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ShadesWolf
06-03-2005, 14:26
This is not the article I was looking for but its spells out the same message.


Italian call for lira return rocks euro


SHUDDERS swept through the City today after an Italian minister said the country should consider quitting the euro and reintroducing the lira.

Welfare minister Roberto Maroni, a member of the eurosceptic Northern League party, told La Repubblica newspaper that Italy should hold a referendum to decide whether to return to the lira.


He blamed European Central Bank president Jean-Claude Trichet for being among those chiefly responsible for the 'disaster of the euro'.


The comments follow reports that top German officials have examined the possible collapse of the single currency at a secret meeting in Berlin.


The euro dived three-quarters of a cent against the dollar on Maroni's remarks before clawing back most of it.


'The Northern League are nutters,' said Julian Jessop, chief international economist at Capital Economics. 'They want to separate from Italy, let alone the eurozone.'


Mark Wall, European economist at Deutsche Bank, said: 'Europe is gripped with uncertainty.' He added that the chances of the euro breaking down are still 'incredibly small'.

Ser Clegane
06-03-2005, 14:30
Extremely unlikely that something like that is going to happen.

This looks more like a single politician trying to get some attention now that there are some people qiuestioing the EU after the votes in France and in the Netherlands.

Boohugh
06-03-2005, 14:44
Unless there is a political decision by all the Eurozone countries to get rid of the Euro, which seems unlikely, then it is unfortunately here to stay :no: .

Catiline
06-03-2005, 15:05
Nope. and it's a matter of when, not if we join. Now's not the time, but it will surely come.

A.Saturnus
06-03-2005, 15:08
'The Northern League are nutters,' said Julian Jessop, chief international economist at Capital Economics. 'They want to separate from Italy, let alone the eurozone.'

Well said. This is all a hysteria and the media helps to fuel the fire.
Yes, prices increased after introduction of the Euro. Why? Because every change in currency brings an implicit collusion with it. It's just an opportunity for the industry to raise prices all at the same time. That's the reason and not some weakness of the Euro. If Italy leaves the Eurozone, prices will rise again and not fall! In the long run, the advantages of the Euro outweight this effect.
Another claim you hear today is that the Euro helps countries like Ireland economically while it causes problems to Germany and Italy. That is true, but only becuase the Euro works as it is intended too. It's the purpose of the Euro to further competition and Ireland is simply the better competitor. Welcome to the free market! That Germany, France and Italy have now problems because they slept over important economic reforms for decades is not the fault of the Euro. In the contrary, it's a feat of the Euro to kick them in the ass, finally!

Kagemusha
06-03-2005, 15:19
I dont think that the Euro is going enywhere.I dont like all the features of EU but i think that the Monetary Union benefits us all by stabilizing the markets and keeping the in interest rate down. :bow:

Productivity
06-03-2005, 15:20
Unless there is a political decision by all the Eurozone countries to get rid of the Euro, which seems unlikely, then it is unfortunately here to stay :no: .

What is your issue with it?

CBR
06-03-2005, 15:21
I doubt it will die. But EU has experienced a lot of changes recently with the Euro and 10 new members. I think it all just needs some time for people to get used to the new Europe.


CBR

Ldvs
06-03-2005, 16:29
I doubt it will die. But EU has experienced a lot of changes recently with the Euro and 10 new members. I think it all just needs some time for people to get used to the new Europe.
We won't have enough time. Within two years, both Bulgaria and Romania will enter the EU. The Euro is, with the Pound, the only currency strong enough to compete with the Dollar. It would rather be a great loss if we went back to our former weak currencies.
What needs to be done though, is removing the CEB's independency, unless its leaders start to act decently...

CBR
06-03-2005, 16:34
After having swallowed 10 new nations I do think/hope that Romania and Bulgaria joining EU wont upset things much as its only two nations. Turkey on the other hand...


CBR

Kagemusha
06-03-2005, 17:13
I dont mean to offend anyone but i just dont think EU can include Turkey to Union in this current situation.There is too much diversity inside EU already as it is.I dont know is this an fact(correct me if im wrong).But i cant see how EU can get ever very unified when all the nations in EU are not equal in decicion making processes.If EU wants to develop it self to kind of Federal state how can bigger states have more votes than lesser countries.This only will lead to an different "camps" inside EU.My opinion is that its the only way EU to develop into an European Nation,is to fallow true principles of Repuplic and give all the "provinces" same amount of votes. :bow:

Ldvs
06-03-2005, 17:38
After having swallowed 10 new nations I do think/hope that Romania and Bulgaria joining EU wont upset things much as its only two nations. Turkey on the other hand...


CBR
Oh they can, since most of the decisions are made by unanimous assent. One annoying country is enough ~;)


My opinion is that its the only way EU to develop into an European Nation,is to fallow true principles of Repuplic and give all the "provinces" same amount of votes.
This point could be considered as... original, but you live in one of these "small countries", thus your demand is understandable, yet unfair. I will not assume things about countries I don't know, so I'll ask you a simple question.
Do your compatriots fear that Turkey will outweigh "small" countries like yours and thereby "force" them to comply with decisions you think unfair because you don't share the same culture?

thrashaholic
06-03-2005, 17:39
The trouble with Italy having the Euro is that it is so much more valuable than the lira ever was and that they have no control over its value.

At present Italy is not exporting enough and importing too much, the higher value of the Euro acts as an incentive for Italians to buy from abroad and disincentivises foreigners from buying goods from Italy. To correct this a country would devalue it's currency in relation to others, but Italy cannot (Portugal are sufferring from a similar problem). This is one of the major flaws with the single European currency. In countries with their own currency one region can support another less profittable one (for example: South England supporting Scotland), but this does not happen in the Eurozone because it is made up of several nations. One country is unwilling to fund another struggling one, as it has no incentive or obligation to do so, this results in countries like Italy, who have seen their currency jump in value, struggling and ending up with giantic trade defecits, resulting in stagnating growth and massive amounts of borrowing.

Personally I don't blame Eurozone citizens for wanting to go back to their old currencies, although the Euro is a good idea in principal, it was foolish to introduce it without some sort of framework to protect countries like Italy. The USA didn't have a single currency for quite a time into its existence; the EU are trying to create a superstate from the top down rather than the bottom up, which of course is leading to its failure.

BDC
06-03-2005, 17:46
I'm sure it would only make the situation worse...

Kagemusha
06-03-2005, 17:56
Oh they can, since most of the decisions are made by unanimous assent. One annoying country is enough ~;)


This point could be considered as... original, but you live in one of these "small countries", thus your demand is understandable, yet unfair. I will not assume things about countries I don't know, so I'll ask you a simple question.
Do your compatriots fear that Turkey will outweigh "small" countries like yours and thereby "force" them to comply with decisions you think unfair because you don't share the same culture?


No im not afraid Turkey outweighing small countries like mine.I just think that EU
is taking too many countries in too fast,and im afraid it will eventually cripple EU.I say this because when we take new countries in,especially with lower economies we must try to invest there lots of money to get them in the EU standards.
So EU needs more money and has to be taken from the "older"EU nations,by increasing the fees to EU.I think it is an good intention,but when Most of EU nations Economy encrease is almost litlle to nothing.It will lead to unhappines inside those countries.So my point here is that we have to digest what we have eaten before we can eat some moore.
About my compatriots,Finland is one of the most "Pro EU" countries in Union.This what im saying is purely my own opinion. :bow:

JAG
06-03-2005, 18:01
The Euro will not die, far from it, other countries will join the currency in the years to come.

CBR
06-03-2005, 18:19
Well I doubt 80 million Germans will consider it fair and democratic that 5 million Danes have the same number of votes as they have. I guess we small nations fear we get swallowed by the few big nations in Europe.

And I guess we are still having the Us versus Them mentality: my nation is the greatest and all others are "insert stereotype" As long as we focus on differences instead of just admitting we actually are very alike we will always have some kind of fear of our "evil and corrupt" neighbours.

I saw a journalist asking some French what they voted and why and one woman said very bluntly: I voted no as I dont want Turkey in as they are barbarians.

That might not be very fair towards the Turks but maybe that is the prevailing thought. They are muslims and a different culture (and we really dont know much about them either) so they do look a bit scary.

Of course if you look at it the other way around its actually quite interesting that they are willing to join a EU of 450 million people who belong to the western/christian culture. Maybe they are not that different from us... we just dont see it yet ~:)


CBR

Kagemusha
06-03-2005, 18:34
Just a moment a go i realiced that this discussion is going bit far from the original question
about whether the euro is going to stay.So i suggest my fellow patrons should we start a brand new thread,where we could "tear each others eyes of"in civilized manner? :bow:

Productivity
06-03-2005, 18:36
What you are proposing Kagemusha is gerrymandering by stealth.

"If EU wants to develop it self to kind of Federal state how can bigger states have more votes than lesser countries."

Same way every other democracy does it. California has more electoral college votes than Hawaii, New South Wales has more house of represantive votes than Western Australia etc. I'm failing to see what the problem is here.

A fundamental basis of democracy should be that everyone's vote is equal or near equal. I would be one who would lose out of this (dutch citizen) but I really fail to see how you can base any working democracy on anything other than one vote one value.

Kagemusha
06-03-2005, 18:46
What you are proposing Kagemusha is gerrymandering by stealth.

"If EU wants to develop it self to kind of Federal state how can bigger states have more votes than lesser countries."

Same way every other democracy does it. California has more electoral college votes than Hawaii, New South Wales has more house of represantive votes than Western Australia etc. I'm failing to see what the problem is here.

A fundamental basis of democracy should be that everyone's vote is equal or near equal. I would be one who would lose out of this (dutch citizen) but I really fail to see how you can base any working democracy on anything other than one vote one value.

I think that you have reached the main guestion inside EU.In my opinion EU is great forum for us Europeans and we can co-operate together within EU.I dont want that EU turns into giant melting pot.Where bigger Nations assimilate the litle,in the end if that happends will EU be big Germany,France or Britain? :bow:

Productivity
06-03-2005, 18:56
I think that you have reached the main guestion inside EU.In my opinion EU is great forum for us Europeans and we can co-operate together within EU.I dont want that EU turns into giant melting pot.Where bigger Nations assimilate the litle,in the end if that happends will EU be big Germany,France or Britain? :bow:

Then you're condemming Europe to a future of obscurity. A Europe with many countries, and only some semblance of cooperation will never compete internationally cet. par.

Many Americans (with good reason) love attitudes like that. It doesn't need to worry about a rival power, the citizens of Europe continuously find arguments to avoid moving themselves forwards.

CBR
06-03-2005, 18:58
Well I dont think we will be one big melting pot as we afterall have different languages. But on the other hand it would be nice if less decisions were done by nation states as they only think of themselves and thats not always good for the majority.


CBR

Kagemusha
06-03-2005, 19:02
Then you're condemming Europe to a future of obscurity. A Europe with many countries, and only some semblance of cooperation will never compete internationally cet. par.

Many Americans (with good reason) love attitudes like that. It doesn't need to worry about a rival power, the citizens of Europe continuously find arguments to avoid moving themselves forwards.

What kind of power are we talking about? :bow:

cunctator
06-03-2005, 20:24
I dont mean to offend anyone but i just dont think EU can include Turkey to Union in this current situation.

Nobody is talking about to include turkey now. Only the negotiations for membership should begin this year. realisticly turkey will nor join the EU before 2015 or even later.

Kagemusha
06-03-2005, 20:41
Nobody is talking about to include turkey now. Only the negotiations for membership should begin this year. realisticly turkey will nor join the EU before 2015 or even later.

I think,in the long run EU shoud atleast negotiate with all countries who are willing to join the Union and as i sayd before i have nothing against any country.I hope that 2015 everything is better than now,but i think there are big issues which has to be adressed before that. :bow:

doc_bean
06-03-2005, 21:06
I think the Euro is here to stay, if all this debates lowers its value, so much the better, it's too high as it is.


I think accepting so many new countries was not a good idea, i think accepting even more countries so soon is a bad idea, i think even considering letting Turkey join in its present state is a terrible idea.

We are still spending money on Italy, Ireland and other countries of the 'old' Europe, suddenly we expect them to go from receivers to contributors ? They'll surely welcome that.
I don't have anything against any of the new countries, but we simply cannot financially support a Union so large and so poor. It's a sad fact, but we should be realistic.

Kagemusha
06-03-2005, 21:08
I think the Euro is here to stay, if all this debates lowers its value, so much the better, it's too high as it is.


I think accepting so many new countries was not a good idea, i think accepting even more countries so soon is a bad idea, i think even considering letting Turkey join in its present state is a terrible idea.

We are still spending money on Italy, Ireland and other countries of the 'old' Europe, suddenly we expect them to go from receivers to contributors ? They'll surely welcome that.
I don't have anything against any of the new countries, but we simply cannot financially support a Union so large and so poor. It's a sad fact, but we should be realistic.

Well sayd,that pretty sums what i have tryed to say last few hours. :bow:

A.Saturnus
06-03-2005, 22:40
I don't have anything against any of the new countries, but we simply cannot financially support a Union so large and so poor. It's a sad fact, but we should be realistic.

I wouldn't be urprised if by 2020 Turkey is the economical powerhouse of the EU.


At present Italy is not exporting enough and importing too much, the higher value of the Euro acts as an incentive for Italians to buy from abroad and disincentivises foreigners from buying goods from Italy. To correct this a country would devalue it's currency in relation to others, but Italy cannot (Portugal are sufferring from a similar problem).

And they can't do that for a good reason, because playing with the currency that way may be a good quick measure to increase export, but it's bad in the long run. Germany had always a strict monetary policy and it's the most export oriented nation in the world. A better plan for Italy would be to produce cheaper. That way their export may have a chance against other countries.
Ask yourself, why are Ireland and Finland doing so well, with the same currency? Because the economical policy is more streamlined. Taxes are lower, there's less regulation, labour is cheaper, they invest in the right sort of industry. No, Italy has no one to blame than herself, lazyness and the stupidity of her leaders. And it's the same for Germany, France and Portugal.

Productivity
06-04-2005, 04:50
What needs to be done though, is removing the CEB's independency, unless its leaders start to act decently...

You want to make a central bank LESS autonomous? Well that's certainly an interesting point, it goes against every single paper I've read on central banks recently, and I've read a lot of them.

bmolsson
06-04-2005, 06:26
Where is Julius Ceasar when you need him......

Ldvs
06-04-2005, 13:44
You want to make a central bank LESS autonomous? Well that's certainly an interesting point, it goes against every single paper I've read on central banks recently, and I've read a lot of them.
Unlike that of the USA, for example, the European Central Bank is completely independent, meaning we're deprived of all the budgetary tools that we blatantly need now. It's supposedly independent in order to not damage its credibility, but today, only a handful still believe in its managers' skills. I'm quite certain the CEB wouldn't be discredited more than it is today if it lost its independency.

Productivity
06-04-2005, 14:15
Since when has any EU member been denied fiscal policy? Yes there are limits, but they are rarely obeyed it seems, and even if they were, this hardly amounts to you being deprived of all budgetary tools.

And the US, Au etc. all have an independent central bank to control monetary policy, just like the EU.

Ldvs
06-04-2005, 14:43
Since when has any EU member been denied fiscal policy?
You're not forbidden, you just can't. Only recently had there been small concessions about the "Pact of stability", which means States are a little more free concerning budgetary matters.

Excerpt from the Constitution (article already in use, although the Constitution is not) Art III-181:

1. Overdraft facilities or any other type of credit facility with the European Central Bank or with
the central banks of the Member States (hereinafter referred to as "national central banks") in favour
of Union institutions, bodies, offices or agencies, central governments, regional, local or other
public authorities, other bodies governed by public law, or public undertakings of Member States
shall be prohibited, as shall the purchase directly from them by the European Central Bank or
national central banks of debt instruments.
Only a Central Bank can fund properly budgetary policies. If we're not deprived entirely of budgetary tools, we're virtually.

Taffy_is_a_Taff
06-04-2005, 22:23
didn't the Deutschmark used to be a very succesful currency?

Kagemusha
06-04-2005, 22:37
Yes and if you look at the value of deutchmark and compare it on euro its almost the same.

Productivity
06-05-2005, 01:43
Only a Central Bank can fund properly budgetary policies. If we're not deprived entirely of budgetary tools, we're virtually.

So taxes aren't a valid way to fund a budget??? What you are implying is that seigniorage is the only way there is to fund a budget. That's just crazy. Seigniorage is quite possibly the most inflationary thing on the planet.

If you can't run a budget deficit, how did France (and Italy I think) manage to blow the fiscal stability pact circa 2002-2003 for a couple of budgets in a row?

Ldvs
06-05-2005, 12:40
So taxes aren't a valid way to fund a budget??? What you are implying is that seigniorage is the only way there is to fund a budget. That's just crazy. Seigniorage is quite possibly the most inflationary thing on the planet.

You're obviously not aware of the situation here. Taxes in France are already very high and it's not enough to fund our budget. I don't know if your word "seigniorage" is Australia slang but in case it means using deficits to fund a budget, yes it's inflationist, and yes it can work when the circumstances are favorable.


If you can't run a budget deficit, how did France (and Italy I think) manage to blow the fiscal stability pact circa 2002-2003 for a couple of budgets in a row?
And Germany. You can run a budget deficit, but it's not allowed beyond 3% of the country's GDP.

Productivity
06-05-2005, 13:33
You're obviously not aware of the situation here. Taxes in France are already very high and it's not enough to fund our budget.

So how do you suggest said budget deficit gets funded? Seigniorage??? Maybe your government should consider cutting spending if it's that bad.


I don't know if your word "seigniorage" is Australia slang but in case it means using deficits to fund a budget, yes it's inflationist, and yes it can work when the circumstances are favorable.

The average Australian wouldn't know seigniorage if it bit them on the finger. The etymology of it is french, so I would guess the average frenchman would have a better chance of knowing what it is than the average australian. It means printing money to fund a deficit, and it seems to be how you are advocating funding your own. If it's not, tell me how you advocate the central bank funding your deficit.

And you can't use deficits to fund a budget. A deficit is a type of budget. There are four ways (three under the correct circumstances) can fund a budget deficit. Taxes, debt (bonds usually, these can be included as taxes under certain circumstances), seigniorage and asset sales. Of these, the only one that a central bank has control of is seigniorage.


And Germany. You can run a budget deficit, but it's not allowed beyond 3% of the country's GDP.

So are you complaining about the 3% cap, or are you complaining about the independance of the ECB?

Boohugh
06-05-2005, 13:56
What is your issue with it?

The Euro is a step towards complete economic and political integration in Europe.

The Euro will never operate effectively unless all major taxation and spending decisions are passed over to one authority for all of Europe, with minor decisions taken by provinces (i.e a federal system like as the US). This means that many major political decisions will no longer be decided by my national government, such as social security, health and military spending.

I don't feel I have a European identity, and I don't want to be part of a European state, especially as I have absolutely no confidence in European institutions and the European political system.

Duke Malcolm
06-05-2005, 14:07
Perhaps the Euro should be scrapped : and replaced with a better, bolder, awe-inspiring currency.... Pounds Sterling! Have the Continental types dealing with old money -- pounds, shillings, and pennies, or if they find the maths too hard, then let them settle for pounds and new pence...

Ldvs
06-05-2005, 17:20
Maybe your government should consider cutting spending if it's that bad.
That's what they're doing although our laws make firings difficult and the French people is attached to the "Public services".


The etymology of it is french, so I would guess the average frenchman would have a better chance of knowing what it is than the average australian. It means printing money to fund a deficit, and it seems to be how you are advocating funding your own. If it's not, tell me how you advocate the central bank funding your deficit.
The average Frenchman wouldn't know what it is either since the closest word "Seigneur" (Lord) has little to do with the definition you've given. Perhaps it's a technical word in banking but I've never heard it. The French Central Bank could lend money to the State as a last resort, it no longer can, though.


So are you complaining about the 3% cap, or are you complaining about the independance of the ECB?
Both I suppose, since you're not allowed to use deficits. However, I'm not for the removal of the cap because it would seriously damage our currency and the inflation could get out of hand, but one could be temporarily (1 year or two) allowed to overstep it if the deficit is not gigantic.

Productivity
06-06-2005, 01:55
The average Frenchman wouldn't know what it is either since the closest word "Seigneur" (Lord) has little to do with the definition you've given.

That actually is the derivation. It was one of the priviledges derived from being a lord, the ability to control and mint money.


Perhaps it's a technical word in banking but I've never heard it.

It is a economic term yes. I wouldn't have thought of it as being technical, but then again I use it all the time, but you might be right so apologies for that line of the conversation.


The French Central Bank could lend money to the State as a last resort, it no longer can, though.

Financing a deficit through bonds/loans. I'm failing to see how you can not do this anymore. I'm struggling to beleive that the French economy has so little liquidity that the French Central Bank needs to come in as a lender of last resort.


Both I suppose, since you're not allowed to use deficits.

Yes you are allowed to use deficits. They are just capped at 3% of GDP. You said that yourself. And that 3% appears to be a soft cap at best, because I have seen quite a few countries break it without penalty.


However, I'm not for the removal of the cap because it would seriously damage our currency and the inflation could get out of hand, but one could be temporarily (1 year or two) allowed to overstep it if the deficit is not gigantic.

Fair enough, while normally I wouldn't agree with the cap, I think it's needed for the start of Europe as an entity. Pity it punishes inflation averse countries like germany as well though, because of Italy et. al. love of inflationary policy.

bmolsson
06-06-2005, 03:48
Actually there will be much less military spending in Europe if every European country was a part of a federation. I mean where would the enemy come from..... ~;)

Ldvs
06-06-2005, 09:27
That actually is the derivation. It was one of the priviledges derived from being a lord, the ability to control and mint money.
I've checked and this word does exist in French: seigneuriage. As I suspected it's a technical word. Thanks for teaching me a French word ~;)


I'm failing to see how you can not do this anymore. I'm struggling to beleive that the French economy has so little liquidity that the French Central Bank needs to come in as a lender of last resort.
As I quote above (post #33) it's just forbidden. As for the French economy having so little liquidity, I'm not a banking expert, thus I can't tell you the current situation. Nonetheless I said it was a possibility, not a necessity.


Yes you are allowed to use deficits. They are just capped at 3% of GDP. You said that yourself.
I was just being lazy and didn't want to repeat myself ~D