The future of the Euro and EU.

The EU will continue because people and goods need to be able to travel freely and do business throughout the region.

The Euro should be abandoned and sooner rather than later. The problem of creating a United States of Europe is that they are not actually a single country. Culture and predominate language limits the mobility of people in a way that is not a problem in the US.

Housing Boom in Spain and Florida?, In the US, Tennesseans and Ohioans move down and keep wages in check, but in Europe I doubt the Dutch and Austrians are moving to Spain. Economy poor in Greece and Mississippi?, move to Virginia or Kansas here but Are Greeks moving to Germany and France?

Economists like Paul Krugman warned of this from the very beginning, arguing that the system is not equipped to deal with asymmetrical shocks. Disciplined countries like Germany are going to have prop up their deadbeat brothers-in-law in Spain, Greece, and Italy or else put those countries through a long period of grinding deflation. Either way, one side or the other is going to revolt. The best solution long term is to let each country have their own currency so they can inflate their way out of this mess.

Whether it was pride or forethought, Britain staying out of the Euro was the right decision.

Of course if any country decided to leave the Euro, one thing they wouldn't do is revert back to their pre-Euro currencies. It would require price changes on everything and retooling vending machines etc, they've already done that once, they can't afford to do it again.

What they call it isn't an issue - though it might just be the Greek Euro. But one thing for certain is that it would initially be 1=1 with the Euro (although that will quickly change) and the coins would have exactly the same dimensions and weights, but whatever they do it would be a total nightmare for all concerned!

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Originally Posted by Alexamateo

The problem of creating a United States of Europe is that they are not actually a single country. Culture and predominate language limits the mobility of people in a way that is not a problem in the US.

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I hasten to add that, as far as I can tell, there is no appetite for such a thing. A few politicians may wish for it, maybe, but not many of them either. It won't happen.

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Originally Posted by BDunnell

In the case of the last of the three segments you mention, the greedy bankers, self-regulation has surely been proven to have failed in the crises of recent years.

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Self-regulation doesn't work when peope and institutions know for sure they'll be bailed out. Let them fail once (like, really fail) and you won't need to come up with new regulations.

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Originally Posted by Rudy Tamasz

Self-regulation doesn't work when peope and institutions know for sure they'll be bailed out. Let them fail once (like, really fail) and you won't need to come up with new regulations.

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A fair point, but did those in those instititions that didn't fail whose actions helped precipitate the 2008 crisis believe their firms would be bailed out?

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Originally Posted by Mark

Of course if any country decided to leave the Euro, one thing they wouldn't do is revert back to their pre-Euro currencies. It would require price changes on everything and retooling vending machines etc, they've already done that once, they can't afford to do it again.

What they call it isn't an issue - though it might just be the Greek Euro. But one thing for certain is that it would initially be 1=1 with the Euro (although that will quickly change) and the coins would have exactly the same dimensions and weights, but whatever they do it would be a total nightmare for all concerned!

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But if they did that and very soon after 1 Greek Euro = 0.1 normal Euro (which it would as soon as Greece devalue its own currency) you could take them to other countries using the proper Euro and spend them, but a car for 10% of its real value.

They have to change back to the Drachma or a totally new currency they couldn't carry on with the same notes.

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Originally Posted by BDunnell

To how many of 'those wonderful countries' have you been since the Euro was brought in?

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Not very many because the value this very bad against the dollar. Italy was not toooo bad in some places.

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Originally Posted by Roamy

Not very many because the value this very bad against the dollar. Italy was not toooo bad in some places.

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Murder any English students, as that seems to be what Americans do when in Italy.

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Originally Posted by Bolton Midnight

But if they did that and very soon after 1 Greek Euro = 0.1 normal Euro (which it would as soon as Greece devalue its own currency) you could take them to other countries using the proper Euro and spend them, but a car for 10% of its real value.

They have to change back to the Drachma or a totally new currency they couldn't carry on with the same notes.

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No, you're right of course, but I just don't think going to the Drachma is the best option. At least going 1=1 initially then traders won't have to change all their prices. Of course you'd need different coins and notes. So I guess it's a 'totally new currency'.

It has to be a new one and one they can devalue to get out their current mess, would solve Greece's problems straight away (oh and starting to pay tax may help too).