Depending upon which side of the coin you are on, the euro has either been the best thing to happen to Europe since the end of the Ottoman Empire or the worst thing since the great pandemic of the bubonic plague.
Let us overlook for a moment the loss of fiscal sovereignty of some 19 nations and the gain of a debt-laden de facto capital which is Brussels. Statistically speaking, the size of the euro-area economy has expanded by 72 percent to 11.2 trillion euros ($12.8 trillion), second only to that of the U.S. and attempting to position the European Union as a global economic force. The attitude to this idea is twofold: governments advocate the introduction of the European currency, and the population, looking at neighbors, is afraid of rising prices. As a result, nations like the Czech Republic and Hungary have not yet decided on the date of accession to the euro area.
The single currency swung from $0.83 in 2000 to $1.60 before the 2008 financial crisis.
As Brussels and its other partner governments in the euro exude confidence and predict strength in economic growth as a holistic body, the populists that are the people are not so sure. Today the prospects for the entry of new countries into the euro area look vague at best, and the general state of the European economy is increasingly pushing residents of various EU countries to increase separatist sentiments. While celebratory plans are being prepared in Brussels, many in Europe lament the euro. Any American who has traveled to the southern portion of the Eurozone in late summer will tell you that it is hardly New York City, where most are on holiday for the better part of the month. Our hedge fund crowd at least pretends to work by bringing laptops to the Hamptons.
With roughly one-fifth of the youth in the Eurozone unemployed, not everyone will be ringing in the anniversary. That is twice the number of the UK, whose portmanteau of “Brexit” is defining the impending withdrawal from the EU. Former minister Mark Francois said, “It is ironic that these top officials want to pop champagne corks to celebrate a currency which has caused so much misery across parts of Europe. Evidently feelings are divided.
The genesis of the single currency was always more than financial, as Europe struggled for a solution to coexist after two world wars. If the euro is to survive, it will be because of the economic tail wagging. People who are working and have positive sentiment will bode well for its existence. One would imagine the last has not been seen of sovereign debt crises within the Eurozone. This will again test the populous and their faith in the currency.
Be careful what you wish for, those of you who are democratic socialists. Take a good look into the Eurozone and decide if the U.S., Canada, Mexico and the economic powerhouses of Central American should join as one. Bernie Sanders et al. salivate like a Pavlovian puppy twenty-four/seven dreaming of such a state. As in Europe, our future sovereignty reigns with the populous. As those American heroes who witnessed the disaster of the European wars pass, one must be careful of the fifth column who will use “newspeak” to rewrite the history books.
Don’t let them.