Tomorrow, 1st January 2007, Bulgaria and Romania will join the EU taking the number of EU Member States to 27. Also, little Slovenia will drop its Tolar currency and adopt the Euro meaning that 13 of the 27 EU members will have the Euro. But most countries that already have the Euro are suddenly realising that it's not such a good thing......
The Sunday Times
December 31, 2006
Non, nein, no: Europe turns negative on the euro
Matthew Campbell, Paris
A FRENCH diplomat who spent the festive period at his weekend home in rural France was astonished last week when a man in a DIY shop presented him with a bill in francs, rather than in euros, with the excuse: “I am sorry, monsieur, most of my clients prefer it that way.”
In a world apart from the euphoria with which 12 nations — excluding Britain — switched to the euro on New Year’s Day in 2002, hostility towards the single currency is growing as a wider malaise over an expanding Europe takes hold.
“I suppose in some places the euro has just never really caught on,” said the diplomat. “I feel very pessimistic about the future.”
Slovenia will drop its tolar tomorrow in favour of eurozone entry, but in “old Europe” the fifth anniversary of the introduction of the euro will be more an occasion for bitter reflection than fanfares.
The high denomination notes may be popular among criminals, but one poll released last week showed that 52% of French people believe that “the euro is a bad thing”, blaming it for inflation, and 57% felt that the euro had been bad for them “personally”.
A quarter of the population, it emerged, still calculated prices in francs, a process that the government has not seemed to discourage by requiring all receipts to display, alongside the euro total, the equivalent price in francs.
It might not matter if this disgruntlement were limited to rural French bakers who spit at the mention of euros: the French are in a peculiar mood, as they demonstrated most spectacularly by rejecting the European Union’s proposed constitution in a referendum last year.
More worrying to Brussels, however, was evidence that resentment of the euro was spreading to other parts of the empire. A majority of Germans, it turns out, also long to have their old currency back, according to another recent poll, because of inflation that they blame on the “teuro”, as they often call the euro in a play on teuer, the German word for expensive.
The Spanish and Irish seem relatively content with their lot but the same cannot be said of Italy, where 64% of people acknowledged feeling “little” or “not at all” at ease with the European currency, which they blame for higher prices. Some politicians have called for the country to re-establish the lira to revive economic growth.
This was all a far cry from the “very great federating power” that Hubert Védrine, the former French Socialist foreign minister, imagined for the euro.
“It has not had the effect of an integration lever that its founding fathers dreamt of,” said the left-wing Libération newspaper in an editorial last week. “At a time when the European project has broken down . . . you have to be a Slovene to feel any enthusiasm about joining the eurozone.”
In Slovenia the opinion polls showed that the euro was still generally popular because it represented a final break with the communist past.
Yet even here there were fears about rising prices and other EU newcomers are hardly racing to the starting line. Hungary has abandoned its previous target of adopting the euro in 2010, and Estonia has decided to move its target entry date to 2010 from 2008, despite its economic success.
Those already in the club are hardly a good advertisement for it. By contrast with German angst about the euro, which is strongest among the least well-off, Gallic grumpiness with the euro system extends to the political classes that once trumpeted its virtues.
Various French politicians, including Dominique de Villepin, the prime minister, Ségolène Royal, the Socialist presidential candidate, and Nicolas Sarkozy, her most likely opponent from the centre-right, have displayed a populist streak by making the European Central Bank their favourite political punchbag as the presidential election draws near.
The bank’s officials last week seemed to take pride in the strength of the euro and news that the value of euro notes in circulation was this month likely to exceed the value of circulating dollar notes. There was similar satisfaction over Iran’s recent announcement that it would keep foreign reserves in euros rather than dollars.
For French politicians, however, the euro’s strength was to blame for making French goods too expensive overseas and hampering growth. This ignored a host of other factors, such as high French labour costs. However, it played well with an electorate terrified of being left at the mercy of market forces. It also highlighted the protectionist instincts of even supposedly reform-minded politicians such as Sarkozy, the son of a Hungarian immigrant, who has revolutionised French politics with American-style campaigning techniques and who likes to advertise himself as the candidate of “rupture” with the past. Like Royal, though, he was in favour of bringing the European Central Bank under politicians’ control.
All of this reflected a wider European malaise: rejection of the EU constitution has left Europe rudderless and adrift just as it is set to expand to 27 members next month. The inclusion of Bulgaria and Romania will make the EU more unwieldy than ever. But as Germany takes over the rotating presidency of the organisation this week the Franco-German axis, traditionally a motor of decision making in the EU, has never seemed weaker.
Angela Merkel, the German chancellor, has put more effort over the past year into repairing relations with America and befriending George Bush, its president, than she has into building ties with France.
timesonline.co.uk
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I thank God that Britain kept the pound.
The Sunday Times
December 31, 2006
Non, nein, no: Europe turns negative on the euro
Matthew Campbell, Paris
A FRENCH diplomat who spent the festive period at his weekend home in rural France was astonished last week when a man in a DIY shop presented him with a bill in francs, rather than in euros, with the excuse: “I am sorry, monsieur, most of my clients prefer it that way.”
In a world apart from the euphoria with which 12 nations — excluding Britain — switched to the euro on New Year’s Day in 2002, hostility towards the single currency is growing as a wider malaise over an expanding Europe takes hold.
“I suppose in some places the euro has just never really caught on,” said the diplomat. “I feel very pessimistic about the future.”
Slovenia will drop its tolar tomorrow in favour of eurozone entry, but in “old Europe” the fifth anniversary of the introduction of the euro will be more an occasion for bitter reflection than fanfares.
The high denomination notes may be popular among criminals, but one poll released last week showed that 52% of French people believe that “the euro is a bad thing”, blaming it for inflation, and 57% felt that the euro had been bad for them “personally”.
A quarter of the population, it emerged, still calculated prices in francs, a process that the government has not seemed to discourage by requiring all receipts to display, alongside the euro total, the equivalent price in francs.
It might not matter if this disgruntlement were limited to rural French bakers who spit at the mention of euros: the French are in a peculiar mood, as they demonstrated most spectacularly by rejecting the European Union’s proposed constitution in a referendum last year.
More worrying to Brussels, however, was evidence that resentment of the euro was spreading to other parts of the empire. A majority of Germans, it turns out, also long to have their old currency back, according to another recent poll, because of inflation that they blame on the “teuro”, as they often call the euro in a play on teuer, the German word for expensive.
The Spanish and Irish seem relatively content with their lot but the same cannot be said of Italy, where 64% of people acknowledged feeling “little” or “not at all” at ease with the European currency, which they blame for higher prices. Some politicians have called for the country to re-establish the lira to revive economic growth.
This was all a far cry from the “very great federating power” that Hubert Védrine, the former French Socialist foreign minister, imagined for the euro.
“It has not had the effect of an integration lever that its founding fathers dreamt of,” said the left-wing Libération newspaper in an editorial last week. “At a time when the European project has broken down . . . you have to be a Slovene to feel any enthusiasm about joining the eurozone.”
In Slovenia the opinion polls showed that the euro was still generally popular because it represented a final break with the communist past.
Yet even here there were fears about rising prices and other EU newcomers are hardly racing to the starting line. Hungary has abandoned its previous target of adopting the euro in 2010, and Estonia has decided to move its target entry date to 2010 from 2008, despite its economic success.
Those already in the club are hardly a good advertisement for it. By contrast with German angst about the euro, which is strongest among the least well-off, Gallic grumpiness with the euro system extends to the political classes that once trumpeted its virtues.
Various French politicians, including Dominique de Villepin, the prime minister, Ségolène Royal, the Socialist presidential candidate, and Nicolas Sarkozy, her most likely opponent from the centre-right, have displayed a populist streak by making the European Central Bank their favourite political punchbag as the presidential election draws near.
The bank’s officials last week seemed to take pride in the strength of the euro and news that the value of euro notes in circulation was this month likely to exceed the value of circulating dollar notes. There was similar satisfaction over Iran’s recent announcement that it would keep foreign reserves in euros rather than dollars.
For French politicians, however, the euro’s strength was to blame for making French goods too expensive overseas and hampering growth. This ignored a host of other factors, such as high French labour costs. However, it played well with an electorate terrified of being left at the mercy of market forces. It also highlighted the protectionist instincts of even supposedly reform-minded politicians such as Sarkozy, the son of a Hungarian immigrant, who has revolutionised French politics with American-style campaigning techniques and who likes to advertise himself as the candidate of “rupture” with the past. Like Royal, though, he was in favour of bringing the European Central Bank under politicians’ control.
All of this reflected a wider European malaise: rejection of the EU constitution has left Europe rudderless and adrift just as it is set to expand to 27 members next month. The inclusion of Bulgaria and Romania will make the EU more unwieldy than ever. But as Germany takes over the rotating presidency of the organisation this week the Franco-German axis, traditionally a motor of decision making in the EU, has never seemed weaker.
Angela Merkel, the German chancellor, has put more effort over the past year into repairing relations with America and befriending George Bush, its president, than she has into building ties with France.
timesonline.co.uk
---------------------
I thank God that Britain kept the pound.