# Euro in best interest of Europe?



## oblib (6 Feb 2007)

I think the Euro has loads of benefits but I was curious if anyone thinks that the single european currency could have long term adverse effects?

Before companies located facilties all across Europe to spread currency fluctuation risk. Now, they simply need to locate in one low cost country to get more of an advantage as the currency is no longer a variable.

Although other large countries exist on a single currency - is the European economy too varied to have its own? Ireland acheived so much economic success for many reasons but a major factor was the success of the US economy about the same time. However, while Irelands economy is following one cycle, the ECB and the rest of Europe are in another.

In my opinion this current property market inflation never would have been possible back on the pound.

Any thoughts?


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## Superman (6 Feb 2007)

Low interest rates for a booming Irish Economy weren't very good in hindsight.
Also lack of control over interest rates as debt levels go out of control isn't great either.


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## Nermal (6 Feb 2007)

Article from the free section of the Economist on this topic:

http://www.economist.com/finance/displaystory.cfm?story_id=8601486

Proposes a model where countries experience more pronounced economic cycles that cannot be controlled properly through monetary policy. So when one area of the eurozone is doing well, some others are out of step.


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## Stiofan (7 Feb 2007)

Interesting article but nothing new. I think the fear of effectively tying our hands behind our backs in entering the Euro has always been there but was offset by the idea that if your not in you can't win.

Interestingly it was originally thought that the common market would bring about a convergence of market dynamics between the member states in which a common interest rate could be applied effectively. Now I know we are only a few years down the road but I wonder if anyone would be of the opinion that any headway has been made in this regard?


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