Comments on: ‘No Reason Why Greece Could Not Have Two Currencies’ – A Euro Architect

By: Roberto

Roberto — Mon, 06 Jul 2015 02:13:28 +0000

Champ, Germany today, France (or French interests) 20 odd years ago. I agree wholeheartedly about your comment about politicians and their national interest, therein mine about a common fiscal policy. It will not mean hands-off, but should make the former more difficult to stay front and centre.
Was a trader for 20 years in Europe staring during the 80’s and lives with the national ccies. National interest were manipulated through ccy devaluations many a time. The Euro stopped that but, without a common fiscal and monetary policy (and I don’t mean the sales pitch policies we have heard the last few years – even pre 2007), politicians find a back door – that’s what they do. If there is one thing I hope comes out of this debacle is that, the realization that the Eurozone has to take the next step started back in ’58 with the Treaty of Rome.
It won’t be easy, but these decisions never are.

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By: Champ

Champ — Sun, 05 Jul 2015 21:19:13 +0000

Roberto,
The fiscal policy is oe of the component but I am not sure that this the central problem today. In the US you have a federal tax and local tax with a wide rang of local tax.
The problem maybe is also the fact that politicians continue to protect their country and not Europe.
The german are totally responsible of this crisis. Angela Merkel is in fact a week leader not the strong leader she believes to be. Germany is really palying a dangerous game.

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By: Roberto Vargas

Roberto Vargas — Sun, 05 Jul 2015 20:15:03 +0000

What I continue to find of interest is the acknowledgement (agreed, very subtly) that the Euro was created on political and not fiscal factors (common policies). The mantra that the latter is far to difficult to reach due to the varying economies involved (political interests) only reinforces the need to apply them. Until that issue is resolved (correctly) we’ll continue to have the risk(s) resulting from national political interests, and effects such as the ones presently discussed.
As regards not having considered the option of a country leaving the euro, I refer to the old adage of “rules were made to be broken”. Two currencies? Sure, and then what? Does that solve the actual issue? Don’t think so.
As far as I recall from my Economics studies, the different stages undertaken from the days of EFTA lead to a United States structure (for those that want to participate). Ever seen one (that works to a reasonable degree) without a common fiscal policy?

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By: Champ

Champ — Sun, 05 Jul 2015 10:02:51 +0000

I’m amazed by the (no)answer of Mr Lietaer who was involved in the Euro construction. He is choosing the Swiss Franc and the British Pound as example of two international recognized currencies. In the present case with Greece it is absolutely not the same kind of situation regarding the current balance of the country and the position of a potential greek currency in the international money market. All countries excepted the US are working with 2 currencies: their currency and the USD. then I am not sure to really understand the explanation, because the USD was the international reserve currency but Euro is starting to be a second one even if European people don’t really understand this point and even if a lot of mistakes are included in the Euro system.
The second point I wanted to mention is the political aspect of the situation regarding Europe (and not only the Eurozone) and the international situation in not so far countries (Syria, Irak …). Before to accept that Greece could leave Eurozone and then Europe we have to deeply think about that. It is not only a question of the name of a currency. Greece in or out, the price will be quite the same but not the consequences.

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