Backward Roll for the Euro

By Brummer, Alex | Daily Mail (London), January 18, 2002 | Go to article overview

Backward Roll for the Euro


Brummer, Alex, Daily Mail (London)


Byline: ALEX BRUMMER

THE honeymoon accompanying the launch of euro notes and coins is over. Now the people of Europe and the policymakers are having to face up to the reality.

The picture is not very reassuring. Many of the same structural factors which have led to economic sclerosis in euroland mean that the efficiencies claimed at the time of the launch of the notes and coins are not being achieved.

This is quickly feeding into the currency markets, where the rally is turning into a rout with the euro close to its lowest point this year at 88 US cents.

All this is underlined today by Patrick Lenain of the OECD economics department. He points out that the euro's street debut has been followed by a jump in the price of goods, has done nothing to remove costly bank charges for cross-border transactions within euroland, and is not increasing price transparency.

Manufacturers discourage crossborder purchases, because they are able to achieve better profits

in national markets. Before the economic benefits of transparency can be achieved, regulatory reforms will be needed to speed cross-border trade.

This has been difficult enough in an EU of 15 nations. It boggles the mind to think how it would be in an enlarged EU which includes economies as different in their needs as Latvia and France.

Euroland has afforded countries a degree of certainty in the currency markets, even if it meant submitting to a 25pc devaluation against the dollar. But as the OECD points out, it also has brought distortions.

Shocks such as an increase in oil prices play very differently across the EU. France has an inflation rate of 1.3pc against 5pc in the Netherlands.

Similarly there are

big divergences in growth levels with economies such as Ireland 'overheating' up to recently.

Of itself, the OECD observes, the single currency has done nothing to improve economic integration.

Huge sectors of euroland are protected by national barriers, including banking and energy - which explains why cross-border bank mergers of the kind desired by Lloyds TSB have been all but impossible. Nor has the euro yet become a reserve currency of choice.

Until Europe's political masters tackle underlying problems of cumbersome regulation, rigid labour markets and high operating costs, the single currency will do nothing to improve Europe's financial cohesion. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Backward Roll for the Euro
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.