Is the Euro Failing Forum?
Is this the end of the euro as we know it?As the trendy Europeans face the fading of EU fashion, we have to ask if you believe the European Monetary Union is going to fail. I think it is clear that without one government, this group of many chiefs cannot effectively support their currency, and so I believe they have prematurely created the euro. As national parliaments voted to decide whether to assist Greece and the eurozone or not, nationalistic debate and naive political strategy surfaced. The fact that such legislation nearly halted support of the euro system should have clearly illustrated the failings of EU ideology. Without one government, you simply cannot have one currency!
Over the weekend, the sluggish European Central Bank (ECB) finally grasped the levity of the situation and put forth more than the lip service we have grown accustomed to from lazy European politicians. In US central bank-like fashion, the ECB finally announced it would buy government and private bonds in historic fashion to support the euro currency. Still, it was only but last week that the ECB did nothing when declaring its latest policy, and the actions it announced since were called "a step too far." The thing about that is that the free market decides what it needs, not politicians. Likewise, citizens of countries decide what they will accept, and so Greece burns.
In a recent Topic of Debate, we said Greece should tax tourism and target tax evasion, and it was argued by bright reader, who understood the importance of tourism for Greece, that such actions would be naive. My answer was that this is not a black and white issue, and that pain could not be avoided, just minimized. I must ask, how much tourism will Greece have now that its capitol is on fire and government near collapse? I believe it would less costly to add income generating fees to touristic expenses than to scare away tourism altogether.
This forum is asking another question though, and we would like your thoughts here and on the Greek topic above. You may click the link above to comment on the Greek problem. Below, you may click through the "Discuss Topic" tab to tell us what you think about the euro issue:
Is the Euro Failing?
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posted by The Greek | 10:07 AM
10 Comments:
Is the Euro Failing? That question may be better rephrased as "Is the Euro Falling?". That the Euro is in danger is not questioned; I doubt if it survival is threatened (at least of now). The Euro's main threat is that not all EU members use it, so not all EU members perceive or believe it be a "full" currency like the Pound Sterling, Krona or Swiss Franc.
What is damaging is that the countries in immediate reisk (Greece, Spain, Portugal, Italy and Ireland) do use the Euro, and as has been brought out 15 national parliaments need to decide how and what to do. Without a central government or governing set of rules,the Euro faces the prospect of becoming a regional currency, not an international one.
Until Brussels and Stroudsbourg can create a true "EU", the Euro will become sidelined and devolve to what it was before - the "ECU", for use only within the Euro zone.
We may yet see French Francs and Deutsche Marks return to the international scene.
Like the US ecomony measures must be taken to keep it afoat or else Europe will go down with it. Greece is getting help and I know Italy is not in danger so if Euope can support each other perhaps the Euro can remain afloat.
Falling or failing, the Euro is in trouble. That's clear. Just look at the countries that traditionally have always survived as leaders in world markets. And how can anyone possibly expect anything different when faced with a econom crisis? The first move is always to strengthen the very thing that weakens it in the first place. And that looks like that is exactly what is happening. In a year we'll all find out what was the right move, but that year could be devastating to the whole world makeup as we now know it. Only time will tell? But who can afford to wait for that.
"Is this the end of the euro as we know it?"
Huh? Didn't you read the news?
"Without one government, you simply cannot have one currency!"
Tell that to the 50 US governors, who defend their states' rights with claws and teeth! And how strong is the president really, when he needs the support of that nuthouse called US Senate for every serious issue? Hmm?
"The thing about that is that the free market decides what it needs, not politicians."
Well, we have seen the huge success of those "free markets" in the last years, didn't we? Gladly, we Europeans believe in regulated markets, which provide more stability.
"I must ask, how much tourism will Greece have now that its capitol is on fire and government near collapse?"
Well, now that's the burning question! Lots of cancellations of hotel rooms and conventions recently. THAT certainly isn't the way out of this mess, and even more damaging than any tourist tax, I totally agree.
Anonymous - I believe the euro's survival is in question, and was doomed, if not for the ECB action. It's now clear to the German Parliament and EU citizens. Unfortunately, Merkel's smart politics also cost the EU a lot extra. She may still lose some government control after May's election. Your regional currency theory is interesting, but I suspect there would be no middle ground. Looks like Europe is heading for a double-dip to me.
Gray - Tourism is disappearing all over Europe. I'm guessing that as long as the Middle East stays stable, Turkey should gain some European visitors. I do not think Europeans are scared of Greek riots; they know how to circumvent them. But what about work stoppages and strikes...? That will keep Europeans away. Americans will be too frightened to visit Greece, outside of Greek Americans who see it as a great value due to dollar/euro exchange rates. I would invest in Greek/American travel agents this year!
Something to keep in mind...
Just as the dollar looked worthless, the rating agencies came down on Europe. Is corruption limited to Greece, or is it perhaps found on Water Street as well?
"I believe the euro's survival is in question, and was doomed, if not for the ECB action. It's now clear to the German Parliament and EU citizens."
I don't know where you get that impression. That's not the mood here, as a check of Eurozone newspapers, media, and European people would show you. The whole Eurodoom hype is an US invention, and that's where most of those Anti-Euro opinions come from.
"Tourism is disappearing all over Europe." - Tell that to a good friend of mine, a part time service employee (no wealthy woman, she), who is just on the way to the Canary Islands. Gladly, the airports there just reopened at 2am after another one of those temporary "ash cloud" closures. Not even in Greece tourism is "disappearing", with the sole exception of Athens, maybe.
"I do not think Europeans are scared of Greek riots" Well, depends on how you define "scared". People are very concerned, and nobody wants to see his vacations ruined by such shit. And there are official warnings (!) to avoid Athens because of the unrest. That's not helping Greece's economy, of course, and that's got to change. I'm totally in sync with (e)kathimerini on this, the newspaper's editors call for stopping the violence and for political parties working togethers in this national emergency, and for not increasing the tensions. That's of utmost importance now, imho.
But to raise a totally different point: I've read in a German newspaper that allegedly there's widespread Anti-Americanism in Greece, which is fueling the view that WallStreet is more to blame for the mess than the own governments. That's somewhat surprising to me, I didn't think it's worse than in other countries. You certainly can tell me more about this. Did you ever experience discriminations or hostilities in Greece, as a Greek American?
"Just as the dollar looked worthless, the rating agencies came down on Europe. Is corruption limited to Greece, or is it perhaps found on Water Street as well?"
Good question. It has been noted that the timining is suspicious. With your WallStreet connections, have you heard any inside rumours about this? Are the rating agencies doing a smear job for their big hedge fund clients?
"I would invest in Greek/American travel agents this year!"
That's the right spirit! Every support for the Greek economy now is helpful, and I agree, there's still a lot of unused potential in the tourism sector. Really, that nation has so much to offer to visitors, much more than than Turkey, imho (I can tell you a horror story about tourist experience there). Only the price difference resulted in the eastern neighbor getting ahead, but with the weaker Euro now, falling prices, the recent focus on higher quality accomodations, and also the fact that it's not an Islamic country (you don't have to like prejudices, but they have an influence), Greece has an advantage again. If only they stop the violence, which is desastrously unhelpful!
Imho especially other international airports than Athens, and the areas they serve, should be interesting. And there should be a focus on the spring and autumn seasons, summer often being too hot for many people's liking. I'm sure that with good advertising, intelligently designed package offers (including tourist guides, tours, rental cars, etc) and close collaboration with local authorities (closed museums and sites are a NoNo), there are very real business opportunities in the Greek tourism sector. And I can only applaud all Greek Americans who focus on this now. Best help Greece can get!
Gray, Germany: "The whole Eurodoom hype is an US invention, and that's where most of those Anti-Euro opinions come from."
Rubbish! Over here in England, we've been predicting the failure of the euro since day 1.
Nothing would please we Brits more than the euro crashing out, the breakup of the EU and/or our exit from this disasterous 'union'.
We'd be freed to trade with other countries than the French/German axis in Euroland. Britain would probably do very well out of the euro's disintegration.
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