Euro withdrawl?

[Paul22118]

Here is a thought expressed by a clear thinking guy in the pub last night.

'What could happen if all those countries in the Eurozone, strong, weak or indifferent, were given the option of withdrawing at a sensible pace with as much damage limitation as possible. That would leave the Merkels of Europe IN and the Greek types OUT. Could we as a collection of trading partners then get our act together or would it definitely fall to pieces and be irretrievable? It is pre-supposed that this would be difficult and painful, but is this a way forward?'

[ichkeria]

Hardly: the Greeks don't want to leave the Euro (hence the prevarication over the referendum) and neither, I would bet, do any of the other "Greek types" you are referring to.
There's an excellent article by Will Hutton in last week's Observer making a very solid and sound case for the EU, the Euro and Britain's future membership of both.

[jno]

I'm not sure what you mean by "we" as Britain isn't in the euro - do you mean the EU itself? It's possible that if all the wobblier countries left the euro you'd be left with a hard core of fiscally responsible northern European countries still using the euro. They would probably form a bloc that would dominate the EU rather more than they do now (and Britain would therefore be weaker in the EU than it is now.)

Others will probably speculate about different outcomes, though.

[jake-the-peg]

They don't want to

70% of Greeks want to stay in the Euro same in Ireland,france and Germany.

The stronger countries like Germany have had huge trading advantages from the Euro , that's why they're going to such lengths to support Greece.

The weaker coutries have benefited from the monetary stability it brings.

If Greece leaves the Euro without taking the bail out they will default on their loans nobody will lend them any more money (would you?) they'll run out of cash in weeks - they won't be able to pay the police, health workers, bin men etc. etc. and they will have to print Dracmas like they were going out of fashion.

Result hyper inflation of the Dracma and people will continue using the Euro inside Greece.

Already people are emptying their bank accounts in Greece they don't want their money converted to dracmas

[jno]

"The stronger countries like Germany have had huge trading advantages from the Euro , that's why they're going to such lengths to support Greece."

Indeed they have - but in effect the advantage to Germany has translated into a disadvantage to Greece. Is it a bit late now for Germany to realise the risks of trade imbalances? Well, we'll see. Germans (as opposed to Germany) aren't that keen on bailing out Greece. Greeks (as opposed to Greece) aren't that keen on the austerity that will be required.

[jake-the-peg]

Yes well there was a lot of bad practice 10 years ago - a number of countries like Greece hadn't met the requirements of the Maastrict treaty but still got let into the Euro anyway.

Now people are paying the price of all that rule waving.

Interestingly enough - this is very similar to how Scoland became part of the UK.


They had bankrupted themselves in the Darien affair and England bailed them out and in doing so anexed Scotland imposing some very harsh conditions

Ironically a similar thing could happen here resulting in a much tighter Union in the Euro-zone on with more central spendinding decisions.

If that happens the UK would need to be careful that it's not left out in the cold.

You've already seen Cameron side-lined in these decisions. Much as it would cheer the little Englanders being sidelined and marginalised in Europe would be very bad for inward investment in the UK.

If you're in the far East and you want to set up a major European manufacturing centre like a car plant do you want to be on an island outside of the main European project or do you want to be on the mainland in the heart of Europe?

[Old_Geezer]

I'm unsure leaving a block of economies that prospered after adopting the Euro would make them more dominant in the EU. The Euro is but one EU project after all.

IMO it would help the UK if it stopped thinking of itself as weak and needing to look attractive to outsiders, and started building itself up instead. Besides if trading rules are properly negotiated the location in or out of the Eurozone would have but a small influence in a list of pros & cons considered by a potential investor. Wherever a product is created it still has to be delivered throughout the market.

[Old_Geezer]

"Could we as a collection of trading partners then get our act together"
Common currency only works if the whole group is singing from the same song-sheet, which, in effect, means that economic decisions are taken out of national hands and placed in the hands of the folk controlling the group. This is precisely what I do not wish to occur, I believe in a strong nation controlling its own economy within the global environment.

[jake-the-peg]

//Besides if trading rules are properly negotiated the location in or out of the Eurozone would have but a small influence in a list of pros & cons considered by a potential investor.//

How's that going to work then?

Cameron walks in and says we want all the advantages of the EU but don't want to pay any of the costs

And everbody says OK?

I work for a big US company - I can tell you they don't think "UK" they think "Europe"

If we wern't in Europe they wouldn't think "UK and Europe" they'd continue to think Europe.

The EU has a GDP lager than the US it's the most or second most important market in the world.

We *are* weak in comparison

the EU has a GDP of $15 trillion

the UK's is $2.3 trillion

No amount of positive thinking is going to change that

[mightyWBA]

I think we underestimate ourselves in the UK.
We alone are still in the top ten nations in the World by GDP and could survive without being in the EU quite easily.
With all the rules and regulations they throw at our industry and way of life we'd be better off without membership.
California's GDP is pretty good as well!
http://econpost.com/c...among-world-economies

[Davethedog]

WBA no we couldn't survive very easily outside the EU. I have commented on this many times much of our trading partnerships are within the EU, if we leave so do the partnerships.

Example Peugot have a factory in coventry, parent company gets (say) Doors and wheel trims made there employing 2,000 people. We leave the EU peugot shuts its factory and gives the work to Italy.

We make butter we have a trade agreement with the EU to buy "X" amount of butter per year, leave the EU who will buy the butter?

[jake-the-peg]

//With all the rules and regulations they throw at our industry and way of life we'd be better off without membership.//

That is an opinion without supporting reasoning or evidence

A bit more regulation on our banking system 5 years ago and we might not be in the mess we are now!

Without the regulation on airline competition you wouln't have budget airlines - they'd have been crushed like Freddie Laker was

Without the regulations on Mobile phones calls from abroard would still be ridiculously expensive.

European safety regulations have made cars much safer

Big corportaes don't like EU regulations because they generally make things a lot better for consumers like you and me and stop them from stitching up the market.

That's why they spend a lot of money trying to convince people that EU regulations are bad.

They are bad - for the likes of Murdoch

They are good for the likes of you and Me

[jno]

the EU was strong enough to take on Microsoft. I don't see Cameron doing that - not that'd he'd want to, of course.

[rov1100]

The young people of Greece are deserting the sinking ship in their thousands by moving to the rest of Europe and which could lead to a flood. It is possible to envisage the current population of 12 million reducing to 10 million within a year or two.

Greece is now a basket case and the sooner it leaves the Euro the less damage done.

Ig Germany had any sense it would leave the Euro and leave the rest to get on with it the best they can.

[Paul22118]

What a pleasure this has been to read sensible and balanced argument on a loose question posed here. ichkeria, no slight was meant by Greek types, I meant those countries that appear to be struggling i.e.Spain, Portugal, Ireland, Italy and Greece.
By referring to 'we' I mean that UK is still here trading whether we are using sterling or the euro. That is to say should those that are in euro peril gently ease themselves out and could Europe move forward in a trading and stability sense in the hope that the future could again be sound.

[Brenden]

davethedog, I thought the Lisbon treaty covered all EU members past and present to the EU trading partnership

[emmie]

davethedog, so you are saying that no one else would buy our butter, it can only be within the EU countries.

[Old_Geezer]

It should work very well Jake. In a deal both sides have things to gain and lose. No one opts to cut off their nose to spite their face.

[New Judge]

“I work for a big US company - I can tell you they don't think "UK" they think "Europe"”

God, jake, how many times are we to hear that? Four out of five US citizens don’t own a passport. I would imagine a similar number could not identify Europe, let alone the UK, on a map of the world.

Businesses invest and do business where it is most advantageous for them to do so. If the UK was not enmeshed in the pettifogging bureaucracy that is the EU it would be unbound by many of the ridiculous employment laws and regulations that spew forth from Brussels (or Strasbourg, if it is that time of the month) and would be far more competitiveand an attractive investment proposition than all the rest of Europe put together.

There is no reason to believe that the regulations upon which you heap so much praise would not be introduced if it was advantageous to customers. “European safety regulations have made cars much safer..” Yeah right. Manufacturers would not have made their vehicles safer (and so more attractive) but for the EU, would they?

“Big corportaes don't like EU regulations...”

“I work for a big US company - I can tell you they don't think "UK" they think "Europe"”

Err... so what’s it to be?

[mightyWBA]

Dave Peugeot closed their factory in Coventry years ago..They moved it to Romania I think.
We could survive outside of Europe quite comfortably,it's all about getting costs right.The EU does buy goods from countries who aren't in it!

[New Judge]

Quite true, mighty.

We don’t have an agreement with the EU for our butter sales, Dave. We have agreements with individual nations, some of whom happen to be EU members. Where do you think the countries that buy our butter will obtain it from if we leave the EU? Will they suddenly go without? Are they only buying it from us because we are in the EU? Of course not. Businesses buy their goods from wherever they can get the best deal.

Far too grim a picture is painted by Euro-maniacs of the potential disasters we might face should we leave. Many countries outside the EU fare perfectly well. They do business with customers and suppliers both inside and outside the EU. Trading agreements are fine. Federal bullying such as that experienced by Greece during the past few days, is most certainly not.