In light of recent events, I figured I'd do a blog about the rather silly business of the Euro.
Firstly let me start of by saying that a shared currency isn't always necessarily a bad thing, it's just that the Euro expanded over too wide and economically diverse an area. I could completely see the argument for a United BeNeLux currency or the creation of an Iberian Dollar as these are smaller areas enabling for the benefits of easier trade without creating the problems of having to attempt a one size fits all approach to monetary policy across an entire continent, the problems of which are being experienced in Greece and Ireland and will be experienced again next time there is a major recession.
Those who say that the collapse of the Euro would have major negative effects for both the Eurozone and Britain are of course correct, I'm not going to lie about that as it would be silly, but in the long run its better for everyone if the currency is ditched and national currencies/regional currencies are (re)instated. This would allow for monetary policy to be tailored to the specific economies as well as hopefully shaking of the disturbing trend in the activities of the EU. This trend is the way that many seem to think that prefixing something with "European" automatically makes it a good thing regardless of the actual facts, similar to how in Maoist China "redness" was seen as more important than being productive or efficient.
Despite the fact it would be better for everyone in the long run, the Eurozone won't collapse, as too many powerful people have too much political capital invested in the idea that the European Union is the solution to every policy objective and so German taxes will continue to prop up Greece, then Spain, Italy and Portugal. However I would say that even if the Euro does survive, then I would advocate them trimming the fat, by which I refer to the PIGS. (Portugal, Italy, Greece and Spain, not actual pigs, although the actual EU farming policy is in dire need of reform, but that is an issue for a different blog.)
However I must concede that now is probably not the best time for either a dismantling, or at least trimming the membership of, the Euro and that waiting until the global economy has stabilised is preferable.
So in summary what they should do is start planning for the abolition of the Euro, with an aim to do it once the global economy is stable, if however they don't want to do that then they should at the very least cut the membership down, its better for everyone if Portugal, Spain, Italy and Greece revert to the Escudo, Peseta, Lira and Drachma respectively, and would you believe I only had to look one of those up? (It was the Portugese one)
No topical quote today, I couldn't find a decent one on the Euro. So here is something completely different.
And I feel just like Sigourney Weaver when she had to kill those aliens and one guy tried to get them back to the earth and she couldn't believe her ears. - John Grant.