Quote:
Originally Posted by Yoko Takeo
In terms of competition against other larger financial powers, namely the US, it can be a good thing if those countries using the Euro were acting as one nation. The fact of the matter is that the Euro, and the European Union at that, were created was to imitate the US, but the truth is that this can never happen. Each country in Europe has its own history and culture, unlike in the US where the states have been part of a union for much of US history. They can't work well together as the US states do, and this recent crisis in Greece is proof enough. Despite the Euro's presence, each country still has its own individual economy. The theory you presented is correct, but as we can see, it didn't work like that in practice considering nothing much has changed for the EU member countries except for maybe Germany after the Euro was introduced after all.
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Quote:
Originally Posted by Yoko Takeo
That's the difference between the US and the EU, you see. Each state in the US defers to a single government whose leader is based in Washington DC. The EU has no such leader, but simply a delegation of country representatives, each one with their own government. Like you say, other countries did not contribute to the Euro's strength, oftentimes because it couldn't. Take some countries like Slovakia, Slovenia or even Malta, all of which have adopted the Euro but don't exactly have much to contribute compared to Germany, France or Italy. You can't compare their productivity to bigger players in the Eurozone at all, nor do they have vast reserves of gold. Plus, each one has its own government rather than relying on a single governing body the way a (poorer) state in the US would. There's too much of a separation and individuality in Europe compared to the US.
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An interesting note is that this is a pretty unique situation being analyzed.
The contrast you are drawing between the US and the EU would not have applied before. Originally, the US operated much as the EU did, with powerful states and a federal government which was restricted to the regulation of intra-state affairs (of course, the federal government was also tasked with foreign relations and established limitations of state power, but I don't think those are too relevant for this discussion). The early US had an advantage of being
mostly English speaking, but cultures certainly varied, and the states lacked the communication advantages of today. The US operated in such a fashion, with one currency, for around a century's time before the federal government had usurped power.
Your argument does apply now, though, because it was
after the US federal government had usurped power from its states that the gold standard was dropped. In fact, most every other currency adopted by a multi-national federation/union/empire/etc has been gold-backed or had intrinsic value. A friend noted the Warsaw Pact as an exception to this (personal trade was not done everywhere with the common currency, but a common currency was used), but he also pointed out that the Soviet work to control the currency makes it a poor comparison.
The EU's combination of governance and economic system is a fairly unprecedented situation. Valuable lessons will be (and are being) learned here, if the world will pay attention.