Tuesday, July 26, 2011

Trouble of monetary union

Trouble of monetary union

Was probably still people who believe that monetary union is almost a panacea cure all economic ills, but the EU experience has shown every observer that the monetary union could create more problems than it solved, if the varied economic efficiency and growth levels between countries with national sovereignty and a single currency.

It is unanimous that the abolition or consolidation of the customs tariff, and to find what leads to the facilitation of trade between nations such as the use of one currency, invoking the economic efficiency of the whole states of any monetary union.

But the difficulties «lies in the demons details» As the saying goes foreign.

Valmstrk between Germany and Italy - for example - is the euro, but not their common economic else, and the common civilization almost exclusively in the different doctrines of Christianity, France and Greece share the euro as the unit of exchange and measure the mass of cash for each of them, however there is between them a joint economic Another important, and even the common cultural little, if any.

There is no question that France is capable of Greece to provide the minimum services that must be provided, without exceeding its public debt predictor of inability to pay its debts, and, is more pronounced among Germany, which enjoys a strong economy is growing well proportioned and exports transcends and imports from the rest European countries are growing by less than the growth of exports, on the one hand, and other countries such as Greece, Portugal, Spain, Italy, on the other.

This is the most important demons details, ie, the apparent disparity between the ability of members of the monetary union to meet the most important requirements without the accumulation of public debt to the extent that tempt thieves, New York, bet on the inability to meet debt even higher proportion of service funding, resulting in escalating amounts of debt are not able to get more loans to meet the needs of the public.

The lifeboat Cyprus - as an example of state did not suffer much - of the problems of monetary union to date, they may return to the Cypriot economy derives about 80 percent of the income aggregate (or national) from the sale of services over the territory of Cyprus, and provide important services to the road transport sector and sea and air. Selling services to the foreign export of similar goods in the economic impact.

The countries such as Britain and Sweden have chosen to be members of the European Union Economic and declined to join the monetary union, why abstain?

There may be motivated due to historical reasons, as between the countries of Europe from the hassle, and even wars, but the most important reason is purely economic, the state that has absolute sovereignty in the control of the sovereignty of the monetary and financial not received «Dguenha to other» As the saying goes in Saudi Arabia.

Greece, Italy, Ireland, Spain, Portugal and other countries in the monetary union if each were issued by the currency used within its borders, a raised level of liquidity or «block» criticism, any amount of currency provided for circulation within it, to some extent increase the cost of imports and lower export prices for the importers outside the border, and increasing exports associated with the decline in imports, lead to increased economic growth rate, or increase the total income the year, which helps to «off» the proportion of public debt.

The different between Germany, a country that exceeded the industrial stage to beyond, combined with the transcendence of their productivity and expand the capacity of, and between them and the majority of countries of the European Monetary Union makes it is the biggest beneficiary of this monetary union, or short, than their competitive edge on the rest of Union states that it is Alahrs to try to resolve the financial problems faced by countries as close as possible to the industrial to the developing ones, such as Greece and Portugal, or semi-industrial such as Italy and Spain.

The problem of Ireland, most likely it belongs as well to give up its national currency to the other reason, is to leave its monetary cord free reign of the robbers New York to indulge their financial institutions and industrial debt even bet on the poor quality Fathqguet Theirs.
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