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talkpoliticsEnthusiasm for adopting the Euro among the newest EU members (those in East Europe) is waning. And that's understandable. For a long time, the Eurozone was deemed the Promised Land, but now things aren't looking that bright.
For example, the Latvian PM Valdis Dombrovskis has warned the EU that his people are turning against the European currency. There's now some considerable pushback against the plan to join the Eurozone in 2014.
Just 5 years ago (before the Euro crisis), everyone seemed to be more than eager to adopt the Euro, but countries like Latvia weren't ready. Now, when they're fully ready, they're skeptical about it. The Latvian government was among those that adopted the strictest austerity policies in Europe, in part to preserve the country's hopes for Eurozone entry. The official position of Dombrovskis' government is still that they're planning to join in 2014, but now they have to put tremendous efforts to hold that course.
And Latvia is not alone. In neighboring Estonia they know everything about crisis. After defaulting a few years back, they went through harsh austerity measures and they had a severe recession. But with perseverance and patience, they bounced back and eventually they joined the Eurozone last year. At present, Estonia is outgrowing the Eurozone. Similarly, Latvia is about to adopt the Euro after successfully fulfilling all requirements and doing quite decently in the economic department.
As for Bulgaria, another new EU member, similarly to Estonia they had hyper-inflation and they were compelled to hook their currency to the Euro in order to save themselves from implosion. Now Bulgaria is among the very few (actually 3) countries in the EU who are completely meeting all Maastricht criteria for being in the Eurozone, thanks to being exemplary in terms of fiscal discipline. But PM Boyko Borisov recently made it clear that they're not planning to do that final step towards the Eurozone any time soon. He said they don't intend to adopt the common currency, not before the Euro crisis is over, because they don't believe it's fair if the poorest EU country is forced to contribute money for bailing out countries that are many times wealthier. "We didn't cause the crisis, and neither should we save Europe from the crisis".
In Poland, too, the public push-back against adopting the Euro is mounting with the deepening of the Euro crisis. The government insists that the country could join the Eurozone only after it has fulfilled all criteria to the full, but more importantly, when "the Euro-zone becomes safe enough for all its members".
In neighboring Czech Republic, the Euro enthusiasm is even lower. The government doesn't intend to do any steps towards the Eurozone as long as it is in power (their term expires in 2014), and the year 2020 (at the earliest) is being mentioned. Plus, the issue has to be decided on a referendum. The Czech president Vaclav Klaus who's famous for his Euroskepticism has openly qualified the European stability mechanism as "monstrous and outrageous", and he says that he won't sign the amendment to the EU agreement that created the rescue fund for the Eurozone.
Now, of course it's natural to be wary of joining a system with no clear fiscal center, and one where the rules are being re-written as you go. On the other hand though, some of these countries already do have a currency board after having suffered major economic glitches, and this means their currencies are already tied to the Euro pretty closely. Which, in turn, means that these governments practically have their hands tied and they can't exactly have a blank check for carrying out policies of anti-cyclical, anti-crisis character without EU permission. They already have to comply with the fiscal and political tendencies as dictated by the leading Eurozone economies.
It's rather curious, though, that many of these "New Europe" countries have actually gotten the point much better than their "Old Europe" counterparts, and have taken the necessary measures to stop most leaks and seal the holes in their bucket to an extent good enough to allow them to outperform the Eurozone fiscally (if not economically). The irony is that it was the leading Euro-powers that used to constantly preach to East Europe; and now, like it or not, the teachers have to look for lessons from their students. It's funny how the wheel turns around.
For example, the Latvian PM Valdis Dombrovskis has warned the EU that his people are turning against the European currency. There's now some considerable pushback against the plan to join the Eurozone in 2014.
Just 5 years ago (before the Euro crisis), everyone seemed to be more than eager to adopt the Euro, but countries like Latvia weren't ready. Now, when they're fully ready, they're skeptical about it. The Latvian government was among those that adopted the strictest austerity policies in Europe, in part to preserve the country's hopes for Eurozone entry. The official position of Dombrovskis' government is still that they're planning to join in 2014, but now they have to put tremendous efforts to hold that course.
And Latvia is not alone. In neighboring Estonia they know everything about crisis. After defaulting a few years back, they went through harsh austerity measures and they had a severe recession. But with perseverance and patience, they bounced back and eventually they joined the Eurozone last year. At present, Estonia is outgrowing the Eurozone. Similarly, Latvia is about to adopt the Euro after successfully fulfilling all requirements and doing quite decently in the economic department.
As for Bulgaria, another new EU member, similarly to Estonia they had hyper-inflation and they were compelled to hook their currency to the Euro in order to save themselves from implosion. Now Bulgaria is among the very few (actually 3) countries in the EU who are completely meeting all Maastricht criteria for being in the Eurozone, thanks to being exemplary in terms of fiscal discipline. But PM Boyko Borisov recently made it clear that they're not planning to do that final step towards the Eurozone any time soon. He said they don't intend to adopt the common currency, not before the Euro crisis is over, because they don't believe it's fair if the poorest EU country is forced to contribute money for bailing out countries that are many times wealthier. "We didn't cause the crisis, and neither should we save Europe from the crisis".
In Poland, too, the public push-back against adopting the Euro is mounting with the deepening of the Euro crisis. The government insists that the country could join the Eurozone only after it has fulfilled all criteria to the full, but more importantly, when "the Euro-zone becomes safe enough for all its members".
In neighboring Czech Republic, the Euro enthusiasm is even lower. The government doesn't intend to do any steps towards the Eurozone as long as it is in power (their term expires in 2014), and the year 2020 (at the earliest) is being mentioned. Plus, the issue has to be decided on a referendum. The Czech president Vaclav Klaus who's famous for his Euroskepticism has openly qualified the European stability mechanism as "monstrous and outrageous", and he says that he won't sign the amendment to the EU agreement that created the rescue fund for the Eurozone.
Now, of course it's natural to be wary of joining a system with no clear fiscal center, and one where the rules are being re-written as you go. On the other hand though, some of these countries already do have a currency board after having suffered major economic glitches, and this means their currencies are already tied to the Euro pretty closely. Which, in turn, means that these governments practically have their hands tied and they can't exactly have a blank check for carrying out policies of anti-cyclical, anti-crisis character without EU permission. They already have to comply with the fiscal and political tendencies as dictated by the leading Eurozone economies.
It's rather curious, though, that many of these "New Europe" countries have actually gotten the point much better than their "Old Europe" counterparts, and have taken the necessary measures to stop most leaks and seal the holes in their bucket to an extent good enough to allow them to outperform the Eurozone fiscally (if not economically). The irony is that it was the leading Euro-powers that used to constantly preach to East Europe; and now, like it or not, the teachers have to look for lessons from their students. It's funny how the wheel turns around.
(no subject)
Date: 27/12/12 14:16 (UTC)Even Germans are quietly building up their contingency plans of returning to merry old DM, shall Euro fail.
I'd welcome this, but there's going to be no fun at all, oh no.
(no subject)
Date: 27/12/12 14:26 (UTC)(no subject)
Date: 27/12/12 14:39 (UTC)In terms of geography Greece IS Europe, in terms of history - Greece is Europe ITSELF.
It joined EU in the 'first wave', before Austria, Spain and Portugal did so.
(no subject)
Date: 27/12/12 15:07 (UTC)(no subject)
Date: 27/12/12 22:27 (UTC)(no subject)
Date: 28/12/12 15:00 (UTC)(no subject)
Date: 28/12/12 01:37 (UTC)(no subject)
Date: 28/12/12 09:23 (UTC)(no subject)
Date: 28/12/12 13:43 (UTC)(no subject)
Date: 28/12/12 13:51 (UTC)(no subject)
Date: 28/12/12 10:07 (UTC)This world is fully packed with morons.
(no subject)
Date: 28/12/12 14:04 (UTC)a better definition for Europe in this context is:
http://en.wikipedia.org/wiki/European_Economic_Area
(no subject)
Date: 27/12/12 15:52 (UTC)(no subject)
Date: 27/12/12 18:27 (UTC)(no subject)
Date: 28/12/12 13:04 (UTC)(no subject)
Date: 28/12/12 14:02 (UTC)(no subject)
Date: 27/12/12 20:36 (UTC)(no subject)
Date: 27/12/12 20:42 (UTC)(no subject)
Date: 27/12/12 22:18 (UTC)(no subject)
Date: 27/12/12 23:03 (UTC)(no subject)
Date: 27/12/12 23:05 (UTC)(no subject)
Date: 27/12/12 23:06 (UTC)(no subject)
Date: 27/12/12 23:08 (UTC)Bow-wow!
(no subject)
Date: 28/12/12 01:28 (UTC)(no subject)
Date: 27/12/12 20:48 (UTC)But I'm glad it's rock solid. I don't wish bad things on my Euro brothers and sisters!
(no subject)
Date: 27/12/12 22:29 (UTC)We can travel to the US and live like kings now, it's like Thailand.
(no subject)
Date: 28/12/12 10:05 (UTC)Monika's initiative didn't get supported wide.