EUROPE: The Euro

Tom Grey writes: "The popularity of the Euro will be dependent on the "Growth and Stability Pact", made by those signing the Maastricht treaty, and restricting their budget deficits and total gross government debt. Already Germany, France, and Italy are making noises about the Pact being too (monetarily) restrictive. The anti-Euro forces are particularly important in Britain, keeping the UK out of the Euro-zone and maintaining the possibility of a monetary policy for the UK different than that of the European Central Bank (ECB).

Some 16 months ago I delivered a speech about the benefits to Slovakia of entering the Euro zone to the (mostly anti-Euro) Mt. Pelerin Society annual meeting. (I remember the date clearly: 11 Sept 2001 ..) I believe Europe is already benefitting from the Euro; though maintenance of the Stability Pact remains an issue. The benefit is likely to be drowned out by the labor market rigidities and other terrible Brussels-based over-regulation. As new Central European countries join the EU, and most (all?) adopt the Euro, there will be even greater benefits. Traveling is already one step easier, with little need to change currencies".

RH: I reserve for a later posting details about the Euro currency.

Ronald Hilton - 1/18/03