Denmark, Poland and Iceland

[chrisild]

Thank you for not asking "what have you guys been smoking?" And yes, that is the tailfin of a whale. Sure, this is just a private design "suggestion" published in the September bulletin of a major French coin dealer (CGB), along with the article "Islande, UE et euro : un cas d’école ?". Seems that for the national side they used the ring of a Spanish €2 coin - and that ring will actually be modified on future issues. (By the way, the recommendations you mentioned come from the European Commission, not the ECB.) What Figleaf wrote about the map was about Iceland's location on the common side, I think - currently Iceland is not on that map. So when, or rather if, Iceland becomes an EU member state, the map of Europe would have to be modified again.

Christian

[Miguel.mateo]

Christian,

I have been for a while away from the forum, i honestly thought you were looking at a link that changed or removed from the forum, since I saw maps, exports, mariguana You mentioned about what the article says and i saw no article ...  I was unsure we were looking at the same image.

Regards,
Miguel

PS. ECB, European Commision, European Council ... so confusing!

[chrisild]

I have been for a while away from the forum

Indeed - nice to have you back! Must admit that, especially in summer when lots of people go on vacation, I don't really notice "absences" a lot. That usually comes after a much longer while, or when I expect to get coins from another member, hehe.

Here is the link to the original article (in French): http://www.cgb.fr/bn/pdf/bn067.pdf  (The Iceland story is on page 10.) The "problem" with Iceland is, as you may know, that most people there would like to have the euro - but many of them do not want their country to be in the EU. The Icelandic government has officially begun membership negotiations with the European Union (see here) but those may take a while, and then be subject to a referendum in Iceland, and maybe in some EU countries too. If they all say Yes, then Iceland would join; but it would still take a few (absolute minimum: two) years until the country could introduce the euro.

PS. ECB, European Commision, European Council ... so confusing!

Please do not assume it's plain and simple for us here. By and large however, the European Central Bank is not involved in coin design questions. The recommendations (regarding the designs) are usually made by the European Commission. And legally they are just that; practically such a recommendation will of course have some weight. Now when it comes to legislation (about material or diameter, or some other legal "framework"), the Commission will make a detailed proposal, and the Council of the EU* will then OK or modify it. Not sure whether the European Parliament is involved in such questions.

* There is a difference between the European Council (where the heads of state/government get together) and the Council of the European Union (where the ministers meet). Not to mention the Council of Europe which is not an EU body anyway ... All this is not terribly important when it comes to coin designs; it's just that this is not the ECB's business. And in this particular case of the "whale design", no EU body was involved - just somebody in France who did a neat Photoshop job.

Christian

[chrisild]

As far as Denmark is concerned, I was somewhat surprised to read that the Danish government has not silently taken that issue off the agenda: Last weekend the Venstre MP Michael Aastrup Jensen (Venstre is the biggest party in the government coalition) said that the next elections, originally scheduled for November 2011, may be late this year or early next year instead. And some time after the election there could be, according to what he said, a new euro referendum in Denmark.

As for what the outcome will be, keep in mind that the Danish krone is already in the exchange rate mechanism. And while the default fluctuation band in ERM-II is +/- 15 percent, Denmark has a much narrower band, only +/- 2.25 percent. That may be a reason to say "let's take the last step as well, and get in", or to say "the exchange rate is pretty stable, and that is all we want". Who knows.

Forget about the other two mentioned in the topic title. Estonia is very likely to be "in" as from 1 January, but all the other member states that theoretically need to introduce the euro, including Poland, may get in between 2015 and 2020. Or even later. And Iceland is not even an EU member state. Having the smallest "independent" currency in the world may not be very attractive, but for some reason they may not find the EU and the euro that convincing either.

Christian

[Figleaf]

It may be politically clumsy to talk about accession to the euro now, but - in spite of all the hype - economically, the decision (if there was one) is sound. As you may have noticed, I am not particularly impressed by the joint intelligence of currency traders. To think that a Greek default would hurt anything other than Greece is deluded (wishful?) thinking. To think that the euro area will fall apart is the job of sensation journalists in the class of "one-armed bandit rapes extra-terrestrial pink elephant". To believe that Spain is a problem, while it has already passed the deepest point of the crisis and is out of its recession is ludicrous. To think that a guarantee package for weak euro countries (with plenty of strings attached) increases the risk on the euro is beyond belief. Let's hope these hopping madmen will take large short positions on the euro and be hit where it hurts. Lets hope they don't work for whichever bank we put our money in.

Meanwhile, if Denmark does decide to accede, I don't think there's anything that can be put in their way. Of course, that's different for Iceland, which is the leader of the opportunistic class of potential candidates. These countries wouldn't contribute to the further development of the euro institutions, so it's better to do that without them.

Speaking of which, Barroso wants the EU to have a say in government budgets and big financing institutions from banks and insurers to pension funds. Logical enough, but I don't think the time is ripe. Ministries of Finance are notoriously stick-in-the-mud, especially when it comes to their own power. With a bit of luck, there'll be better consultation and co-ordination, though. That would cost little and help everyone.

Peter