The Euro is a questionable affair. It brings some obvious advantages, but lots of the possible problems would only become obvious in the longer run.
Well, it's been the official currency within the EU since 1999. Isn't 10 years already a long run? I remember Euro critics predicting a steep drop after its launch and that it would be a big disaster - but instead it came to be the most reliable currency in the world and I predict it will sooner or later replace the U.S. Dollar as leading currency. Where are those critics now? Somewhere in a hole, I presume, together with the blokes who recommended entrusting Lehman Brothers with your money.
The matter of fact is, that the eurozone hasn't really experienced a period of strong economic growth ever since it was created.
Neither have the USA or Japan. The only real economical growth in the past decade happened in China and Southeast Asia. Even more reason to stand united for the future. While I'm sure that Germany still could compete on its own with the new rising powers in the East, the majority of the EU member countries surely couldn't. Only together Europe is strong and only together is granted, that some countries won't fall behind, creating unbalances and disruptions within Europe - which is the last thing you'd want, considering the bloody European history.
The main problem of the Euro is that you only have one monetary policy for everyone, while the member states are not all in the same macroeconomic situation and they are also likely to react in different ways to the changes in the monery policy.
Well, that is exactly the reason why the Euro was introduced in the first place. You cannot be serious with turning that around against it now, can you?
This will be an even bigger problem for the new member states and I'm really looking forward to see how Slovakia will do. Another issue for the new member states is the long-term appreciation of real exchange rates, due to our price levels catching up with old member states. This has been happening through the appreciation of the nominal exchange rates, but since this will no longer be possible with the adoption of the Euro, the only channel left for real appreciation will be inflation and thus the new member states, which will adpopt the Euro now, will have to get ready for years of high inflation.
Here I must agree with you. I share the opinion, that the EU has overcranked it with accepting more members from the former Eastern Block, than it can swallow at the moment, since there are until now no instruments to effectively manage the bigger EU. They will come in time for sure, but there will with no doubt be a lot of teeth grinding on the way.
You cannot ignore the political necessities, however. Integrating the former Eastern Block countries into the EU as fast as possible prevents the development of a divided Europe, where economical differences would lead to political tensions and most of all the creation of permanent low-income countries, which is in nobody's interest.
In the times of crisis, our own currency also protects us from populist governments of the other member states that declare 'ulimited' guarantees on deposists in an attempt to suck up some foreign deposits into their troubled banks.
I cannot say anything to that but I do not know any "populist governments" within Europe, maybe with the exception of the Italian and the Polish governments
Our exchange rate has been rather unstable ever since the mortgage crisis broke out - massive appreciation at first and a less massive depreciation when it became obvious that the crisis has moved over to Europe - it is rather inconvenient for foreign trade but it's not unbearable.
Well, we're still at the beginning of the crisis...
Besides, a moderate depreciation in the times of a crisis is generally a good thing - it improves the competetiveness of the domestic companies and again that's one of the things that's not possible in the Eurozone.
Only if it's a short term thing. On the long run it damages the economy, because companies can get around the monetary imponderables by producing goods within the target market, competing with and possibly destroying/replacing native industries in the process - see the U.S. car industry at the moment for a present example.
I'm not a political economist (always hated that subject) but I have learned (and the experiences of my home country prove it), that in the long run a solid currency is better and more desirable, than a roller coaster currency.
As far as the countries with their own currencies that got into more serious trouble (Iceland, Hungary...) are concerned, it was not their own currency that got them into trouble in the first place, it was the government polices, ignoring long term external imbalances, budget defitcits, the lot. If you think mismanged countries should be joining the eurozone, then I wish you good luck.
Of course I do not want them to join
now, when they are in such a bad shape. Nobody wants that. They have to do their homework first. But I dare saying that Iceland in particular wouldn't be in such big trouble, if it had been a member of the EU.
All in all, I think that everyone should consider the pros and cons of the Euro and decide carefully whether to adopt it or not. There certainly are many more things to consider than your love or hate towards the EU.
As far as the EU as such is concerned, I don't want it to die, but being aware of its benefits doesn't mean that we should be happy with its faults. I want more liberties like the Schengen agreement and less socialist/green regulations we're getting now.
Well, the fact that the EU still exists, grows larger and is a most desirable club to be a member of for countries who haven't joined yet, I'd say that it is a success and that the advantages outweigh the disadvantages by far -- both on an intellectual/historical/ethnic and an economical level.
But I agree (and have said so), that there are faults which have to be dealt with. Only it would be a terrible mistake to conclude from these faults, that the EU itself is a bad institution. Rather it should be a stimulus to make it better, so that the big dream really works in the end.
Because with the exception of a few extreme rightwing populists, nobody really denies that the European integration is a desirable process to guarantee peace and prosperity in Europe for the future.
^ Very reasonable.
Wait till you pay in more than you get out and your taxes rise to help, say, Greece, France or Spain who start off richer than you in the first place - then let us see how reasonable you think the EU is.
If you refer to Britain, then I must disappoint you. Britain is not a big net payer in the EU, not even by a long shot. As a matter of fact, Britain is together with Finland on the borderline between paying and receiving payment.
If you crack it up to payments per inhabitant, every British citizen pays 25 Euros each year for membership in the EU, while for example French citizens pay 48 Euros and the Dutch 162 Euros per citizen. And you don't hear them complain, do you? (the numbers are of 2005, btw.)
25 Euros each year for membership in the EU - people pay higher annual membership fees for being in far more useless clubs than that...
I really don't understand what it is with the British aversion against the EU: "We're most thankful for the benefits. But don't dare requesting something of us in return, because we will refuse". That is not how I define fair play, you know.
If you really have a problem with paying 25 Euros per year, consider it charity for helping less wealthy people in Europe, so you can spend your holidays or buy a holiday home at the Mediterranean (for which you do not have to go through customs or apply for a permit of residence anymore, btw.) within the same modern, lush environment and infrastructure, that you are used from home -- only with better weather
Germany's overwhelmingly positive attitude to the EU has natural causes. It's the same cause that make Angela Merkel the only european leader to side with Israel in the current conflict in the Gaza strip.
If you refer to the proverbal bad conscience of the German people due to the 12 year reign of terror over Europe, then I agree with you, that it played a role in the 1950's, when the precursor of the EU was created. The goal back then also was to bind Germany tightly into Europe, so it wouldn't be able to go berserk again in the future.
But frankly that is thinking from the past and we are nowadays above such considerations, with the second post-war generation at the rudder. There still seem to be a few countries who have reservations towards Germany but frankly that is mostly a lack of coming to terms with the past in those countries and therefore not our problem.
Of course historical considerations still play a role in everything that we do (and I suspect they always will), but their real influence in daily politics on a national and international level is getting weaker and weaker with each passing year. You could see with your own eyes at the soccer world cup in 2006, how much the public consciousness has changed in Germany, for the better, not the worse. Even the British tabloids were impressed -- and that means something
Germany's relationship with Israel, however, will always be a special one and I'm sure, that absolutely everybody can and will understand that.