tag:blogger.com,1999:blog-4169740113013066976.post6956398828583918454..comments2024-02-10T12:12:06.028+00:00Comments on The Real Blog: If I ask nicely, could we rethink the euro?David Boylehttp://www.blogger.com/profile/11410159311875228620noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-4169740113013066976.post-19616987159109485472010-11-22T16:44:31.990+00:002010-11-22T16:44:31.990+00:00As Joe says, deflation is a stealth way of making ...As Joe says, deflation is a stealth way of making everyone poorer when the object of policy should be to make people richer.<br /><br />We need to dig deep into workings of the economy to find out what really makes it tick and why it's not delivering the goods.<br /><br />This is perfectly possible - provided we ask the questions.Gordonhttps://www.blogger.com/profile/09261797893125328161noreply@blogger.comtag:blogger.com,1999:blog-4169740113013066976.post-32695213591709183612010-11-22T12:10:58.192+00:002010-11-22T12:10:58.192+00:00I agree there is some merit to you main point, but...I agree there is some merit to you main point, but I am a little concerned that you are offering devaluation as an alternative to austerity. It isn't. Devaluation is a kind of austerity whereby everybody's wages get cut and the country gets poorer. By stealth perhaps, but this is what happens.<br /><br />Yet your main point has some merit. Northern Europe has a history of sounder fiscal and monetary policy, and does not expect to devalue. Southern Europe has the opposite. Without a convergence of policy, there ought to be two Euros.Joe Ottenhttps://www.blogger.com/profile/18380362092159905533noreply@blogger.comtag:blogger.com,1999:blog-4169740113013066976.post-68439433279666457932010-11-20T18:20:35.429+00:002010-11-20T18:20:35.429+00:00@ Adam Bell
Risk doesn't go away because the ...@ Adam Bell<br /><br />Risk doesn't go away because the <i>currency</i> risk has been removed. It just morphs into <i>solvency</i> risk.<br /><br />As of now Brussels if doing its level best to kick the can down the road and pray because if Ireland goes then so do many major UK and European banks that have foolishley lend to a Ponzi scheme.<br /><br />This policy will eventually fail and my guess is that the likely outcome will be a collapse of the Euro, at best a massive restructuring.Gordonhttps://www.blogger.com/profile/09261797893125328161noreply@blogger.comtag:blogger.com,1999:blog-4169740113013066976.post-91141774455551258862010-11-20T18:10:13.615+00:002010-11-20T18:10:13.615+00:00I recall going to a meeting to discuss the pros an...I recall going to a meeting to discuss the pros and cons of joining held at Stockport Football Club with Chris Davies MEP speaking for and someone for UKIP against.<br /><br />In questions, I asked how the currency union could possibly accommodate strains arising from some countries doing better/being more competitive than others. In a nation state this is handled by transfer payments to or migration from rustbelt to sunbelt zones but these options are unlikely to be available or politically doable on a sufficient scale in Europe.<br /><br />The UKIP guy's comment was it was a good point which he hadn't thought of (doh!).<br /><br />Chris Davies' response was that economic growth would be so rapid that it wouldn't matter.<br /><br />This is wishful thinking of a very dangerous sort. It's not about absolute rates of growth (which, as I expected, never materialised). It's about differential rates of growth - and also competitiveness - which is exactly what has undone the Euro.<br /><br />So, yes. You are right; we need to rethink our entire approach to the EU. See for example,<br /><br />http://www.libdemvoice.org/opinion-wanted-a-liberal-plan-for-europe-15397.html<br /><br />We need the EU but we need it to be based on reality not fantasy.Gordonhttps://www.blogger.com/profile/09261797893125328161noreply@blogger.comtag:blogger.com,1999:blog-4169740113013066976.post-41848543577305135282010-11-19T13:50:50.109+00:002010-11-19T13:50:50.109+00:00I'm not saying that we should get rid of the e...I'm not saying that we should get rid of the euro. The euro is about dealing with currency risk, but it needs to circulate alongside the pound - not instead of it.David Boylehttps://www.blogger.com/profile/11410159311875228620noreply@blogger.comtag:blogger.com,1999:blog-4169740113013066976.post-80019164346604374152010-11-19T13:38:35.068+00:002010-11-19T13:38:35.068+00:00While I can see the sense in your arguments - and ...While I can see the sense in your arguments - and recently blogged in a similar vein - I can't help but feel that removing currency risk is still a strong argument in favour. This argument would be greatly strengthened with a weaker ECB, of course.Adam Bellhttp://declineofthelogos.wordpress.comnoreply@blogger.comtag:blogger.com,1999:blog-4169740113013066976.post-32604288146344620252010-11-18T22:52:17.347+00:002010-11-18T22:52:17.347+00:00Noooooooo. Britain's spent its entire post war...Noooooooo. Britain's spent its entire post war history trying the 'devalue at the first sign of trouble trick' which is all that this stuff about 'us' needing a special currency amounts to. <br /><br />We'd be massively better off in the euro. Just avoiding conversion costs would be a huge weight off most business's minds and then you have the great advantage that government couldn't keep messing with the interest rate. <br /><br />The euro works and we should have been in at the start.Anonymousnoreply@blogger.com