Is the end nigh for the Euro? [vol. 3]

[Gargamel]

rdjohn said:

David Smith provides a nicely balanced argument

http://www.economicsuk.com/blog/002262.html#more

More often than not, he is usually right

For those touting the "success" of the Euro that article has some good reality checks (also for those who believe Britain is doomed)


Based on full-year figures, in 2017 Italy’s gross domestic product (GDP), in real terms, was just 6.3% above its 1999 level, which averages out at growth of 0.3% a year, equivalent to prolonged stagnation; almost two “lost” decades.

By comparison, German GDP over the same period has risen by 27.4%, more than four times as much, underlining the difference between the eurozone’s haves and have-nots. Britain, which sensibly decided to stay out of the euro, puts both of them to shame, having recorded a 38.9% rise in GDP over the same period.

[anonymous-user]

Gargamel said:

... Britain, which sensibly decided to stay out of the euro....

If that isn't sarcasm you need to Google Black Wednesday

[Gargamel]

fblm said:

Gargamel said:

... Britain, which sensibly decided to stay out of the euro....

If that isn't sarcasm you need to Google Black Wednesday

Its from the article... I remember Black Wednesday, it was that magnificent movement where John Major bravely set his face against convergence with the Euro and the German currency cage and struck a fine blow for freedom.

We devalued and reset, and went on a long and sustained period of economic growth ! Exactly what will happen when we finally leave the EU

A good decision, even if Soros did make a couple of quid.

[Tryke3]

Gargamel said:

For those touting the "success" of the Euro that article has some good reality checks (also for those who believe Britain is doomed)


Based on full-year figures, in 2017 Italy’s gross domestic product (GDP), in real terms, was just 6.3% above its 1999 level, which averages out at growth of 0.3% a year, equivalent to prolonged stagnation; almost two “lost” decades.

By comparison, German GDP over the same period has risen by 27.4%, more than four times as much, underlining the difference between the eurozone’s haves and have-nots. Britain, which sensibly decided to stay out of the euro, puts both of them to shame, having recorded a 38.9% rise in GDP over the same period.

Have you heard of east germany ? Why do you come on the internet and present fake data like its something you have any idea about ?

Ffs

[Digga]

Tryke3 said:

Gargamel said:

For those touting the "success" of the Euro that article has some good reality checks (also for those who believe Britain is doomed)


Based on full-year figures, in 2017 Italy’s gross domestic product (GDP), in real terms, was just 6.3% above its 1999 level, which averages out at growth of 0.3% a year, equivalent to prolonged stagnation; almost two “lost” decades.

By comparison, German GDP over the same period has risen by 27.4%, more than four times as much, underlining the difference between the eurozone’s haves and have-nots. Britain, which sensibly decided to stay out of the euro, puts both of them to shame, having recorded a 38.9% rise in GDP over the same period.

Have you heard of east germany ? Why do you come on the internet and present fake data like its something you have any idea about ?

Ffs

You raise a fairly difficult point; given the manifold changes to the German economy - the addition of East Germany and their joining of a currency shared by far, far weaker economies - it is nigh on impossible to draw completely transparent comparison with the U.K.

Furthermore, with regard to the German economy, it is very much unclear as to whether their choices will be optimal in the longer term.

[Gargamel]

Tryke3 said:

Have you heard of east germany ? Why do you come on the internet and present fake data like its something you have any idea about ?

Ffs

Er... 1999 was nine years after unification, Plus I would have thought bringing all the western modernization to a low productivity area like east Germany would be a massive driver for GDP.


Have another go ...

[Gargamel]

Anyway if you want other proof that the Euro as a currency has been a universally good thing, there is plenty of it around.

I am not so foolish as to believe we are likely to see the collapse of the Euro as a currency anytime soon.

But, would you say Eurozone countries economies continue to converge ? Or are they divergent ? The further apart they get, the more the chances of a serious issue occur. France and Germany have already abandoned the Growth and Stability pact....

[anonymous-user]

Gargamel said:

fblm said:

Gargamel said:

... Britain, which sensibly decided to stay out of the euro....

If that isn't sarcasm you need to Google Black Wednesday

Its from the article... I remember Black Wednesday, it was that magnificent movement where John Major bravely set his face against convergence with the Euro and the German currency cage and struck a fine blow for freedom.

We devalued and reset, and went on a long and sustained period of economic growth ! Exactly what will happen when we finally leave the EU

A good decision, even if Soros did make a couple of quid.

It's wasn't a good decision, it was the only possible path; we were forced out. That turned out to be good for us but to dress it up as a decision we took is, at best, spin.

[Gargamel]

fblm said:

It's wasn't a good decision, it was the only possible path; we were forced out. That turned out to be good for us but to dress it up as a decision we took is, at best, spin.

Yes I know it was probably mismanagement, but to try to manipulate the market was ill advised... I grew up believing in the free market, not a lot has happened to change my mind.

[anonymous-user]

fblm said:

Gargamel said:

fblm said:

Gargamel said:

... Britain, which sensibly decided to stay out of the euro....

If that isn't sarcasm you need to Google Black Wednesday

Its from the article... I remember Black Wednesday, it was that magnificent movement where John Major bravely set his face against convergence with the Euro and the German currency cage and struck a fine blow for freedom.

We devalued and reset, and went on a long and sustained period of economic growth ! Exactly what will happen when we finally leave the EU

A good decision, even if Soros did make a couple of quid.

It's wasn't a good decision, it was the only possible path; we were forced out. That turned out to be good for us but to dress it up as a decision we took is, at best, spin.

It was the ERM we were forced out of, some 10 years before the Euro came into being. UK made a decision well after the ERM debacle to not join the new Euro currency. It's amazing that other countries didn't learn the lessons of what happens when you tie yourself to a currency value that does not suit your economy. A classic case of politicians ego's overruling basic economic common sense.

[rdjohn]

jsf said:

It was the ERM we were forced out of, some 10 years before the Euro came into being. UK made a decision well after the ERM debacle to not join the new Euro currency. It's amazing that other countries didn't learn the lessons of what happens when you tie yourself to a currency value that does not suit your economy. A classic case of politicians ego's overruling basic economic common sense.

The version of events that I tend to remember. I think that the PIGS believed that they were on a one-way trip to prosperity.

I live in rural France and everyday I see reminders of just how damaging the Euro has been to the local economy. Add a high-tax regime on top and, despite the very high levels of productivity at the National level, I see a lot of enforced poverty, due to massive levels of unemployment, particularly among younger males.

The Black economy is also massive.

[anonymous-user]

jsf said:

It was the ERM we were forced out of, some 10 years before the Euro came into being. UK made a decision well after the ERM debacle to not join the new Euro currency....

Sep92 to Jan99 actually so a little over 6 years and ERM was the mechanism for maintaining stability with the ECU prior to becoming/joining the Euro on 1st Jan 99. We were in the ERM, like the rest, to join the Euro in 99, fortunately we failed; my point is simply that it wasn't a decision we made, the decision was made for us by the markets. You couldn't (and still can't) join the new Euro without joining the ERM first, so after '92, like it or not, the choice to the join the Euro wasn't ours to make (without going through ERM again).

[anonymous-user]

fblm said:

jsf said:

It was the ERM we were forced out of, some 10 years before the Euro came into being. UK made a decision well after the ERM debacle to not join the new Euro currency....

Sep92 to Jan99 actually so a little over 6 years and ERM was the mechanism for maintaining stability with the ECU prior to becoming/joining the Euro on 1st Jan 99. We were in the ERM, like the rest, to join the Euro in 99, fortunately we failed; my point is simply that it wasn't a decision we made, the decision was made for us by the markets. You couldn't (and still can't) join the new Euro without joining the ERM first, so after '92, like it or not, the choice to the join the Euro wasn't ours to make (without going through ERM again).

The physical Euro that people use was introduced 1 jan 2002, the technical accounting currency that replaced the ECU started in 1999. For the man on the street, the Euro started in 2002, prior to that it was not a currency which you could buy anything with, it was an accounting method used by central banks.

The decision to join or not was very much still a topic in the UK during the Blair years and was debated numerous times, despite the ERM failure.

[rdjohn]

From Gordon Brown’s Wiki

European single currency

In October 1997, Brown announced that the Treasury would set five economic tests to determine whether the economic case had been made for the United Kingdom to adopt the European single currency. The Treasury indicated that the tests had not been passed in June 2003.

I believe Blair was hugely in favour, just as he was with enlargement and ignoring the referendum result, and even the second Iraq war.

Fortunately, the Treasury provided sufficient wiggle room for Brown to say NO. His lasting legacy for the UK in addition to saving RBS, PFI, and the creation of the UK’s massive public indebtedness.

[anonymous-user]

jsf said:

The physical Euro that people use was introduced 1 jan 2002, the technical accounting currency that replaced the ECU started in 1999. For the man on the street, the Euro started in 2002, prior to that it was not a currency which you could buy anything with, it was an accounting method used by central banks.

The decision to join or not was very much still a topic in the UK during the Blair years and was debated numerous times, despite the ERM failure.

Legacy currencies were irrevocably fixed to the Euro on NYE '98. The fact that the man in the street kept using physical notes for 2 years is an irrelevant curiosity. The banking and payments systems handled both fungibly from 99. The euro was live, not an 'accounting currency' whatever that is and not just used by central banks. I was a EURGBP trader at the time!

Yes people talked about us joining the Euro post '92 but it was you who made the distinction between the ERM and the Euro so you should realise there is no way to join the Euro without first joining, and managing to stay in, the ERM for 2 years. (ps. To Gordon Brown's credit, every time it was brought up he gave the idea very short shrift)

Edited by anonymous-user on Monday 28th May 19:43

[markcoznottz]

rdjohn said:

From Gordon Brown’s Wiki

European single currency

In October 1997, Brown announced that the Treasury would set five economic tests to determine whether the economic case had been made for the United Kingdom to adopt the European single currency. The Treasury indicated that the tests had not been passed in June 2003.

I believe Blair was hugely in favour, just as he was with enlargement and ignoring the referendum result, and even the second Iraq war.

Fortunately, the Treasury provided sufficient wiggle room for Brown to say NO. His lasting legacy for the UK in addition to saving RBS, PFI, and the creation of the UK’s massive public indebtedness.

Plus he was a sociopathic control freak, he wanted complete control over as much as possible hence he ceded nothing. Blair on the other hand just wanted loads of houses so would agree to anything. Career politician.

[anonymous-user]

markcoznottz said:

rdjohn said:

From Gordon Brown’s Wiki

European single currency

In October 1997, Brown announced that the Treasury would set five economic tests to determine whether the economic case had been made for the United Kingdom to adopt the European single currency. The Treasury indicated that the tests had not been passed in June 2003.

I believe Blair was hugely in favour, just as he was with enlargement and ignoring the referendum result, and even the second Iraq war.

Fortunately, the Treasury provided sufficient wiggle room for Brown to say NO. His lasting legacy for the UK in addition to saving RBS, PFI, and the creation of the UK’s massive public indebtedness.

Plus he was a sociopathic control freak, he wanted complete control over as much as possible hence he ceded nothing. Blair on the other hand just wanted loads of houses so would agree to anything. Career politician.

To be fair he did give the BoE or at least the MPC independence to set rates too.

[Norfolkit]

Enricogto said:

As i explained a million times in this thread and a couple of others, there is no chance, i repeat, NO chance that voters will be called to cast a preference on an Italexit-type referendum. It is constitutionally forbidden, and even this alliance hasn't got the necessary majority to change the constitution.

So, the politicians are so scared of the answer they might get, they've banned asking the question.

[anonymous-user]

Tryke3 said:

Have you heard of east germany ? Why do you come on the internet and present fake data like its something you have any idea about ?

Ffs

That’s a very interesting point but I suspect reunification may have had the opposite effect to what you imagine. With the post unification depression and boom of the early 90’s out the way the massive investment in East Germany over the previous decade should have had a huge effect on poor East German productivity and subsequent GDP growth post Euro...

[Rovinghawk]

fblm said:

That’s a very interesting point but I suspect reunification may have had the opposite effect to what you imagine. With the post unification depression and boom of the early 90’s out the way the massive investment in East Germany over the previous decade should have had a huge effect on poor East German productivity and subsequent GDP growth post Euro...

Are we comparing like with like?

Perhaps one set of figures is purely for BRD and the later set that of the reunified Germany.