Vanity currencies?

There are arguments for and against the Baltic countries joining the euro
zone as quickly as possible. Just back from Greece, I saw some practical
reasons for such a move.

International banking has become radically simplified. The number of
reliable currencies in the world has decreased during the past five years,
and there has been a tendency for groups countries to share the work
needed to maintain a single currency, thus facilitating trade between
them. Even though the Baltic currencies are stable and pegged to the euro,
they are too small for most international banks to be bothered with. This
means that when, say, an Estonian decides to make a trip to Greece he/she
has to exchange his/her kroons at home, and pay the necessary exchange
fees, because it is highly unlikely that any but the largest banks in
Greece will accept Estonian kroons. Even Swedes, Danes, and Norwegians
find that their currencies are not well known any more, and when they are
accepted, the exchange rate is slightly less favorable than it should be,
particularly considering the fact that the Danish krone, like the three
Baltic currencies, is pegged to the euro.

With the Russian ruble now fully convertible, international bankers will
have yet another major currency to deal with, thus further marginalizing
small currencies such as the Scandinavian and Baltic ones.

We all know how important it is for nations who have recently re-acquired
their independence to see their national symbols on the currency they use,
and the euro has dealt with this by having the coins carry obvious and the
banknotes less obvious national features. It is just a matter getting used
to a new situation. As it stands now, the inhabitants of the Baltic
countries are paying a money exchange tax every time the purchase the
euros needed to travel in most fellow countries of the EU, as well as yet
again when they exchange any unused euros back to local currency. Although
it is only one of the many issues involved in the complex issue of
euroization, one can certainly consider whether there is any justification
for Baltic travelers to be subjected to this extra, twice imposed tax for
the luxury of maintaining their own national currencies.

Regards,
Eugene Holman
.

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