Blessings of the Euro
In the Netherlands some political parties say we should not whine about the financial burden of the Euro-crisis because each of us earns 2,000 every year on the Euro. Like always that is hardly the truth. Yes we earn approximately that amount on trade within the European Union (EU) but that is not due to the introduction of the Euro. We benefit from our involvement since 1958 when six countries: Belgium, France, West Germany, Italy, Luxembourg and Netherlands founded the ECSC; the predecessor of the EU.
We, the Dutch, are happy with almost all the treaties of the EU like Shengen and those that allowed free trade. We embrace the long standing peace between all states of the EU since WW II. We are grateful but that doesn't change the fact that many people opposed the Euro. We don't know exactly what percentage because politicians didn't want to hold a referendum.
I myself was opposed but wasn't allowed to vote on the matter, which is rather undemocratic when you consider the importance of the issue involved. Free-market, free-trade, free-travel, free ….. are issues which are consistent with wishes of all the people in Europe. However when you take away the currency the culture of your country is influenced and that is a different matter.
First the advantages of the Euro versus the local currency. They are limited. For citizens who go abroad the difference is you pin Euro's instead of the local currency. In principle you have lower costs but that advantage was annihilated because the banks were compensated for the loss of income on currency conversion; they raised the general expenses. The other advantage is that you can easily compare prices. Wow!
Now to the benefits of trade. Again they are quite modest because the banks were compensated for the loss of income. But you have to admit it is a bit more easy for businesses; you do not have to buy currency and hedge risks. However with the complete computerized administration nowadays this edge is modest.
According to politicians the growth of the national income would significant be higher for those who accepted the Euro in 2000 opposed to those who didn't. Now 12 years later there is no indication at all that countries like Denmark, Sweden and the United Kingdom, which didn't introduce the Euro, have a lesser growth the past 10 years. According to Euro-stat the average real GDP growth rate-volume of the Euro-zone was 1.2% over the last 8 years up to 2010 while for the United Kingdom, Sweden and Denmark the average growth was respectively 1.7%, 1.2% and 0.6%. When you take the expectations of Euro-stat for 2011 and 2012 the growth in the non-Euro countries is better.
The disadvantages of the Euro have been and will not be neglect able; all countries have to pay for the Greek debacle. The reason why Greece and other southern European countries get in trouble is to be found in the difference of cultures. The abolition of the national currencies took away the instrument that could compensate for contrast in perception.
Within the Euro-zone the Mediterranean way of life of the Greek had to compete directly with the disciplined German culture. We know the outcome and that would not have happened with the Drachma still in place. It is questionable whether Greece in the future, when 50%-60% of their debt is let of, is capable to adapt to the discipline of the northern European countries. Italy, Spain and France have like any country a different culture and we see that these countries also have much more trouble to adjust to strict budgetary standards. The Euro doesn't allow countries to implement their own cultural determined policies.
The back-and-forth of my argumentation why the Euro should not yet have been introduced is that the Dutch and many other nations have a certain respect and compassion for others. We have the perception that fellow citizens should be respected and be able to live a life worthy of a human being even if they are less educated, have a different culture, other appearance or background.
The abate of the local currencies deprived governments of the possibility to follow their own cultural determined social strategy. The country with the lowest wages, lowest social facilities and lowest healthcare wins the capitalists battle and forces other countries to adopt the same strategy.
The past 30 years the capitalist mentality has gradually gained ground and hardened society. There is a lot of space between the philosophy of socialists and capitalists. I personally do not feel comfortable seeing people unnecessary suffer and specific not in my own country; it doesn't make me feel good. This doesn't implicate I'm a socialist or that I'm not selfish.
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