Third time lucky, for Germany?

[Barnabas]

In Argentina during our 2001 crisis, provinces begun to print their own pseudo currenciy bonds, they were actually rather helpful at that time.

province of Buenos Aires



province of Cordoba



They don't exist anymore

[VetLegion]

For the EURO to make sense, europeans should all speak the same language, and national identities should be destroyed and merged into a new bigger european identity.

This is not really true. If you look at past experiences, for example the 19th century
gold standard, you can see that then there was free trade with moderately free but
unsubstantial movement of people (at least within Europe). A common identity is not
needed for a common currency to work. There are plenty of examples in the past: Spanish
silver dollars being used in English US colonies for example.

Each country absolutely must have its own currency only if you insist that things
have to be done with that currency, that is, if you want to manipulate it. Inflate,
deflate, devalue, or whatever. In such cases you end up with large transfers of wealth,
and this is something that can be done within countries. Between countries, it is
very hard (as we see nowadays).

But is radical currency manipulation desirable? I think not. If the money supply is
stable, almost everything can serve well as money. The EURO can survive as a
multinational currency if the people in control of the printing presses refrain from
inflating its supply too much.

You can see some evidence supporting that in the fact that many countries surrounding
the euro-zone have adopted the Euro voluntarily, despite having very different economies
from the "core" of the zone. Montenegro is a good example, but there is also Bosnia,
Estonia (a new arrival despite the crisis), etc.

The fact that some countries run up unreasonable amounts of debt, something they could
"solve" more easily if the had their own currency, doesn't mean that the single currency is
unviable, it just means that running up debt is.

[Barnabas]

The debts issue is only one of the issues, the other issue is that Germany can be and is competitive with the EURO, but the Euro may damage the competitivity of less developed countries.

[KrazyHorse]

Each country absolutely must have its own currency only if you insist that things
have to be done with that currency, that is, if you want to manipulate it. Inflate,
deflate, devalue, or whatever.

No, having control of your own currency is essential IF YOU WANT TO AVOID INSANE SWINGS IN INFLATION/DEFLATION.

Monetary velocity and the money multiplier are NOT constants. Old monetarism is dead for this very reason.

[Zoetstofzoetje]

European politicians do not control the Euro. The ECB does. Only the ECB can decide on when money is printed, without official external influence.

The French wanted to have political printing power, but the Dutch say no-way-Jose, and that NL would only enter the Euro if the ECB was fully independent. You kind of need the Dutch to be in the same boat as everybody else, considering that most import-export destined for mainland Europe goes through Dutch harbours (Rotterdam´s harbour alone is 41 square miles, twice the size of New Amster... I mean Manhattan).

Anyway, I´m glad that the bureaucrats have limited influence at best, so that quick and dirty solutions like printing money are less incentivized.

[Cort Haus]

For the EURO to make sense, europeans should all speak the same language, and national identities should be destroyed and merged into a new bigger european identity.

The concept of destruction of national identities is certainly a popular theme among some EU enthusiasts, but aside from the issue of a single currency, DESTRUCTION is not something to be taken lightly when it comes to hundreds of years of history. Of course, the ending of parochial nationalism is an idea that long pre-dates the EU as a progressive aspiration, but a sane approach would see national identities withering naturally over time, rather than being announced as illegal by the powers-that-be. Especially when those powers have little or no democratic mandate as is the case with the current EU.

Yugoslavia was an attempt at subordinating nationalism to a bigger identity, but slogans of Brotherhood and Unity were not enough to sustain it. Personally I feel that it might have been able to dissolve itself into its constituent parts peacefully had circumstances been different, but nonetheless it is a reminder that such unions are not easy, and the costs of failure can be high. Another federation, the UK, has had a longer history of cohesion but its future is not assured, despite a common language, currency and culture for hundreds of years.

In short, I think that "destruction of national identities" is a dangerous concept, however well-intentioned, and attempts to impose a federal US-model on Europe unnaturally is unwise. I am in favour of a slow, organic osmosis towards a cohesive Europe, not a hurried, forced and brittle one.

[Zoetstofzoetje]

In short, I think that "destruction of national identities" is a dangerous concept, however well-intentioned, and attempts to impose a federal US-model on Europe unnaturally is unwise. I am in favour of a slow, organic osmosis towards a cohesive Europe, not a hurried, forced and brittle one.

+1

I just hope slow is not English slow, or it will take millennia. Also, have you ever heard reports on companies merging, and how ´successful´ that is? Most famous example is ABN Amro. ABN was one bank, AM was another, And RO yet another one. To this very day you will find people referring to themselves as being from one of the three original banks.