Euro very weak

[redone7010]

Ah now, let's not bring nationality into it. I've no problem with a common market, which is what we all signed up to. I've a huge problem with this red tape ridden, over zealous and over paid behomoth that the EU has become. It's a huge mistake and the single currency is just one of the symptoms of the rot. Sooner we all accept that and move on the better.

As an Irishman at the moment I`m not ahuge fan of the European Union for obvious reasons, but one thing that has come out of it, is how handy the Euro is while travelling within Europe (Britain excepted), in comparing prices, plus not having to pay commission on currency exchange. Both ways commision in the past was costing close to 10%

[Phoenixdays]

Ah now, let's not bring nationality into it. I've no problem with a common market, which is what we all signed up to. I've a huge problem with this red tape ridden, over zealous and over paid behomoth that the EU has become. It's a huge mistake and the single currency is just one of the symptoms of the rot. Sooner we all accept that and move on the better.

, a
Britain is the world's fifth largest economy at the moment (with France a close sixth).
Sterling can stand alone.
For a small peripheral economy like Ireland return to an Irish currency might be a poor option. It would likely be weaker than the current Euro , adding hugely to the cost of imports, servicing the national debt and reducing the spending power of the average person.

[weeschmoo]

As an Irishman at the moment I`m not ahuge fan of the European Union for obvious reasons, but one thing that has come out of it, is how handy the Euro is while travelling within Europe (Britain excepted), in comparing prices, plus not having to pay commission on currency exchange. Both ways commision in the past was costing close to 10%

So the costs of the disaster that has been unleashed on the countries in the EZ has been worth it so you can compare prices and don't lose 10% if you use cash? Or you could use electronic money transfer and I'm sure there are countless apps for price comparison.

[Dub Lad]

This coming Thursday the European Central Bank will begin to print money (quantative easing) Euro is going to get alot weaker yet and with deflation your money is worth even less, US are stop printing money thus adding to the weak exchange rates.

[weeschmoo]

, a
Britain is the world's fifth largest economy at the moment (with France a close sixth).
Sterling can stand alone.
For a small peripheral economy like Ireland return to an Irish currency might be a poor option. It would likely be weaker than the current Euro , adding hugely to the cost of imports, servicing the national debt and reducing the spending power of the average person.

Small economies which control their own currency seem to do quite well and there are plenty. The EU commission is bricking it over Grexit, not for what it might do to the euro, but that Greece will start to thrive once it can devalue and go to the markets, and this might temp others to unchain themselves from the corpse.

[weeschmoo]

This coming Thursday the European Central Bank will begin to print money (quantative easing) Euro is going to get alot weaker yet and with deflation your money is worth even less, US are stop printing money thus adding to the weak exchange rates.

Too little and far too late.
The ECB is talking of adding €500billion, the eurozone economy is €10 trillion.
To compare.
The US economy is $15 trillion and the Fed added $4 trillion.
The UK economy is £1.5 trillion and they added £375 billion.
And the structural problems in the EZ dwarf the UK and US.

[Lucy Chambers]

, a
Britain is the world's fifth largest economy at the moment (with France a close sixth).
Sterling can stand alone.
For a small peripheral economy like Ireland return to an Irish currency might be a poor option. It would likely be weaker than the current Euro , adding hugely to the cost of imports, servicing the national debt and reducing the spending power of the average person.

This has nothing to do with England, my opinion is based on what I've seen working across the eurozone. I believe the euro has weakened the economies it is used in.

So the costs of the disaster that has been unleashed on the countries in the EZ has been worth it so you can compare prices and don't lose 10% if you use cash? Or you could use electronic money transfer and I'm sure there are countless apps for price comparison.

Precisely.

As an Irishman at the moment I`m not ahuge fan of the European Union for obvious reasons, but one thing that has come out of it, is how handy the Euro is while travelling within Europe (Britain excepted), in comparing prices, plus not having to pay commission on currency exchange. Both ways commision in the past was costing close to 10%

It isn't enough to justify signing your life away to the ECB. You go on holiday roughly once a year, what about the other 50 weeks?

[Phoenixdays]

Small economies which control their own currency seem to do quite well and there are plenty. The EU commission is bricking it over Grexit, not for what it might do to the euro, but that Greece will start to thrive once it can devalue and go to the markets, and this might temp others to unchain themselves from the corpse.

Greece ain't gonna thrive anytime soon in or out of the Euro but may have abigger case to leave than Irelqnd.Why would markets lend to a nea r bankrupt country except at punitive rates.Ireland controlled its own currency in the 80's yet failed to drag itself out of recession.

[weeschmoo]

Greece ain't gonna thrive anytime soon in or out of the Euro but may have abigger case to leave than Irelqnd.Why would markets lend to a nea r bankrupt country except at punitive rates.Ireland controlled its own currency in the 80's yet failed to drag itself out of recession.

A concise explanation from Forbes.
It’s worth taking a little step back here and considering the economic situation without the interference of European Union politics. Greece is, as a nation, effectively bankrupt. The public debt is of such size that it simply cannot ever be repaid. However, nations do not go bankrupt. So, some other solution must be found. And over the centuries we’ve worked out what is the appropriate treatment in such cases. Of course, some of it is that the debt needs to be renegotiated. Just as with a commercial organisation that goes bust, the people that lent it the money only get some of it back, so the same is true of a country. Oh dear, sorry, you’ve lost some of your money. Tough and better luck next time.

But that’s not all that happens. Even when we had the gold standard, more so under Bretton Woods, and at the heart of every IMF stabilisation programme since, has been the idea that a country must also devalue its currency in order to regain some sort of competitiveness. The alternative to such a devaluation is that the country must undergo a grinding internal devaluation of wages and thus prices. And as Keynes rightly pointed out this isn’t a happy process. We all have very firm opinions about what happens when our nominal wages decline. Yet that’s what has to happen in such an internal devaluation. Far better, far easier, causing much less pain, is to devalue the currency in a once off transaction.

Thus countries in the 1930s left the gold standard and after some 12 to 18 months found that they were recovering nicely. That’s certainly what happened to my native UK in that time period. They were even able to bring public spending and the deficit under control at the same time.

The same would be true of the Greek economy if a devaluation were possible. But, of course, being in the euro means that one is not. And that, in turn, is why Greece leaving the euro would be such a good idea. Yes, obviously, it would be chaotic and the first few months would not be pretty. But the standard economic prescription for what ails the country is devaluation. Given that membership of the euro is incompatible with this then the country should not be in the euro. QED

[Phoenixdays]

Don't disagree about Greece.My point is that in m.o. Ireland leaving the Euro at this stage would be disadvantageous leading to higher costs for tje economyreduced standards of living.If Irl renegotiated its debt as a stand alone economy the years of Troika austerity would look as nothing.This is my amateur opinion not that the professionals -economists-ever get it wrong, so many of them having predicted the crashes of 2008 years before.