A coin for 20 years of the euro?

[Figleaf]

Last year, I asked the same question about a coin for Martin Luther King. This year, it is the turn of the EU to embarras itself.

There is a strong case for such a coin. In spite of the media stories, the euro is one of the top successes of the EU. It is a simple concept, easy to understand, hard to carry out in practice. It takes a lot of mutual trust that everyone will play by the rules. Media stories, always looking for drama, labelled everything from Greece's statistics fraud to Italy's populist government as an attack on the euro, though. The image of the euro has become one of a tottering experiment, while in fact, the euro is firmly entrenched and it has shown how a common currency contributes significantly to growth, wealth and development, witness the many failed attempts to imitate it.

I am confident that there are at least two camps in the political discussions on euro matters. There will undoubtedly one that argues that "we should lie down and wait until this blows over" (as if the media will not find a new disaster when the current one gets boring) and a camp that wants to trumpete the achievements of the euro. Which side will win? The strongest argument for a coin is the bureaucratic reflex that one was issued 10 years ago.

Peter

[eurocoin]

Although it is likely that at least some country will issue a coin for the occasion (possibly even a national 2 euro commemorative) I think they will wait until the 25th anniversary before another joint 2 euro commemorative will be issued for the occasion.

[<k>]

Media stories, always looking for drama, labelled...Greece's statistics fraud...as an attack on the euro, though. The image of the euro has become one of a tottering experiment, while in fact, the euro is firmly entrenched and it has shown how a common currency contributes significantly to growth, wealth and development, witness the many failed attempts to imitate it.

This is way too smug an assessment, especially with regard to Greece. The EU - and especially Germany, whose say goes on financial matters - were naively tricked into waving Greece into the eurozone? I suspect they knew more than they were letting on, but trusted that everything would come good. Even the IMF was disgusted by the way in which the EU plunged Greece into depression as a punishment for its sins. The EU should have taken more of its own share of the blame. There is also shame in that the EU deigned to call in the IMF in the first place.

Anybody wishing to educate him/herself on this matter should read: Adults In The Room: My Battle With Europe's Deep Establishment by Yanis Varoufakis.

See also the Guardian's review of that book: Adults in the Room by Yanis Varoufakis review – one of the greatest political memoirs ever?.

Far from being an extreme left-winger, Yanis Varoufakis proved to be very pragmatic in the policies he offered to the EU, to solve Greece's problems without plunging it into a far worse austerity than even modern British Conservatives have ever inflicted on the UK. He accepted privatisation of many assets, but he also had his red lines, to protect important parts of Greek assets from predators. He also wanted technocratic help from the EU to tax the Greek oligarchs, who have traditionally brazenly evaded the system, and he even developed a system to allow him to do it, but the EU managed to stall and stall until it pushed out of his post. The villain of the piece is Wolfgang Schäuble, whom nobody, not even Frau Merkel or Christine Lagarde, dared contradict. His aim was to force Greece to take "time out" from the euro, by imposing such draconian punishment that he thought Greece would find unacceptable, if Greece tried to stay within the euro. Sadly, Greece did ultimately opt to stay in the euro zone. Predator capitalists were then able to buy off many of its assets at bargain basement prices.

The scenes that were then played out over the next few years were pitiful, as many Greeks was plunged into poverty. Mr Varoufakis rightly claims that many Britons were disgusted by this, and that it helped to bring about a vote for Brexit. In my own case, the Greek tragedy led me to abstain in the referendum. Disgusted as I was, and sceptical as I was and still am, I still thought of myself as enough of a European that I could not bring myself to vote for Brexit. Even Yanis Varoufakis is enough of an idealist that he wanted the UK to stay in the EU and fight for fairer policies.

Austerity in Greece saw the rise of Golden Dawn, a neo-Nazi party, in Greece, which carried out violent attacks on immigrants. Events do not exist in a vacuum. Brexit emboldened elements of the far-right in other EU countries, and it has been cited by the "yellow vests" in France, amongst others, as an inspiration. Nor is the EU alone to blame for the general malaise and unrest. Neo-liberalism has gone too far in allowing the rich to accumulate even more mass wealth. QE has pushed up asset prices and house prices, leading to a homelessness problem in some Western countries that I never expected to see in my lifetime. It is also known that capitialism suffers a big depression roughly once every lifetime. I believe that that depression was due in 2008, but governments used QE and low interest rates to suppress it, with consequences that are now coming into play. The 2020s, it seems, will not be pretty.

[Figleaf]

I am not sure what the relation is between my argument that Greece did not endanger the euro and your argument that Greece was dealt with too harshly. Let's see if this thread needs splitting later.

It is a fact that the Greek government consciously and willingly cooked the books. It is a fact that the Greek economy is recovering quite well and is now financially stronger. It may never have been stronger.

It is a fact that I saw Mr. Varoufakis only once. I was in a large group, listening only. I knew what my client wanted to hear and I was willing to tell them what they wanted to hear: Greece takes its responsibility, but it wants the process of rebalancing to be longer drawn out. I almost expected Mr. Varoukis to say something like that and I believe I was not the only one in the group. All it took was some obvious words, to soothe the nerves of politicians who believed the money they put into Greece was going to evaporate. Instead, we got a long whine about how everything was someone else's fault.

I have been in a few such meetings. The ministers are always well briefed, frustrated, usually because they feel the audience is beneath their dignity or because they feel like beggars or both. I understand that. It was and is my opinion that Greece was dealt with too harshly. However, much of that was due to nervousness of the creditors. Remember that this rescue was the first of its kind and it involved real money. That was the reason the IMF was asked to give parallel loans. A default would have cut off Greece from non-euro lending also. Mr. Varoufakis stoked the flames of nervousness instead.

Schauble was the main negotiator on the EU side, simply because Germany had the largest amount of money at stake. His mission was emphatically not to shove Greece out of the euro, but the opposite: to keep Greece in and make a success of the bail-out. I believe his recovery programme was solid, but much too hasty, but I do understand him also. He's a Bundesbank guy and the Bundesbank culture is still shaped by the time of hyperinflation after the first world war. Greece's situation scared him out of his wits. So did the position of the  Anglo-American press of "just slide out of the euro, let the drachme go to hell and inflate yourself out of the problem". He was right. That recipe would have meant misery for the Greek population also, plus it would have done nothing to set the economy straight, teach the politicians a lesson or create a solid future growth path.

It is absolutely untrue that Ms. Merkel dared not contradict Schauble. On the contrary, Ms. Merkel told him more than once to make concessions. It is the cheapest possible whine to blame your negotiating partner for your own failures.

That leaves us with the role of the UK and its press. The UK was on the sidelines, refusing to take part, not playing a constructive role in any sense. The British press played a leading role in presenting what was an economic problem as a threat to the euro, when in fact, it was the first time the euro countries helped one of their group to overcome their problems with a very large amount of money, solely on the trust that it would be repaid. The British press was proven collectively wrong by how events are turning out. I wonder in how far this explains their enthusiasm about the latest whine of Mr. Varoufakis.

Peter

[FosseWay]

I tend to agree with Peter to the extent that Greece had serious corruption and mismanagement problems before the crisis that caused the crisis to be much worse than it need have been (compare, say, Ireland, where the crisis hit hard but could be fought against fairly effectively), and that if you persist with that kind of mismanagement and corrupt culture then you have only yourself to blame if it backfires on you. Whether the EU handled the crisis in the best way is a separate and independent question, and here I think there is a degree of truth in what <k> writes, especially with regard to the psychological effect of the EU's policy on other anti-establishment feelings, such as Brexit, the Gilets Jaunes, M5S etc. But you really can't blame Greece's situation on the EU. If Greece mismanages itself to the extent that external entities have to intervene at all, then you have to accept that that intervention may not be what you want. It's a bit like the warring tribes in post-Roman Britain who imported Anglo-Saxon mercenaries to help fight their petty squabbles only to find that the mercenaries then took over and killed/expelled the warring tribes. As to Greek corruption etc. - I'm a bit tired of hearing that bribery and tax evasion is "part of the culture", whether in Greece or Italy or anywhere else in the developed world where these things are a disproportionately serious problem. If countries like Germany, the UK and Scandinavia can reduce both issues (corruption, certainly) to lower levels, then it is possible to do so anywhere else with the same basic technological and economic circumstances. Germany etc. are by no means perfect in these regards, and there is clearly huge scope for improvement there/here, but the only reason I can see for large differences across the EU, especially in countries in the former West that have been constitutional democracies since at least the 1970s and since 1946 in Italy's case, is pure laziness on the part of politicians through the ages in those countries.

But I must take issue with this line of Peter's:

It is a fact that the Greek economy is recovering quite well and is now financially stronger.

In terms of GDP that may well be true. By the same measure the UK is not doing badly either, nor Ireland. But in all three countries, the number of people living in poverty is rising. The number of homeless on the streets of Dublin when we were there in October was shocking and not something I saw on previous visits. Use of food banks in the UK has never been higher. Macro-level economic figures are often used by capitalist institutions, whether central banks or centre-right governments like Thatcher's, to hide serious problems in normal people's real economy, and then they act all surprised when the chickens come home to roost - whether the chickens present as general meltdown as in Greece, public disorder as in France, or voting for Brexit to poke the sitting government in the eye as in the UK.

[Figleaf]

I'll readily concede the point that income distribution is bad and not getting better and I would extend that to much of the rest of the world. The only consolation is that the pie keeps growing. This is important, because it is easier to redistribute growth of income than to redistribute capital.

That said, I just spent some time in the Netherlands. At Christmas time, one homeless man was found. This was thought to be scandalous. The man was picked up by the police and ... put up in a hotel. Not because of Christmas, but because homelessness is not acceptable. Many other countries have a similar or better per capita income and the Dutch government is rightist. The example shows how little it takes to eradicate human waste. With the inclement climate in Sweden, I would expect a similar attitude in Sweden?

Time to redistribute growth of income is running out: according to UN calculations, we are entering an age when (no matter what the greenies like to think) population growth will stop globally (some countries already have a receding population). This will be a major break on the absolute level of growth (not necessarily on per capita growth.) If you are interested in why this is so, look here.

Peter

[chrisild]

Sorry to interrupt the discussion about whether Greece should have kicked out of or left the currency union (which would have meant leaving the European Union), but I thought the topic was about the question whether we are going to see a "20 years of the euro" coin.

Frankly, I do not think so, nor do I support the idea. The euro area countries decided, for example, to not commemorate the 25th anniversary of the Maastricht Treaty that way. Neither in 2007 (signed in 1992) nor in 2008 (became effective in 1993), thus when the European Union was basically founded. That I would have found much more relevant than issuing yet another euro-related commemorative coin.

And the singular "coin" is not appropriate here anyway - we would have 19 pieces with the very same design. No, thank you. If the euro is still around in 2024 (which I do hope), a quarter century issue might be in order ...

Christian

[chrisild]

Not a coin but a quiz.

The European Central Bank celebrates the 20 years of the euro in various ways, including a little quiz about the ECB and the common currency. Three levels, four questions each:

https://www.ecb.europa.eu/euro/html/quiz.en.html

(This is the English version; you can pick a different language from the menu in the upper right corner.) There is no questions "pool", so if you decide to play the quiz one more time, you are asked the very same questions again ...

Christian

[Figleaf]

I modestly chose the "clued-up" (?) level and got 3 out of four. Thinking I'd been too modest, I did the expert level and still got three out of 4. Conclusion: the population of four questions is too small to draw any conclusion. Still, good fun. At least I learned that support for the euro is now at 74%. Isn't that an argument to make some kind of a deal about its 20th anniversary?

Peter

[Figleaf]

The results are in and the "unlikelies" have it. Congratulations. Great to see nobody took the easy cop-out "Who knows?"

I am highly amused by the votes for "unwarranted" and "inevitable". Would anyone, including those who voted for these options, be able to expand on that opinion?

Peter