Saturday, May 21, 2005

To Euro or Not to Euro

From the BBC:

One of the Czech National Bank's top policymakers has questioned the merits of eurozone membership, arguing that it may damage growth.

The comments by Czech National Bank board member Robert Holman are more explicit than previous comments and may signal a policy change, analysts said.


What has caught many observers by surprise is that Mr Holman has not only voiced this scepticism but also shifted the emphasis of what should determine euro membership for the Czech Republic.

Previous comments had focused on internal reform and fiscal discipline, but now the focus has been shifted to the economic performance of the countries that share the euro.

"The eurozone economy has been growing very slowly in the past five years, and among other factors, it could have been caused by having the common currency," Mr Holman said in an interview with Bloomberg News.

When I traveled about Europe, I certainly appreciated the Euro. It wasn't until visiting Prague that any difficult currency conversions were necessary. However, I would not have spent any more money if shops set prices in Euros. I just would have made purchases faster and returned to wandering. A little convenience for tourists is hardly worth sacrificing control of your monetary policy - especially with the EU's looming demographic and economic problems.

1 comment:

April said...

It should be an interesting week over there.