The EU... - Page 2

Illuminatus · 06-10-2004, 09:25 AM

I'm a fan of the EU, because someday it might grow powerful enough so that my fellow American's would have to get off their damn high horses and realize that there are other people in the world.

Osterbaum · 06-10-2004, 12:41 PM

There are other people in the world besides us europeans too.

No really, I get your point.

It's allready pretty powerfull. The EU. Especially after the (wast it) 15 new members joined last month.

FunnyLooking · 06-10-2004, 06:16 PM

So, the EU is like the European NAFTA, right?

Does the EU have any problems like countries refusing to cooperate, like Bush messing up NAFTA? I'm kind of curious.

In fact, why doesn't NAFTA just use the Dollar, rather than Canadian, American, and Peso, etc.?

Viper Daimao · 06-10-2004, 07:11 PM

a few countries do use the dollar (the economic term is "dollarization", Panama has done if forever, Ecuador made the switch in '99, Agentina has been talking about it since '99, and Boliva has "defacto" done it), and others like china have their currency pegged to it. the problem is with interest rates. like, if america starts having inflation expectations (which we are slowly starting to have) then we will raise interest rates. this will make the dollar stronger against other currencies thus making our exports more expensive.

the problem for other countries who use the dollar is that when we raise or cut interest rates, its done without regard to their economy. so if we raise rates, make the dollar appreciate in value, then make their goods more expensive. then they loose tons of exports because of the increased cost of the foreign countries goods.

This has also been a slight problem for the EU. what if Spain say, has a financial crisis, and needs interest rates lowered? if the rest of the EU is doing well, they wont want to lower everyone's interest rates just for Spain.

What you want is symmetric shocks, and more homogenus economies and nations. Nobel Prize winning economist Robert Mundell called this an optimal currency area. to reach one, you need product market integration (do they buy and sell stuff to each other?), and factor market integration (does labor and capital flow freely from one country to another?). Certainly the EU has achieved product market integration. However most agree that Europe has not achieved factor market integration. It can be argued that capital flows fairly freely now, however there are still too many regulations on labor moving from one country to another and working there for it to be considered optimal.

The EU was supposed to take off and rival the economies of America and Japan, however, this didnt happen, as the big economies of Europe (namely France and Germany) experienced slow growth. This along with the fact that EU is not an optimal currency area.

Osterbaum · 06-11-2004, 02:46 AM

All you are saying there right now Viper is true. Many didn't support the � and some still don't, but they didnt hold an vote for it in almost any country unless they were certain of winning.

Quote:

Does the EU have any problems like countries refusing to cooperate, like Bush messing up NAFTA? I'm kind of curious

It's like this: All countries have representatives in the parliament. Some country can use their veto in some cases if voting against it simply doesent help.

Melfice! You went and published the results early. Just saw it on the news. They are thinking here of charging (or something like that) you with some thing in the comissions next meeting.

Omega Mage Zero · 06-11-2004, 10:20 AM

This is a question from an uninformed American, but has there ever been talk of Canada joining the EU. I know they're in NAFTA, but couldn't they be in both? Maybe they're not IN Europe geographically, but culturally and in government Canada seems to have much more in common with Europe than it does with the US and Mexico.

Osterbaum · 06-11-2004, 10:27 AM

Quote:

Canada joining the EU

Never gonna happen. Only European countries can join. There has been talk about Turkey joining cause they have a small bit thats part of europe, but they don't meet the othr standards.

06-10-2004, 09:25 AM	#11
Illuminatus The Dread Pirate Join Date: Nov 2003 Location: Where the wild things are Posts: 1,310	I'm a fan of the EU, because someday it might grow powerful enough so that my fellow American's would have to get off their damn high horses and realize that there are other people in the world. __________________ Man, n. An animal so lost in rapturous contemplation of what he thinks he is as to overlook what he indubitably ought to be. His chief occupation is the extermination of other animals and his own species, which, however, multiplies with such insistent rapidity as to infest the whole habitable earth and Canada. -Ambrose Bierce's Devil's Dictionary

06-10-2004, 12:41 PM	#12
Osterbaum The revolution will be memed! Join Date: Mar 2004 Location: FIN Posts: 5,967	There are other people in the world besides us europeans too. No really, I get your point. It's allready pretty powerfull. The EU. Especially after the (wast it) 15 new members joined last month. __________________ D is for Dirty Commie!

06-10-2004, 06:16 PM	#13
FunnyLooking Funny Looking Productions Join Date: Nov 2003 Location: In Your House and Coming to Get You Posts: 431	So, the EU is like the European NAFTA, right? Does the EU have any problems like countries refusing to cooperate, like Bush messing up NAFTA? I'm kind of curious. In fact, why doesn't NAFTA just use the Dollar, rather than Canadian, American, and Peso, etc.? __________________ Mirrors Always Lie -Funny Looking Productions Sing me to Symmetry Muse of the Mathematic We worship all equations the simple and quadratic Algebra, Geometry, Set and Number Theory All admired equally In our Purgatory and Pathogorean secret society. -Fermat's Last Tango "The Aftermath

06-10-2004, 07:11 PM	#14
Viper Daimao Ninja Death God Join Date: Nov 2003 Location: Texas Posts: 1,087	a few countries do use the dollar (the economic term is "dollarization", Panama has done if forever, Ecuador made the switch in '99, Agentina has been talking about it since '99, and Boliva has "defacto" done it), and others like china have their currency pegged to it. the problem is with interest rates. like, if america starts having inflation expectations (which we are slowly starting to have) then we will raise interest rates. this will make the dollar stronger against other currencies thus making our exports more expensive. the problem for other countries who use the dollar is that when we raise or cut interest rates, its done without regard to their economy. so if we raise rates, make the dollar appreciate in value, then make their goods more expensive. then they loose tons of exports because of the increased cost of the foreign countries goods. This has also been a slight problem for the EU. what if Spain say, has a financial crisis, and needs interest rates lowered? if the rest of the EU is doing well, they wont want to lower everyone's interest rates just for Spain. What you want is symmetric shocks, and more homogenus economies and nations. Nobel Prize winning economist Robert Mundell called this an optimal currency area. to reach one, you need product market integration (do they buy and sell stuff to each other?), and factor market integration (does labor and capital flow freely from one country to another?). Certainly the EU has achieved product market integration. However most agree that Europe has not achieved factor market integration. It can be argued that capital flows fairly freely now, however there are still too many regulations on labor moving from one country to another and working there for it to be considered optimal. The EU was supposed to take off and rival the economies of America and Japan, however, this didnt happen, as the big economies of Europe (namely France and Germany) experienced slow growth. This along with the fact that EU is not an optimal currency area. __________________ "Falsehood is worse than hate, and that must be; if she whom I love, should ever love me"

06-11-2004, 10:20 AM	#16
Omega Mage Zero Troopa Join Date: Feb 2004 Posts: 53	This is a question from an uninformed American, but has there ever been talk of Canada joining the EU. I know they're in NAFTA, but couldn't they be in both? Maybe they're not IN Europe geographically, but culturally and in government Canada seems to have much more in common with Europe than it does with the US and Mexico.