This. I am amazed the Euro hasn't dropped at a more rapid pace given the current outlook on things. On the flipside, makes you wonder if that is only because the market has fluctuated so much recently.
This. I am amazed the Euro hasn't dropped at a more rapid pace given the current outlook on things. On the flipside, makes you wonder if that is only because the market has fluctuated so much recently.
The turmoil continues for Europe as the Euro continues to take a hit even with Germany acting hard to increase confidence in the system and currency by pushing through the finalizations on the rescue plan as well as committing to budget cuts, even within Germany.
Things are looking worse than ever at this point, with some analysts even questioning whether the Euro will be able to last. Quite a surprising turn of events, but I can't say I am too surprised considering the way some of those countries have been spending in recent years.
Things are looking worse than ever at this point, with some analysts even questioning whether the Euro will be able to last. Quite a surprising turn of events, but I can't say I am too surprised considering the way some of those countries have been spending in recent years.
The European Union is a fairly good idea that was ruined through poor planning. It did not suddenly arise from nowhere but is the successor to previous unions starting with the ECSC (European Coal and Steel Community) That was succeeded by the EEC (European Economic Community and then the EC (European Community). These successive communities were supposed to be supranational communities of basic equals. The mistake the European Union made was in wanting to be too inclusive. As long as it was confined to the industrialized nations of north Europe it worked rather well. The member nations, while not exactly equal were at least close. Once the European Union began admitting the economically weaker, mainly agricultural regions of south Europe they were in trouble. Having a unified currency meant that these weaker nations could not devalue their currency in response to economic problems. It also meant that some of them actually lied about their economic situation in order to gain membership. This disparity in the economic strength of the various nations is the main cause of the EU's present problems. The PIIGS are dragging down the Euro and with it the European Union. The Germans will not be willing to pay higher taxes in order to bail out their neighbors forever and when they finally say, "Genug", there will be nothing to do but cut some of the nations loose and expel them from the EU. I can see Portugal, Greece and Spain leaving the EU. Italy and Ireland may have a better chance of staying in the Union.
There is no doubt that some of the Eastern European nations and other small nations that joined the EU have put a tremendous burden on the currency and the union. While certain aspects may have been beneficial to the original nations, I still don't see it as a good idea. I think trade agreements among those nations instead of a union that included a governing body (even if that body needed the countries' leaders or people to vote) would have been in the better interest of the European people and their economy.
I really don't like the policies that are being implemented by the EU. I don't think this is going the right way, there are a lot of disadvantages to these moves!
If it did drop in value, it would be good for Germany and problematic for most others that depend mainly on the internal market. The reason the Euro was valued so high was for a number of reasons, chief among them to stimulate the economy of the Eastern bloc through the internal market and also due to France's large agricultural industry. If the UK had joined the Euro, it would be even higher value.
My point is that value is kept relatively stable for good economic reasons. Germany and France, the two largest economies, have very different bases. The EU is effectively an economic detriment to Germany. This is why the Deutschmark was valued at a third of the Euro - it is an exporting economy.
This arrangement, however, is best for the continued objective economic success of the Eurozone region.
Similar threads
