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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (36356)	5/29/2000 10:42:00 PM
From: LLCF	Read Replies (1) \| Respond to of 42523

<Euro is a political project that makes little economic sense considering the disparities between the participants> Agreed with the caveat that if politics were buried and they let the bundesbank run the EURO instead of a commitee representing all the disparate groups it would probably work fine. <DAK, there are essentially two possibilities...either wideranging structural reforms are undertaken to transform the Euro-zone into a viable common currency area, or it will eventually fall apart, with perhaps only the core (Benelux countries, France, Germany, Austria) remaining.> But I believe that your second possibility would in the long run not be 'falling apart'... IMO what you need is a core group with common goals [don't forget the Nordic countries who would probably adopt the Euro in the latter example as well] to create a viable currency... this is the key A VIABLE CURRENCY. Then this 'good money' would drive out the bad just as the 'real' currencies have been doing for years in Europe already... ie. Italians with ECU and DM mortgages on their homes.... and commercial loans being made in harder currencies. In a lot of ways I see what happened [Euro creation] as a huge sacrifice by the Germans in the name of progress... ie. their currency would eventually have become 'the' European [excuse me to you Brits 'continental'] currency eventually with others adopting it like the latin countries adopting the dollar. The 'fall apart' that you mention is really countries that disagree with the 'hard money' group bail one by one... so what? By that time all commercial activities will be in the Euro anyway and the local currency will be a futile attempt. It's going to be interesting! DAK