The financial crisis in Greece, Ireland and Portugal would have been strictly national in decades past, but since the circulation of the Euro currency, the matter is now a European Union problem.
The European Union (EU) began when six nations formed the European Economic Community (1957). [1] After Britain, Denmark and Ireland joined (1973), Greece, Spain, and Portugal became members (1980s). Once the EU replaced the EC (1992), Austria, Sweden and Finland were added (1995), followed by 10 largely eastern European countries (2004). [2] Most recently, Romania and Bulgaria pushed EU membership up from 25 to 27 states (2007).
Unlike the U.S., where adopting of the U.S. Dollar is a condition to statehood, membership in the EU, and the use of the Euro, are separate matters. Three EU members opted out of the Euro. Britain stayed with the Pound Sterling, Denmark turned down the Euro in a referendum (2000), and Sweden also voted no (2003).
Britain feared the European Central Bank in Frankfurt would set interest rates, and their own Bank of England would lose control. They felt they could maintain better economic stability, lower inflation, and less unemployment, by continuing with the Pound.
Sweden’s vote against the Euro was based on a fear recessions would cause big states like Germany to take over their economy, and they would lose their welfare system. The issue was so hot Foreign Minister Lindh was assassinated for promoting the Euro.
Today, even though the EU has 27 members, only 17 have adopted the Euro, as their currency. [3] While five European states, that are not EU members, also use the currency, [4] there remain 10 EU nations that have not yet converted. Seven however agreed, when they joined the EU, to replace their currencies over time. [5]
Despite the recent crisis in Greece, Portugal and Ireland, it is just a matter of time before the Euro is adopted throughout Europe. Once all of those admitted to the European Union in 2004 and 2007 start using the Euro, more nations will join the EU, such as Macedonia, Croatia Serbia, Bosnia, Albania and Iceland, and they too will adopt the currency. Those not seeking EU membership, like Norway Liechtenstein and Switzerland will soon become isolated as to their money, and pressure will build to accept it, or people will simply start using Euros as a matter of fact.
The first near decade of the Euro has been a major success. Along with the U.S. Dollar, it is now the world’s most valued currency. One can reasonably predict that after the EU solves the crisis in Greece, Portugal and Ireland, the Euro will only emerge even stronger than it was before the recent economic troubles began.
[1] Belgium, France, Luxembourg, Netherlands, Germany and Italy
[2] Poland, Hungary, Czech Rep., Slovakia, Estonia, Latvia, Lithuania, Slovenia, Malta and Cyprus
[3] Austria, Germany, Luxembourg, Spain, Belgium, Greece, Netherlands, Finland, Ireland, Portugal, France, Italy, Slovenia, Malta, Cyprus, Slovakia, Estonia
[4] Andorra, Monaco, San Marino, Montenegro, Kosovo
[5] Czech Rep. (koruna), Poland (zloty), Latvia (lats), Hungary (forint), Lithuania (litas), Romania (leu) and Bulgaria (lev)
Jeff Brinckman: Political and International Brinkmanship 
Leave a comment