Is a single currency really necessary?

Typedef

http://www.cdu.de/englisch/europapolitik_engl.pdf

I came across an interesting document entitled "European Constitution Contract CDU and CSU Proposal" linked above. In that document put forward by Dr. Wolfgang Schäuble (retired
Federal Minister) and Reinhold Bocklet (Bavarian State Minister for
Federal and European Affairs), I notice that the document in question makes references to Europe remaining a Union of co-operating nation states and furthermore I note that the document exponenciates the rational that "not every European problem requires a European solution".
That got me thinking, is/was a single currency really a necessary step? For what? There was no real economic impetus to the enunciation of the single currency (which is one reason the British are so loathe to join it), so again that raises the question in my mind as to why?
To prevent war? War is unlikely between the Nuclear capable nations of Europe, no in fact that is wrong, war is totally out of the question in a European context, because the French and British have Nuclear weapons and if the Germans don't have Nuclear weapons, Germany certainly has the ability to produce them if need be. Thus war is unthinkable.
So if the single currency was not enunciated to placate war and if the single currency was inenacted due to economic impetus, then the only remaining possible logical conclusion is that the currency exists as a bulwark to promote Federal European Union a “Staatenverbund” (Union of States) to reference the document again, which seems to be at odds to notions expressed by leading politicians from Germany's leading political parties.

Again, what does this currency exist for and has the inflation due to it's introduction been a fact of life that has to exist, because the currency is vital, or is it the case that the entire Euro project is a discressionary aspect of a proposed, etheral “Staatenverbund”?

mike65

Typedef sometimes you think to much! Get a hobby!

As for whither a single currency, well I suppose we the people thought it would be a good idea not to have to change money
and pay for it when going abroad, to be able to make direct price comparisons which are meant to force prices down in high cost countries (ahem...) and the have a low steady interest rate.

The government just thought they should stay "on-side" and be "good Europeans".

The single currency could be a precurser to the FEDERAL EUROPEAN SUPERSTATE OF UNENDING EVIL but it does'nt have to be.

Mike.

Typedef

Hmm. One of the features of the North German Confederation, before Bismark's constitution was that it had a single currency . In many ways the single currency was one of the single biggest precursors to German unification.

From the Guardian.
http://www.guardian.co.uk/euro/story/0,11306,616567,00.html

The German Zollverein
Germany's 19th-century Zollverein, or customs union, is one of the best examples of how economic union can be used to pave the way for political union. It was built up gradually during the 19th century with the aim of increasing trade, and thus political unity, between the fragmented states of the German Confederation. Starting in 1818 with the North German Zollverein, more countries joined in 1834 and in 1866.
This was followed by a series of acts to standardise the disparate systems of coinage, weights and measures used across the area. A variety of coins were minted and used by the different states and only some were commonly recognised; bank notes were not legal tender.

The Zollverein proved to be a great success and undoubtedly helped to secure the political unification of Germany in 1871, at the end of the Franco-Prussian war. In 1876 the Prussian Bank became the Reichbank, controlling all coinage and paper currency, and Germany's now-unified currency - the Reichsmark - was stable enough to go on the gold standard

So what really perturbs me about the single currency is that with the coming introduction of a European Constitution I find a kind of continuity of history, between the run up to German unification in the Zollverein and 1871 Bismark Constitution and the current direction of the European Union. The single currency and then a Constitution seems to be a mirror image of the 1871 creation of Bismark's Germany and yes it is common knowledge that there are elements within the political establishment of most European Union Nations that would like to see 'Federal Competences' superceding National Level and European Level competences.

Yoda

The Irish pound was devalued a couple of times by the government over the past decade or so due to currency speculation. The euro is a currency large enough that no individual speculator can attack a state's economy as the Irish economy was attacked when we had the pound.

Beruthiel

I have to say, while on hols this year, I went from France to Portugal, to Spain, back to Portugal and home, the euro was dead handy as I never had to change my money. It also pointed out to me just how much things cost over here!

suppafly

I think that having a single currency is brilliant!! As said before u can see the direct price comparisons and stuff, and the banks don't get your money from having to change it all the time. it alos points out that Ireland is really expensive. There was a survey done. They compared the prices of stuff from Ireland and St tropez, and ireland came out more expensive. Thats crazy like. I reckon the prices will start to come down, ourelse the tourist industry will suffer, cuz they'll all see that its well expensive here and go someplace else. Also they really need to do some about the price hikes. Everybody added a fair amount onto there products prices in the changeover cuz they reckoned they could get away with it. That suxs. To me thats the only think thats kind of crappy about the euro, the pirces hikes that happened

sceptre

Originally posted by Typedef
The single currency and then a Constitution seems to be a mirror image of the 1871 creation of Bismark's Germany and yes it is common knowledge that there are elements within the political establishment of most European Union Nations that would like to see 'Federal Competences' superceding National Level and European Level competences.

There's certainly a comparison to be made.

Of course the key difference is that to finalise unification, Bismark had to forge a letter, form a unified army and start a war. No sign of that happening yet