Tuesday, August 21, 2012

Remember The Euro

The only way for the euro to survive is if parts of Europe politically unite under one constitution and one governing body elected by the citizens of the new amalgamated country. In order for anyone to believe this will happen, he must be one highly intoxicated optimist. There are 27 countries in the European Union from Germany with a population of 81.7 million to Malta with 417 thousand citizens in 2011. Only 17 of these countries use the euro. 

Europe, and the world, needs to plan for the end game. The dissolution of the euro is inevitable. We need to plan now to minimize the negative impact. The impact will be negative, it is the degree of impact that is yet to be decided.

The six most populated countries of Germany, France, United Kingdom, Italy, Spain and Poland have combined populations of 355 million. This is slightly larger than the United States. In 2010 the GDP of these six countries totaled $12.7 trillion in nominal dollars while the GDP of the U.S. totaled $14.6 trillion.

It becomes easier to trade between "countries" if they are all a part of one sovereign state. It is being Pollyanna to believe this will actually happen. There is much bad history between these countries, pride and tradition for each country runs deep, each country has its own taxing system and all have different social programs for their citizens.

Click above to enlarge
The combination of these countries would provide more world-wide influence and prestige. When a united Europe would speak, the world would listen.

As Europe is presently structured, the politicians of each country are entrusted with looking out for the interest of its own citizens. What may be good for all of Europe may not be what is best for Germany. What is best for Greece may not be what is best for the remainder of Europe. It is not the responsibility of the politicians in each country to look out for the common good of Europe.

No comments: