Is this the beginning of the end for the Euro?

bbe · Apprentice Joined: 10 Jan 2005 Posts: 158 Location: UK

There's a lot of talk about the strains in the Euro-zone economies due to the large deficits in some countries, especially Greece. With uncertainty of a EU (read German) bailout and possible involvement of the IMF I'm not so sure this is going to end well for the Euro.

As bad as the UK economy & public finances are, I'm sure they would be a hell of a lot worse had sterling not depreciated against other currencies early in the crisis.

The Earth · Posted: Tue Feb 09, 2010 7:24 pm Post subject:

Thanks for reminding me, I have a few hundred euros I need to exchange... I should do so before the rate plummets.
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zixnub · Posted: Tue Feb 09, 2010 7:44 pm Post subject:

It's not the end of the euro. It's value is measured by it's demand which in turn is subject to the confidence in the currency. So far euros > dollars and a while back it used to be the other way. It has to go really really bad before anyone would consider changing.
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pjp · Posted: Tue Feb 09, 2010 8:02 pm Post subject:

Would it really kill off the Euro, or would the problem nations just lose membership in the EU?
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The Earth · Posted: Tue Feb 09, 2010 8:06 pm Post subject:

rgk · Posted: Tue Feb 09, 2010 8:52 pm Post subject:

well lets hope not, i still got a decent amount of cash in euros when it was $1.40 for a euro.
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Dr.Willy · Posted: Tue Feb 09, 2010 9:32 pm Post subject:

pjp · Posted: Tue Feb 09, 2010 9:40 pm Post subject:

cokehabit · Advocate Joined: 23 Apr 2004 Posts: 3302

energyman76b · Advocate Joined: 26 Mar 2003 Posts: 2005 Location: Germany

first of all - Greece should have never been part of the Euro zone. They lied and they betrayed to get in. They should be kicked out. But second, they already have made plans that have been approved.

So nothing to worry about. If the situation really becomes critical, we just sell the US-Bonds and Dollar reserves. After that the Euro will be the only stable currency left.
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cokehabit · Advocate Joined: 23 Apr 2004 Posts: 3302

for OP: Doom mongering about the Euro is a sure-fire way to know that you've been speaking to UKIP.

The fact is that the Euro has been the most stable currency in the past 5 years, that is before, during and (will probably be) after this recession. The larger your economy, the bigger this recession hit you. The Euro was helped by the smaller economies stabilizing it - to an extent of course.

energyman76b · Advocate Joined: 26 Mar 2003 Posts: 2005 Location: Germany

pjp · Posted: Tue Feb 09, 2010 10:48 pm Post subject:

energyman76b · Advocate Joined: 26 Mar 2003 Posts: 2005 Location: Germany

Naib · Posted: Tue Feb 09, 2010 11:05 pm Post subject:

lol so every country/currency has been rocked by the recent "credit crunch", the UK and US are verging on losing their AAA status, the amount of debt the Dollar is support is getting ridiculous but hey it is the euro that is in trouble

lmao nice attempt at distraction from the real problem
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cach0rr0 · Posted: Tue Feb 09, 2010 11:11 pm Post subject:

Germany has been more or less single-handedly propping up the Euro.
This has been something economists have worried about for a considerable amount of time. Supposedly countries' financial systems have to be in a certain state of stability in order to be able to adopt the Euro, but as I understand it the enforcement of this was loosened up from the get-go just to get more countries on board. It's been a concern for a long while that Germany would not be able to sustain this indefinitely, and the progress from other adopters has been less than impressive.

And stop bringing up the idiotic discussion of exchange rate, virtually everything in international finance is still backed by the dollar. Its value compared to the Euro or Sterling is irrelevant - it is seen as a relatively stable currency that is unlikely to suffer from huge fluctuations, so it is STILL used for backing most international trade (even within EU member nations that've adopted the Euro)

EDIT: An interesting discussion of the matter here - http://www.economist.com/blogs/freeexchange/2010/02/safety_dollars

And as it pertains to the UK here - http://krugman.blogs.nytimes.com/2009/04/24/a-quick-note-on-britain/

big dave · Posted: Tue Feb 09, 2010 11:15 pm Post subject:

energyman76b · Advocate Joined: 26 Mar 2003 Posts: 2005 Location: Germany

cach0rr0 · Posted: Tue Feb 09, 2010 11:19 pm Post subject:

energyman76b · Advocate Joined: 26 Mar 2003 Posts: 2005 Location: Germany

so? that article shows and proves nothing. Oh wait, yes it does. The Euro is still a lot stronger than 10 years ago. Hmmm.. even in a 'crisis' it is strong.

And compared with the huge deficit and the complete ownership of the USA by foreign countries - the only reason the Dollar has not combusted is the fear of policy makers to loose some of their money.

It is not a question of 'if' but a question of 'when' will the dollar collaps.
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cach0rr0 · Posted: Tue Feb 09, 2010 11:48 pm Post subject:

energyman76b · Advocate Joined: 26 Mar 2003 Posts: 2005 Location: Germany

wrong. The Euro does not depend on Germany. You are underestimating the other 'core' countries. Like France, Italy, Netherlands ...
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cach0rr0 · Posted: Wed Feb 10, 2010 12:06 am Post subject:

cokehabit · Advocate Joined: 23 Apr 2004 Posts: 3302

The Euro isn't dependent on Germany. France, Netherlands, Spain, Italy; they all have big economies

Dr.Willy · Posted: Wed Feb 10, 2010 12:54 am Post subject:

So apparently a European/German bailout plan[1] for Greece is in the works.

[1] Welt.de (german)