More and More EU Countries Are Rejecting the Euro

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More and More EU Countries Are Rejecting the Euro
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At the end of last year, Lithuania became the 19th country to adopt the euro amid speculation that it could be the last. Events in Greece since then haven’t exactly increased enthusiasm for the common currency. As the *New York Times *reports today, interest in euro adoption is flagging among the EU’s newer members, mainly in Central and Eastern Europe. The prime minister of Poland, once one of the most enthusiastic proponents of European integration, has said that euro adoption is probably at least five years off.
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 Technically, adopting the common currency is a mandatory condition of  EU membership. Britain and Denmark received special opt-outs when they  joined. Sweden is “[living in sin](http://www.ft.com/intl/cms/s/0/a0ca35e0-54f9-11e3-86bc-00144feabdc0.html#axzz2ozU0vO00),”  having no plans to adopt the currency despite having joined the union  in 1994. That leaves Poland, the Czech Republic, Croatia, Hungary,  Romania, and Bulgaria as countries that are technically obligated to  adopt the euro once [convergence criteria](http://ec.europa.eu/economy_finance/euro/adoption/erm2/index_en.htm)  are met. Theoretically, all plan to eventually join the euro, but  there’s no hard deadline, and given the Greece experience, none are in a  particular hurry.
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      The Czech Republic’s finance minister [recently proposed](http://www.wsj.com/articles/czech-finance-minister-proposes-referendum-on-the-euro-1433102215)  holding a referendum on euro membership. The vote would be  nonbinding—the country is still obligated by treaty to eventually move  toward currency convergence—but as I noted earlier this week, the [euro has lost](http://www.slate.com/blogs/the_slatest/2015/07/13/the_eu_s_democracy_problem_nbsp.html)  every time it has been put to a vote, and such a vote could give the  skeptical Czech government cover to simply put euro adoption on  permanent hold.
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There are sound economic reasons for some of the new skepticism. Poland avoided recession during the worst days of the European downturn and has come out of the crisis as one of the continent’s most dynamic economies in part because its currency, the zloty, was allowed to depreciate, making exports more competitive. But some of the doubts about the euro are linked to the growing political appeal of euroskepticism: Hungarian Prime Minister Viktor Orbán’s speeches comparing Brussels bureaucrats to Soviet apparatichiks have been a hit with voters.
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Sounds about right to me.
 
While skepticism of the EU is rife currently, owing to the Greek difficulties; remember that it is only 23 years old, and having to work around centennially independent traditions, institutions and mindframes.

To put this in perspective, there was plenty of European skepticism of the USA in 1799, despite it having far less baggage to overcome.

ICXC NIKA.
 
didymus said:
Slate:

Sounds about right to me.
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The headline is a bit misleading, nowhere in the article is there language that describes rejection, wholesale or piecemeal, of the euro. There is some language about skepticism, that was all I read in the black part.
 
GEddie said:
While skepticism of the EU is rife currently, owing to the Greek difficulties; remember that it is only 23 years old, and having to work around centennially independent traditions, institutions and mindframes.

To put this in perspective, there was plenty of European skepticism of the USA in 1799, despite it having far less baggage to overcome.

ICXC NIKA.
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Very good point 👍
 
sps49 said:
The headline is a bit misleading, nowhere in the article is there language that describes rejection, wholesale or piecemeal, of the euro. There is some language about skepticism, that was all I read in the black part.
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It’s about non-eurozone countries deciding that joining euro is not worth it.

Given the terms of Greece’s deal with creditors (see my post above), it’s now clear that accepting euro would be madness. Greece will be be literally torn up, pieces seized by creditors (i.e. Germany), and Greek people put in permanent debt slavery to their German masters:
  • on energy markets, proceed with the privatisation of the electricity transmission network operator (ADMIE), unless replacement measures can be found that have equivalent effect on competition, as agreed by the Institutions *
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  • on labour markets, undertake rigorous reviews and modernisation of collective bargaining *, industrial action * and, in line with the relevant EU directive and best practice, collective dismissals *, along the timetable and the approach agreed with the Institutions *
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On the basis of these reviews, labour market policies should be aligned with international and European best practices, and should not involve a return to past policy settings which are not compatible with the goals of promoting sustainable and inclusive growth *
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  • adopt the necessary steps to strengthen the financial sector, including decisive action on non-performing loans * and measures to strengthen governance of the HFSF and the banks *, in particular by eliminating any possibility for political interference especially in appointment processes. * On top of that, the Greek authorities shall take the following actions:
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to develop a significantly scaled up privatisation programme with improved governance; valuable Greek assets will be transferred to an independent fund that will monetize the assets through privatisations and other means * The monetization of the assets will be one source to make the scheduled repayment of the new loan of ESM and generate over the life of the new loan a targeted total of EUR 50bn of which EUR 25bn will be used for the repayment of recapitalization of banks and other assets and 50 % of every remaining euro (i.e. 50% of EUR 25bn) will be used for decreasing the debt to GDP ratio and the remaining 50 % will be used for investments * This fund would be established in Greece and be managed by the Greek authorities under the supervision of the relevant European Institutions * In agreement with Institutions and building on best international practices, a legislative framework should be adopted to ensure transparent procedures and adequate asset sale pricing, according to OECD principles and standards on the management of State Owned Enterprises (SOEs) *
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The Greeks like the Euro so much that in Athens tonight they threw Molotov cocktails and bricks at riot police outside Parliament. Almost midnight and still no deal in Athens. Hope we see something historic tonight.
 
Seamus_L said:
The Greeks like the Euro so much that in Athens tonight they threw Molotov cocktails and bricks at riot police outside Parliament. Almost midnight and still no deal in Athens. Hope we see something historic tonight.
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Greece is split between those who like the euro and those who want to return to the drachma.
 
weller2 said:
It’s about non-eurozone countries deciding that joining euro is not worth it.

Given the terms of Greece’s deal with creditors (see my post above), it’s now clear that accepting euro would be madness. Greece will be be literally torn up, pieces seized by creditors (i.e. Germany), and Greek people put in permanent debt slavery to their German masters:
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Suggesting that the idea that this is a general problem is not supported by the facts. Greece is where it is at due to it’s own internal problems with money that spans it’s entire existence. It is a specific problem unique to Greece.
 
sps49 said:
Suggesting that the idea that this is a general problem is not supported by the facts. Greece is where it is at due to it’s own internal problems with money that spans it’s entire existence. It is a specific problem unique to Greece.
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Spain and Portugal are having financial problems.
 
If memory serves, Germany fought (and lost) two wars last century to establish hegemony in Europe. Greece seems to show that the Germans may have achieved their aims though other means.
 
PietroPaolo said:
If memory serves, Germany fought (and lost) two wars last century to establish hegemony in Europe. Greece seems to show that the Germans may have achieved their aims though other means.
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There is nothing wrong with a country having a strong, productive and egalitarian (Germany has a social market system) economy, such that it becomes the preeminent power in a region peacefully. Germany is a civilian power that is practically pacifist. The Germans agonize over sending troops abroad on aid missions they are so fearful of militarism. I actually have great admiration for modern Germany, especially when one considers what it evolved from 70 years ago.
 
Vouthon said:
There is nothing wrong with a country having a strong, productive and egalitarian (Germany has a social market system) economy, such that it becomes the preeminent power in a region. Germany is a civilian power that is practically pacifist. The Germans agonize over sending troops a broad on aid missions they are so fearful of militarism.
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Germany may be pacifist now, but of course, Germany is now an occupied country . It has not been pacifist in the past.
 
PietroPaolo said:
If memory serves, Germany fought (and lost) two wars last century to establish hegemony in Europe. Greece seems to show that the Germans may have achieved their aims though other means.
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Indeed.

Helmut Kohl achieved what Adolph Hitler failed at – united Europe under Geman rule.
 
I wish America would adopt Europe’s economic policies. I mean, it’ll be Utopia if that ever happens here.
 
weller2 said:
It is a general problem, it just happens to be most accute in Greece:
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It would indeed appear like an acute case of a general condition if one were not informed of the previous history of fiscal mismanagement of Greece since it’s independence.
 
I really don’t see the benefit of joining the euro (as opposed to the EU) for smaller, tourism & export based economies. When times are tough the only move for them is depreciating their currency which they can’t do if Germany is running the show.
 
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