage well enough. Anyway check out the above books if you're interested. Check out the reviews as well. Talk about differing points of view.
For what it's worth, I think the ECB is nuts creating a single currency. France and Germany will benefit well enough, but Greece, Spain and Portugal are going to get screwed. They well become simple supply regions for central Europe; industrialization will stop or be significantly reduce, just like in Mississippi or Tennessee.
Re:Advantages of a single currency (or not!) (Score:3, Interesting)
The difference is that European nations have existed for a long time, in some form or other. Whereas the states of the USA are mainly creations for their own sake. Most of the borders between US states are simply lines drawn on a map with no reference to geographical features in the area. Very few of the US states have ever been nation states.
I'm not convinced about the common language and culture. In the West and South West of the US the echo of the Hispanic empire is quite apparent. Also there are plenty of distinct ethnic groups, who are often refered to as X-Americans where X is some other part of the world. However there is still the lack of identity with specific US states.
The rationale for a common currency (Score:2, Interesting)
The political goals behind the Euro are, of course, the often-cited "ever closer union". Many people think that a "United States of Europe" model, much along the lines of the USA, would be a good thing. Such a development goes hand in hand with tearing down the barriers for commerce, travel, cultural exchange and relocation of people and businesses. The whole EU Common Market project has been doing this explicitly for the last 6 years, and implicitly since the eighties. There are many arguments for and against such a European Federations, the most vocal opponents cite nationalism or the loss of local governance/influence, whilst the advocates usually talk about economic benefits, European identity and the need for transnational coordination to tackle global environmental issues etc.
The economic goals are basically to remove wasteful practices and increase productivity through increased competition and specialization. To deal with those individually:
Wasteful practices: A lot of resources in Europe are used for tackling currency translations of different sorts, ranging from exchange bureaus to expensive accounting consultants and accounting software development. This might sound marginal, and it is indeed way beyond one percent of GDP, but when applied to economies of this size it still adds up to triple-digit billions (Euro or US, take your pick). There is also a lot of (costly) risk taking will be removed.
Increased competition: Especially in the smaller countries, local markets can be so small that they don't support enough suppliers (or buyers) to ensure good competition. This leads to monopolistic behavior, and hurts the economies in terms of lost production and mis-allocation of production resources. By removing barriers to cross-border tenders, competition (and thereby efficiency) is increased.
Specialization: Because the Germans are better at making cars than the Swiss, while the Swiss are better at making cheese, it makes sense if the Swiss make cheese for the Germans and the Germans make cars for the Swiss. This is called specialization, and occurs within economies as well as between them (in fact, specialization is the main reason why e.g. currency, the corporation and industrialization have been so important for the economic development in our history). Specialization between economies is realized through trade, which will be facilitated by the common currency.
The cons: The economic cons are well-known, but hard to quantify. Basically, the main problem is that with a common currency comes (by definition) a common monetary policy. Monetary policy needs to be adjusted to the business cycle. The cost of the common currency will be incurred when different policies are needed in different parts of the EU, e.g. if boom in Ireland requires a contractionary policy (high interest rates) while recession in Germany requires stimulation (low interest rates). This has been experienced by the US, when Chicago (car industry) was in recession while California (high-tech etc.) was booming, and the Fed had no way to respond to this situation.
The gravity of this problem is determined by how different the business cycle is within the common currency region, which again is determined by the mobility of resources (notably including labor resources). It is widely accepted that European workers are, at least at present, less likely to move to other countries than Americans are to move to other states. Therefore, this problem is likely to be bigger in Europe than in the US. Whether this will eat up all the economic benefits is not predictable with present analytic tools, and only time will show. Most economists seem to be in favor of the Euro, though.
pk
Re:Different countries... (Score:2, Interesting)