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Are you looking forward to changing to the Euro

Benefits and problems from the EU membership.

Postby Kifeas » Sun Sep 16, 2007 7:19 pm

observer wrote:I've posted this elsewhere, but it seems correct for this thread too.
Enjoy your moment, all you apostles of the euro: this is as good as it’s doing to get. The accession of Slovenia last month brought membership of the single currency to 13, and I’m willing to bet that that’s as high as it’ll ever go.

A survey in the Financial Times this week showed that, throughout the euro-zone, large majorites hanker after their old currencies. The nostalgia is keenest at the Union’s core: nearly two thirds of Germans oppose the euro. The FT made no attempt to disguise its contempt for the doltishness of the common man. Its report began: “The euro-zone economy may be growing robustly, but its citizens appear not to expect significant financial gains as a result. They give scant credit to the eight-year-old euro for improving their national performances, an FT/Harris poll shows…”

But it’s not just the polls. Millions are simply opting out. A chunk of Bavaria is issuing its own money, while shops from Italy to the Netherlands have started to accept their former currencies, to the delight of their customers. Suddenly, the question is not who will be the next to join, but who will be the first to leave. In anticipation of a collapse, Germans are being advised to hang on to euro notes beginning with serial number “X” (which, apparently, indicates that they’re issued in Germany) and to ditch those beginning with “S” (issued in Italy).

Amazing how quickly something can go from being inevitable to being unthinkable. Eight years ago, most commentators assumed that the three recalcitrants – Britain, Sweden and Denmark – would have to join sooner or later. But guess which of the then 15 EU states have since enjoyed the highest growth rates? That’s right: Britain, Sweden and Denmark. As the Americans say, go figure.

I see this only just now …what a pile of nonsense!
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Postby Kifeas » Sun Sep 16, 2007 7:26 pm

miltiades wrote:
humanist wrote:Miltiades why are Greek speakin Cyps in UK called charlies?

Andreas , the UK Cypriots are commonly referred as Charlies , I think its an innocent funny way to describe us. Many of us leave our selves wide open when visiting Cyprus by exhibiting "Charley tendencies " ie mixing Greek and English and sounding quite funny. My older brother does that a lot , I do not , I speak either one or another , plus I very rarely compare "things" in Cyprus and "things" in England , quite common amongst Charlies .

There isn't much to compare anyway, between bright blue and gray /dark skies! :lol:
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Postby CopperLine » Sun Sep 16, 2007 9:05 pm

A few comments on the Euro and currencies :

If prices rise in the period of conversion to the Euro this is NOT because of the Euro but largely because sellers are exploiting the confusion of customers or their inability to make a quick conversion calculation. Most people when they buy with a foreign or unfamiliar currency only do a very rough conversion, rarely to a couple of decimal places. So vendors exploit that by rounding up. The second point is that vendors might take the opportunity of currency changeover to make price increase that they were going to do anyway. The overall point is that introduction of the Euro per se is not the cause of price inflation.

Another thing that needs reminding is that the introduction of the Euro and the expansion of the EU - both in membership and in depth - are not necessarily connected. For example, while there now 27 states in the EU, there are currently only 13 states that have adopted the Euro. So even though the European Central Bank (ECB) was created out of the Maastricht Treaty it is not subject to direct management by the Commission. In fact the relationship between the EU and the ECB is clear :
Neither the ECB nor the national central banks (NCBs), nor any member of their decision-making bodies, are allowed to seek or take instructions from European Community institutions or bodies, from any government of an EU Member State or from any other body.

Community institutions and bodies and the governments of the Member States must respect this principle and not seek to influence the members of the decision-making bodies of the ECB (Article 108 of the Treaty).


In other words the EU in the form of the Commission does not directly determine monetary policy, that is the job of the ECB which is an independent institution.

The ECB's job is to :

According to the Treaty establishing the European Community (Article 105.2), the basic tasks are

* the definition and implementation of monetary policy for the euro area;
* the conduct of foreign exchange operations;
* the holding and management of the official foreign reserves of the euro area countries (portfolio management).
* the promotion of the smooth operation of payment systems.

For more details see

Nikitas has already mentioned the improvement in the euro-dollar rate which matches and in fact has exceeded the improvement in the sterling-dollar rate. It is a mistake to argue that it has been retention of sterling that has exclusively benefited sterling vis, the US doillar. The historical evidence doesn't support this claim. Broadly speaking I'm in favour of Euro expansion for the reasons that Nikitas outlined - it makes all sorts of exchanges immediately simpler. In the language of economists, a common currency lowers 'transaction costs'. The other obvious effect of a common currency is to more rapidly integrate the disparate parts of European society.

So, linking the Euro to improvement of the Cyprus problem, it might be argued that the most effective way of bringing northern Cyprus into the European and RoC ambit and break its economics and financial dependency upon Turkey is for TCs as inividuals and businesses to hold euro accounts and conduct business through euros. There's nothing that either TRNC nor Turkey could do about this and, for TCs hitherto unwilling to concede anything to RoC, the benefit would be that they'd be integrating with Europe as a whole rather than RoC in particular.

Any thoughts (on the last bit) ?
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