Arguments about the Euro are older than the currency itself. Does it do more than make tourism easier? Does it take too much sovereignty away from countries? Can countries ever back out of it once it’s been established? All of these were asked before the Euro’s birth in 1999 and ten years on, they are even more poignant.
Certainly the single currency has made it easier not only for tourists to jump countries, but also, more importantly, people seeking to relocate for work or pleasure. Without the Euro, it is more difficult for corporations to allocate funds to offshore departments, to reduce costs and open up opportunities and to have a unified message for Europe; it is also more difficult for those who desire to relocate to value a property, to compare local prices and understand how much it will really be to live in their potential new home and country.
…usually the biggest factor in deciding whether or not to move…
It’s more difficult doing all the above without the Euro, surely, but it isn’t impossible. In fact, the single currency is a very annoying problem for many people looking to locate as it promotes the strange but attractive myth that united monetary policy means united law and political policy: the money side of things is sorted out first (usually the biggest factor in deciding whether or not to move) because it’s familiar, but there’s been no research conducted into the laws of the land – much to the detriment and unhappy surprise of hopeful, usually retired and vulnerable, emigrants.
In reality, it’s only big businesses that can see a great amount of positives in having a unified monetary denomination. It makes it easier for them to “relocate” funds to “tax-friendlier” countries (e.g. Luxembourg and Malta), and to push jobs to areas within the Eurozone that have cheaper wages and standards of living: this is exactly what happened when French car manufacturing largely moved from France to Hungary in the last decade. It’s only positive effect on the general population is that it saves you a few pounds by not having to change up your currency when travelling.
That may sound like an overstatement…
So it works well for big businesses, and so too must it for governments? The short answer is no. Currencies reflect their host nation; whether they are inflated or not depends on how a country runs itself. Having it at the mercy of 17 economies is a nightmare, yet it isn’t; it’s at the mercy of the countries that are the richest and have the most Euros: Germany and France. It is these two countries that are at the centre of what to do with the Euro, looking over the crisis in a highly dictatorial fashion. Ireland, Spain, Italy, Belgium, Greece, Austria, and their nine compatriots have removed themselves of their primary ability to get through the current recession – currency inflation – and have replaced it with German and French governorship. That may sound like an overstatement, but there really is no talk of other countries being able to make a difference.
The Euro has been alive for just over ten years. People have become used to it, and it would, it must be conceded, be expensive to reinstate old currencies, but look at the alternatives: continued bail-outs for countries that have not changed their attitude to currencies costing hundreds of billions of euros that cannot be re-valued because of calamitous residual effects on France, Germany and other nations with large Euro reserves: America, UK and China. Instead of sparing everything to maintain the status quo, it’s time to let countries have their self-management back; the only alternative is the start of a real Euro-state with not only monetary policy, but legal policy and political policy administered from the more populous and richest members.