It is a good idea for the House of Representatives to talk about the future of the euro ‘right now, in a quiet moment’. “The current geopolitical situation makes creating noise very expensive,” says macroeconomist Arnoud Boot. There’s also a lot to discuss, he thinks.
Ahead of the discussion in Parliament, De Nederlandsche Bank and Statistics Netherlands said that the euro has not always brought countries closer together. The currency has also caused divergence in the European Union.
“The euro as a purely economic element has not led to convergence, but this is a necessity for a union like the EU,” says Boot. “The euro was introduced for political reasons”.
According to Boot, the unification of Germany (1990) was at the root of the importation, as well as France’s desire to end the dominance of the deutschmark. ‘France wanted an accelerated introduction of the euro and also did not want to become the weakest member of the eurozone. That’s why the southern European countries had to join right away.’ With the euro, the countries within the European Union had to move closer. “Finless hope,” thinks Boot.
The root cause of this mostly lies with national governments, he thinks. “Being part of the eurozone comes with moral responsibilities. You have to implement structural reforms that make you stronger.’ Too little came of it, says Boot.
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Spain, Portugal
“You can discuss Spain and Portugal. Those countries have certainly made progress, but not enough.’ According to Boot, the question is whether “Brussels” played the right role. “As a monetary union, you should actually have a political and fiscal union as well.” And that requires more power for the European Commission.
Boot makes a comparison with the United States. “The state of California cannot and will not get out of the dollar. If that were to happen, every state would be dragged along with it.” But EU countries are not ready for a European political union. ‘The constant question within the EU is about the balance of power between national governments, the European Commission in Brussels which lacks support and the European Central Bank which is forced to ‘hold it all together’.
Scrambled eggs
According to Boot, this is culturally and emotionally driven. “You have to see Europe as something you want to belong to,” she says. An American returning to his country after a long hostage-taking will say, no matter what state he lands in: ‘I am happy to be back in the greatest country on earth. A European would never say that.”
The euro is here and cannot go away. ‘It’s a scrambled eggsYou can’t make an omelette out of it. This is’. That’s why more attention should be paid to what connects us, thinks Boot. And then he mainly concerns pan-European issues such as, for example, railways and banks. ‘We are still faced with a financial system in which national banks exercise great influence over national governments. This is asking for trouble. Where is that pan-European capital market?’
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
