is there realy any point in asking ...YOU?

Former Member · May 2003

Originally posted by Jo_is_an_Angel
Does anybody else think these "economic tests" where a bit of a waste of time? I mean say conditions matched up to them, we can't pull ourselves out of the Euro when conditions change can we?

I always thought that the economic tests were to ensure that our currency would merge successfully into the Euro. Therefore, if once we are in the Euro, conditions change, they will change for everyone. That's the theory anyway. If they don't change for everyone, you get the situation outlined above: The European Central Bank says they won't change the intrest rate as it would have a negative effect on the rest of Europe, therefore the UK ends up either with deflation or out of control inflation.

Former Member · May 2003

I think you will find that European economies are reasonably harmonised and are likely to become more so.

Inflation can still be controlled directly for that nation by fiscal measures and will also be easier to control because the pressures of exchange rates will be far reduced (exchange rate fluctuations with your main trading partners being one of the main causes of inflation)

Also the Central Bank interest rate is till only a guideline and there is still room for regional fluctuations.

There are also huge trade benfits to be had that will increase stability and the wealth of the nations.

There are issues with harmonisation and monetary strucutures but these can be resolved, i think the benfits are worth it......

Former Member · May 2003

A couple of years is hardly enough time to judge whether something has been a success or not.

Former Member · May 2003

Originally posted by Toadborg
I think you will find that European economies are reasonably harmonised and are likely to become more so.

Inflation can still be controlled directly for that nation by fiscal measures and will also be easier to control because the pressures of exchange rates will be far reduced (exchange rate fluctuations with your main trading partners being one of the main causes of inflation)

Also the Central Bank interest rate is till only a guideline and there is still room for regional fluctuations.

There are also huge trade benfits to be had that will increase stability and the wealth of the nations.

There are issues with harmonisation and monetary strucutures but these can be resolved, i think the benfits are worth it......

Fiscal policies are Not good, you seen the uproar over what Bush is trying to do? They are fiscal policies. It wont be easier it will be harder!

Also the Central Bank interest rate is till only a guideline and there is still room for regional fluctuations.

Which central bank?
The BofE has a target inflation rate the ECB interest rate is one size fits all not guideline?

Former Member · May 2003

Originally posted by Toadborg
I think you will find that European economies are reasonably harmonised and are likely to become more so.

I'd be suprised if they wern't, since they're all on the same currency. :rolleyes:

Inflation can still be controlled directly for that nation by fiscal measures and will also be easier to control because the pressures of exchange rates will be far reduced (exchange rate fluctuations with your main trading partners being one of the main causes of inflation)

Yes, but should some national financial crisis occur that has little effect on the rest of Europe, we'd be up a certain creek without a paddle.

Also the Central Bank interest rate is till only a guideline and there is still room for regional fluctuations.

That's like saying the Bank of England interest rate is only a guidline. It's technically true, other banks don't have to follow it, but if they don't, then they lose out to their competitors. And the fluctuations part, that's like saying if I go to London, I'll get a better intrest rate than if I stay up North.

There are also huge trade benfits to be had that will increase stability and the wealth of the nations.
There are issues with harmonisation and monetary strucutures but these can be resolved, i think the benfits are worth it......

But you need to weigh the benifits with the risks.

*edited 'cos I thought you'd appreciate good spelling

Former Member · May 2003

Originally posted by Jacqueline the Ripper
I know.
Just thought it as funny that you use the term philistine as I've never ran into anyone who knew that before

sorry... over touchy...

Former Member · May 2003

One thing to remember is that not even all the states in the US are homogenous economically, but that hasnt prevented the dollar from not only surviving quite well through many a turbulent time but also becoming the major international currency standard.

We also have one central bank setting interest rates for all states and yet none have disintegrated however bad the economic situation has been. What is required is economic assistance from the center when an individual economy is in crisis.

Also too consider that in a unified Europe, as in a unified US disparities can be an asset to flagging economies insofar as inward corporate investment flows to areas of recession due to cheaper cost and plentiful labour supply. Erecting barriers only adds to the cost of cross border trade and leads to eventual migration of corporate investment away from a particular national economy without corresponding new inward investment.

Thus in my estimation, to slam the Euro for disaprities amongst member states economies is begging the issue frankly.

I would suggest reading Kenichi Omae's book " The Borderless World". If one book could confirm my opposition to the notion of the nation state and its bureaucratic barriers, it was this one.

Former Member · May 2003

Well said Clan, the success of the US economy is an excellent example of how a large, economically disparate region can be highly successful with a single central authority.

DB: What fiscal policies are you reffering to? Automatic tax and welfare stabilisers are very effective at controlling the economy and can aso be effectively targeted regionally.

The European central bank sets an interest rate for last resort borrowing, bonds etc. but I would be very suprised if the average current account interest rates in Greece were the same as those in Ireland for example, there are other factors at work.

Me and: What kind of national crisis are you thinking of that would only effect Britian substantially?

I agree that there are costs and benefits but I think the benefits outweigh the costs economically and I also agree with it politically but that is another issue.

Former Member · May 2003

Originally posted by Balddog
IMO, 'uniting' europe under one currency system will make war in europe more likely in the future.

how on earth do you think any single country within the union and having the same currency could possibly find the funding and other recourses to fight against another? with a european defence force being inevitable and the joint commands that will have to be put in place ...impossible! how the hell could california launch a military attack on new york state?

Former Member · May 2003

Who said anything about within the union?

Id love to be as optomistic as you lot in thinking that all war has ended in europe and that we will all live happily ever after together...but I dont.

I have very little faith in mankind, especially us europeans.

I believe that the euro will lead to serious economic problems, that coupled with the collapse of the EU will lead to war...

Just my cynical view of things im afraid.

Former Member · May 2003

Despite the turbulence BD, I wouldnt worry too much about the EU collapsing. Political infighting is just the consequence of any transnational political grouping including ASEAN and NAFTA. It's just part of the cycle of struggling toward greater commonality and mutual understanding between governments, nations, and individuals.

You find just as much squabbling and egocentricity in normal bilateral arrangements but yet the world can no longer function without either.

I nevertheless do understand cynicism, I have a belly full of it myself!

Former Member · May 2003

What economic problems do you think will result Baldy?

I also am of the opinion that at least within the short to medium term there is very little chance of a European war. The consequences for the nations would make it utterly irrational.......

Former Member · May 2003

Originally posted by Toadborg
I also am of the opinion that at least within the short to medium term there is very little chance of a European war. The consequences for the nations would make it utterly irrational.......

not that that has ever stopped them before toad!

yes i know i'm bringing it up again but at the end of the day do any of you see any point in a referendum?
considering most people have not got a clue about the pros and cons. your average bricklayer, truck driver, shop keeper is being asked to make a choice about something they have no ureal understanding of.
i'll put money on it that this referendum proves to have the lowest turnout in history, simply because few will want to make such an illinformed judgement.

Former Member · May 2003

Originally posted by Toadborg
Me and: What kind of national crisis are you thinking of that would only effect Britian substantially?

Anything that would cause a loss of confidence in the UK stock market, for example. I dunno. The entire royal family being assasinated. Although that would probably have a worse effect on the foreign tourist industry.

Former Member · May 2003

Mmmmmmmmm, not a very good example I must say....:p

M.Roll I agree that few people understand the economics, some might say only people in the treasury do (deliberately I suspect) that is why it is going to be a political decision, i am sure that many people would vote against the Euro if it could be proved it will make them better off and vice versa........

There needs to be a better debate, too many lies and myths are flying about, mainly from the right-wing press..........

Former Member · May 2003

Toady, one criticism ive had about the EU information offices in the UK is that they dont do enough to get the word out to the public about the various goings on in Brussels. Too much is left up to the biases of the various news media in the UK.

I remember back in the early to mid 90's when i was in the Parliament working with a Brit MEP (constituency was Beds South, a portion of Herts. and Milton Keynes) we were constantly on to Queen Anne's gate to push out the info to constituents so they might have a more informed view at the very least. As it is, I dont think any UK gov to date has encouraged the public to even know about the EU info centres, nor has any gov backed the efforts of those centres to get a wider distribution to the general public.

One of the great stumbling blocks to improving understanding. Sad really cause the resource is there, simply under utilised.

Former Member · May 2003

I agree. All the tabloids report is various 'Brussels directives' normally petty ones that people view as being counterproductive with no background on how the decision was made or what its aims are, what programme it is part of etc. It is simply promoted as a group of unelected bureaucrats making up ridiculous rules for no reason, disgraceful.............

Former Member · May 2003

Since many of the countries in the EU, France, Germany, export more to the US than they import, I'm surprised that they aren't lowering interest rates in an attempt to make the Euro worth less. Is the reason because in order to attract the UK they want to present it like the most popular currancy? Will the continued rise in the Euro cost jobs or will they be made up for elsewhere? And finally, it seems now it's at the point that the more the Euro goes up...the more stock in European headquartered multi-nationals goes down. Examples: Chrysler and Volkswagon.

Former Member · May 2003

Actually Chrysler's HQ remains in the US. It is owned by Daimler Benz but it retains its own US based HQ.

Once again, I would caution you not to rate economies based on the volatility of the stock market, it has a life all its own and often fluctuates according to the most absurb causal factors.

Former Member · May 2003

we're agreed then ...it's a waste of time asking the general public? hic.

Former Member · May 2003

Ohhh, I feel so ignorant. I neeeeeeeeeeeeed to read up on this issue, but haven't. I will do once I finish these exams.

In short - It's money - who cares? Money is the root of all evil, not girls as once stipulated.

is there realy any point in asking ...YOU?

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