Re: Stuff from yesterday's Daily Mail

On Sun, 31 Jul 2005 11:33:04 GMT, Stephen Glynn
<stephen.glynn@xxxxxxxxxxxx> wrote:

>MM wrote:
>> On Sat, 30 Jul 2005 09:45:51 GMT, "Diversity Isn't A Codeword"
>> <allblamelies@xxxxxxxxxxxxxxxxxxxxx> wrote:
>>
>>
>>>Interesting stuff from yesterday's daily mail.
>>>
>>>Looks like Italy is going to lead the pull out and collapse of the dismal
>>>Euro. Bellusconi has said it's a disaster and the reason the Italian economy
>>>is in such a slump. Will be good when that happens, what will the BBC do.
>>
>>
>> The euro is just an excuse for Italy's failures since 1945. How many
>> governments have they had? Italy always seems to be going from one
>> disaster to another, politically and economically.
>>
>> Eire is in the eurozone, is there a disaster there?
>> Ditto for most other countries in the eurozone.
>> Germany is a special case due to the reunification.
>>
>> MM
>
>The point, though, about Italy (and Germany) is that their membership of
>the Euro imposes on them interest-rate and other policies that, while
>they might be good for the Euro-zone countries as a whole, aren't ones
>the Italians or Germans would have adopted, given their specific
>circumstances, had they still used the Lira or the D-Mark.
>Consequently, the Italians and Germans aren't able to respond to
>economic problems by cutting or raising interest rates in the way the
>Bank of England can if it thinks that's a good idea.
>
>It's a similar situation, writ a lot larger, to what we had in the UK a
>few years ago when the then Governor of the Bank of England said, in
>effect, that while he accepted that his interest-rate policies were
>hurting Northern manufacturing, this was a price worth paying for the
>health of the British economy overall.

But from the Guardian (21/Jul/2005):

"UK residents on their way to the Algarve or Tuscany may have a
different view to Ashley Seager (Stop the euro - we may want to get
off, July 18). Having the same currency saves you time and money,
allows you to compare prices abroad without fear of being cheated and
makes you more comfortable about buying a home in the sun without fear
of exchange rate fluctuations.

For the 308 million people in 12 countries that have adopted it, the
euro has also brought down inflation and interest rates to rarely seen
levels. An Italian family borrowing ?100,000 (£67,000) to buy a house
in 1993 would have paid a bit more than ?1,500 a month for a 10-year
mortgage. Today it would pay about ?1,050 a month. The suggestion that
Italy could solve its problems by going back to the lira and devaluing
it forgets the trauma and costs of the UK's exchange rate problems in
the early 90s.

Tackling labour market rigidities, introducing more competition in
heavily regulated markets (eg professional services), investing more
in research, innovation and high value-added products and services
that substitute those where China and India are more competitive is
not an option - it is a necessity. Some countries in the euro area
have done it, others have started and those that have not know it is
the only road ahead.

Thanks to wage restraint and other reforms, Germany last year regained
its position as the world's leading exporter and consumers are
regaining confidence.

Amelia Torres
European Commission spokeswoman on economic affairs"

MM
.

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