Saturday, May 13, 2006

Why? Why? Why?

oh new members of the EU, notably Lithuania, Slovenia and Estonia want to join the Euro?

Here's a test they should try first!

1. What was your countries growth rate in the following periods (1) since 1 January 2002, the date the Euro coins were introduced, (2) 1 January 1999, when the Euro currencies were pegged together. Is this higher or lower than the Euro area?

2. How successful have other attempts to fix the price of currencies been? Please examine the French and UK economies after they rejoined the Gold Standard in the 1920s + check out the UK experience of ERM as well.

3. Why did the Danes and Swedes reject the Euro in post 1999 referenda?

4. Has convergence been achieved in your economies with the Euro area? If the answer is no - so do why do you think that convergence is not required?

5. Do you think your economies can converge with the Euro zone given the success of your Flat Tax systems compared to the complex, high rate systems commonly found in the Euro zone. Please consider other differences between the role of the state in your economies compared to the Euro area.

6. Should you trust the existing Euro members - given the general bending of certain rules to fit within the Euro criteria and the fact that they are to blame for the EU being such an inefficient, and at times, corrupt body?

7. Why risk a system that could end up overpricing your goods and services, when floating your currency ensures a suitable price. Has it hurt similar size countries like New Zealand when they have floated their currencies?


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