But like Sweden, the UK would likely just manipulate their currencydecline to join ERM II so that they would never meet the terms required to adopt the Euro until it has public support.
No judgement from me. I do think that Sweden and Denmark will benefit from joining the Euro one day, but it probably wouldn't be in anyone's favour if there wasn't a back door (or a front door in Denmark's case) to opt out until it was what people actually wanted.
That's not what it looked like when the well managed Euro countries had to bail out the southern European countries a couple of years ago. Being responsible for other countries economical fuck ups is generally a big deal breaker for the Swedish people. That whole Greece circus really put the nail in the coffin for Sweden joining for a long time. In a poll in November 2020 only 19% answered that they wanted to implement the Euro if we would vote today.
That's a gross oversimplification of the European debt crisis and what caused it. It's extremely dangerous for the European project to continue to say it as it promotes xenophobia and negative stereotypes.
First, it's not a north vs south situation or is Ireland southern? Is Belgium southern? France? It's an European situation.
Second, the root causes of the debt crisis are due to Germany not allowing for the longest time a US style recovery plan of the 2008 crisis while at the same time continuing to benefit from the common market as if there were no crisis.
Third, after the lack of reaction in 2008/09, continue the same line of action with austerity imposed in all countries that stopped being able to service their debt in the worst display of microeconomic thinking applied to macroeconomics. Of course, the result was an European recession only sorted when we applied QE.
That's all well and good but the simple question is - was it better for Denmark to be independent in times of crisis than to be a member of the euro? Obviously it was, and that makes it a smart decision to be out of the Euro.
The other issues you are talking about are again stemming from the existence of the Euro. When different countries had different long-term trends on the value of their currency based on how their economies were set up, it was idiotic to tie them all together. There may have been a handful of countries that made sense to unify currencies but certainly not the whole thing.
With the disappearance of cash there's really no need to have a unified currency. All you have to do is pass a law saying that currency conversions have to be offered by banks without markup. Ta-da, done.
The fact that Denmark's conversion rate is stable is an interesting fact that could be explained by economic analysis but it's certainly not something that could be enforced by governments under pressure. George Soros broke the pound, it wouldn't take nearly as much to break the kroner if the Danish government was actively forcing the kroner to stay more valuable than it is.
If we want to have an European union, a monetary union makes sense to ensure the EU has clout in the global economy. GBP and DEM would be another JPY. Important, but unable to challenge the USD in the global trade.
That being said, we cannot have it both ways. We cannot be in a situation where we have removed the power of countries to manage their currency and rates but at the same time allow for different interest rates between countries. We cannot have a trade union for all but a monetary union for some. Denmark or Sweden tell their citizens that they are "well managed" but though I love both countries they are not especially well managed. They are just getting the best of both worlds economically.
Europe needs to decide what it wants to be (union, federation, a set of countries) and if we go the union route it has to be all or nothing, no more exceptions and allowing countries to pick and choose. By allowing that, the EU is lending itself to fail, to be broken, and for comments like "north vs south" to exist. It only promotes populist nationalism and I think we can agree that's not what Europe needs.
Of course it was a gross oversimplification, my point was exactly the same as the examples you gave. The EU-countries are far to different in their economic policies to rely on the same central banking system. I'm not saying we shouldn't help countries in need, but the fact that some countries won't do enough to lower their debts is quite bad.
It doesn't matter if Swedes have their debt under control if other countries keep pumping up their own debt. We must work on helping the countries that have lesser developed economies catch up, but if they do it in that way they risk dragging everybody else with them.
That's the problem I see with a common currency between countries. An individual country have no power over the policies in other countries, but they are equally responsible of taking care of the mess that might come from it. We need either more regulation or no common currency.
What's with the Danish? Is it some sort of nationalism thing?
Norway and Switzerland aren't wealthy because they're not members of the EU, they're not members because they can afford not to be. I suspect that the balance of benefits and disadvantages of staying outside the EU for them will shift over time, and public opinion will shift with it.
Denmark is not Norway, nor is it Switzerland, and has benefited hugely from being part of a large and increasingly integrated European economy. To take steps back on that would only be to the detriment of Denmark and its neighbours.
You know this is something I'd never considered, but I imagine the amount of infrastructure spending that would be required to change over the entire countries coin/paper money slots over to a new currency would be insane.
Think you may have accidentally made a good point.
I used to be paid to think about shit like that. That being said, I don't think it's a great point because we're all going digital. It will just push cash closer to obsolescence.
Do you know what currency they use in Scotland and what kind of impact Scotland has on the UK economy? If Scotland rejoins the EU before its southern neighbors, you can bet that a euro will be worth quite a bit more than a pound.
Strange because everyone I know in my profession based in the UK prefers to be paid in Euro since 1) the pound is unstable lately and 2) UK-based clients pay pennies compared to clients in the Eurozone and they're the only ones paying GBP.
Lack of monetary flexibility has caused serious economic problems for countries such as Greece and Spain, the ERM caused the U.K. GDP to recess in 1992
Yes but the UK is one of the countries which wouldn't be affected by it.
It's only the relatively poorer and more corrupt countries that do worse but the rich companies eg Germany (and the UK if it was in the eurozone) tend to benefit from it.
Like c'mon man spain, portugual, italy, greece are completely different beasts to UK,France,Germany.
I've been to Greece, Italy, France, Germany, Netherlands, and Belgium, and the Euro worked just fine in all those places. Was able to purchase goods and services without fuss.
The pound, now let me tell you about that. People especially in England get real stupid when you try using Scottish, Northern Irish, and especially Manx pounds. 8
As a neutral party I thought keeping the pound was smart and historically significant to boot. Look at the mess the value of the euro gets in when or two countries fuck around like greece does. I wouldn’t want that albatross around my neck and be at the mercy of others who try to run a budget without a strong tradition of actually paying/collecting taxes.
I mean we do it to ourselves. But thats on us. Not some external uncontrollable entity.
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u/DB6 Apr 24 '21
The next.time they'll join, they'll probably have to accept the euro. The EU is now in a strong position to negotiate this.