Posted on 4/25/2006, 4:24:32 AM by RWR8189
Another respected European economist is warning of the euro's collapse unless there is progress towards political union.
Paul de Grauwe of Belgium's Catholic University in Leuven is warning the euro is bound to collapse in 10 to 20 years because there is no clear movement toward political union in Europe, the EU Observer reported Monday.
Last week a new member of the European Central Bank's board, the German Bundesbank's vice president, made a similar point.
I am concerned about these trends because monetary union ... needs a common political foundation and a political commitment to function smoothly, said Jurgen Stark.
The 12 European nations using the euro have a 2 percent average increase in their gross domestic product and unemployment that is close to 10 percent, or more.
It would take a big event to scare them all into line...
Global shakeup in the dominate world powers....
imo
<< I'm thinking they have a MUCH bigger problem than the continued existence of the Euro - such as the continued existence of representative democracies in Europe.
"Where do you want the deck chairs, Captaine de Grauwe?" >>
Well said.
I gave it a 50/50 chance 5 years ago. Too optimistic?
bttt
1 USD = 0.807883 EUR
Wasn't it the other way around a while back?
Come to think of it...
1 CAD = 0.879806 USD
1 USD = 1.13661 CAD
What? Wasn't the loonie usually worth less than 75 cents?
The Euro is overvalued. When they went from DM to Euros, they laid what amounted to a surtax on everyone in Germany. In the seven years since I last lived in Germany, growth in the former West Germany is not very visible.
"
The 12 European nations using the euro have a 2 percent average increase in their gross domestic product and unemployment that is close to 10 percent, or more."
Yikes, that is terrible.
So if the Euro collapses, its a GOOD thing, then, right?!?
I understand the Potsdamer Platz in Berlin is pretty built up now, but I guess half of it was in East Germany.
You're right, Germany is stagnating. I really admire some of their society, particularly the autobahn and the way they are taught to drive properly so it works without speed limits. But they have too many taxes, perks, rules and red tape, and suffer high unemployment.
Of course, if the USA in a fit of national pride decided to annex Mexico (poor analogy, I know) and give its citizens a dollar for every peso, we might be in worse shape economically than West Germany is now, after annexing the second-world economy of the DDR.
bttt
Someone forgot the extra "PE" after the word euro.
EUR/USD low of 82.xx occurred in (iirc) October 2000.
You can look up the complete histories of these currencies in the futures mkts at Time & Timing. Take the free 30-day trial, very short signup, then use 'The Big Enchilada', which is that site's term for Universal Histories. Site's a cinch to use; kind of like a stock screen, but for futures.
The difference is that the Mexicans are, pound for pound, much harder workers than the Ossies, who have the work ethic of our inner city poor. The irony is that Wessies also despise the Poles and the (German) Russians, because they work too hard for too little pay and have too many kids.
Did you feel cheated, or were you getting your moneys worth is Slovakia?
"When they went from DM to Euros, they laid what amounted to a surtax on everyone in Germany."
The same was true about the Dutch Guilder --- which was undervalued by about 20%. The current government finally admitted that this was true several months ago (it was, of course, a previous government that was in power at the time). This hidden surtax was needed to bring in the weaker currencies.
Looks like you do quite well there. I pay $4 for a 16 oz beer in my local bar....unless it is happy hour.
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