Arthur Cordell wrote: > Chris' original point was whether it was a good idea to introduce a single > currency into a number of jursidictions which formerly had their own > currencies and levers for monetary policy tailored to local needs. > > Going the other way, would the fifty states of the US be better able to > manage local affairs if there were 50 different currencies. What is gained > and what is given up. I gues it is all about trade-offs.
The basic difference is that the US is a political unit (with a century-long common history as one country) whereas the EU is 15 different countries with different goals, histories and fiscal, monetary and wage policies. A currency unit without political harmonization *first* is doomed to fail. Over the years, Brussels had to realize that the political harmonization can't be achieved, so they rushed to impose a currency unit from above. They have it backwards, but the people (who are against the Euro) will pay the price (literally). Also note that it's a half-baked idea anyway, because 3 EU countries do not participate in the so-called "single" currency, and this will get worse with the EU expansion to the East (which can join the EU before they are ready to join the EMU). More evidence that the political unit has to come *before* the monetary unit. Time is not yet ripe for the former, and thus even less for the latter. (And given the structures of the EU, time may never be ripe for the former anyway...) Chris
