Euros

I feel obliged to say something about the new high-profile currency. If not a step towards political integration and the Unites States of Europe, it's at least a step towards easier tourism and a blurring of borders, especially in non-linguistically distinct areas. I'm awaiting word from my sister, who's on exchange in northern France, on her own experiences with and take on the Euro, and hopefully she'll write something I can post here. I'm impressed with the way the EU has handled the change so far, but the real difficulties will be a few weeks from now, as stores begin rejecting francs, lira, Irish pounds, etc, and consumers have to scramble like they're in a foreign country. Nature is weeding out the procrastinators for extinction... they won't be able to buy milk!

Commentator Iain Murray of The Edge of England's Sword supports Irish economist Bernard Connolly, who fears that Ireland and other small nations on the border of the Eurozone will take a serious economic hit when the central monetary policy conflicts with the economic realities. Specifically, he fears the Argentinian virus - too strong a currency coupled with too weak an economy - could strike Ireland, which would lose business to the UK. However, I'd say that based on past performance, the British pound is likely to be more austere than the Euro in the short and medium range, giving Ireland an advantage. Outsourcing the inflation to Brussels could dull the negative political and perhaps economic effects of inflation, while Ireland would still experience a favorable shift of trade balance with the UK.

The Euro works both ways, like any currency, but Brussels knows that it must be kind to its weaker members to keep the EU strong and attract the skeptical into the Eurozone. The UK and others may catch on in the long run and allow higher inflation to gain more favorable terms of trade with the Eurozone, but in the short and I think medium run, the Euro ought to help its members.