Why the Euro failed

Post by riskneutral » Mon, Oct 29, 2018, 11:51 AM UTC

zeristor wrote: post #17

jajag wrote: post #5

Earlier quoted context omitted.

The Euro has failed to generate the promised economic growth. Average GDP growth for the Eurozone since the Euro's adoption is a bit above 20%. The UK has managed double that since it opted to stay out, and other non-Eurozone EU members have done even better. As addressed in the article, the Euro has also failed to promote closer political unity - see what happened during the Greek crises, or what is happening curren…

Wasn't this mostly down to pound plummeting in value. The UK can devalue its currency every time it needs a GDP growth spurt. Just like Italy used to do.

I think that’s the point.

Post by chronid » Mon, Oct 29, 2018, 4:05 PM UTC

nopriorarrests wrote: post #9

Theodores wrote: post #7

There is some baby and bathwater going on here. An assumption that everything to do with the Euro is bad and an assumption that everything bad is to do with the Euro. For some people in Europe the Euro was a bit like when decimalisation happened in the UK - suddenly everything in every shop was marked up to be that bit more expensive. But people got over that, much like how people got over decimalisation in the UK, n…

>In the pre-Euro days it was a regular thing to read stories about how places like Italy had shaved a few zeroes off their Lira due to hyperinflation. >We don't have those stories now. I think the Euro has something to do with that. Yes, but it's not like Italian budget magically turned to proficit because of euro adoption. It still contains deficit, the one which EU is not happy about, and they are currently fightin…

Well, I see forcing member states to be fiscally responsible (Italy's current expenditures - after removing debt/interest repayments - are curiously forever increasing even under the worst "austerity") something a union should do. The problem is the Euro is not enough to do so.

Devaluation won't fix Italy's problems in the long term, it just shifts them into the future. The devaluations of the lira in the last ~30 years of the last century and the flattening economic growth in the '90s are there to prove it. You cannot keep drugging your economy forever, you'll pay for it in the end.

Re: Why the Euro failed

Re: Why the Euro failed