The Euro project

chillidoggy

So, how long can the EU mandarins keep the patient alive? It must be in intensive care right now, surrounded by anxious relatives.

Phil_aka_Pip

So long as I don't have to pay for its healthcare or its funeral, I don't care.

VimFuego

like all fiat currency systems, it'll be kept alive for as long as we keep agreeing to take on and pay off more debt.

ICBM

It's a real shame John Major's idea of a European currency in parallel but separate from the national ones instead of replacing them wasn't adopted - it would have had the same advantages of a common currency but with a way to deal with the problems of divergent economies.

Evilmags

As Vim said. Whether that means Greece being part of it remains to be seen. If your German or Finnish then it works really well.

Basically under a Fiat system countries of floating currencies that behave with a degree of fiscal sanity have strong currencies and those that don't have week currencies. While intervention (currency controls, pegs ect) can work in the short term they create imbalances.

The Euro requires southern countries to tighten their belts and deregulate their economies or all of the euros will just flow north. Southern red tape is ridiculous. I've waited 5 months for a gas connection down to lazy, useless civil servants. Your meant to ask permission to change your kitchen. Ect ect. Germany works somewhat better, so without a currency adjustment Spain loses competitiveness.

They can't kick Greece out of the Euro without military intervention, although how it's government would function without EU cash is a moot point.

German politicians don't habitually steal millions, Spanish ones do. The idea that a strong currency over which Spanish politicians have no control is a good one in principle. The problem has been that they fiscal discipline required a massive crisis and is now provoking social rupture.

Fretwired

VimFuego said:

like all fiat currency systems, it'll be kept alive for as long as we keep agreeing to take on and pay off more debt.

This ^^ ... the Euro will survive as those in power within the EU cannot afford to let it fail.