Posted tagged ‘Euro’

Rolling in money

January 21, 2013

The scene: Heathrow airport on Saturday, where I was waiting (with countless others) for a flight out of London, after a little snow closed most of it down; some bemused American travellers couldn’t believe that this really major airport was so easily overwhelmed by what they thought was a really minor amount of snow, but more of that another time.

Anyway, back to the scene. Four children were amusing themselves by rolling two-Euro coins along the floor, with the target of hitting a house of cards constructed some five or six feet away. When their flight was called unexpectedly, the parents called them away urgently. The children asked to pick up the coins first. ‘No time’, the father shouted. ‘Anyway, they’re only Euros.’

This is what they left behind (subsequently placed in a charity box).

lost euros

lost euros

No exchange

October 8, 2012

It’s probably a good thing that the UK did not join the Euro, given what has happened to the latter currency and its uncertain future. For all that, it is the currency of Britain’s key trading partners, and must be what any bureau de change trades in most. Or so you’d think.

Today I needed to give €60 to someone who is about to travel from Scotland to a country in the Euro zone. Easy, I thought. I’d go into the nearest bank and hand over some £50 or so and get the necessary banknotes. Job done.

Not a bit! In the first bank, a very nice lady at the counter looked simply stunned when I asked her for the currency. This was a request that had clearly never crossed her desk before. She was most solicitous, but this didn’t extend to having any solution. She absolutely couldn’t imagine how a bank would change Pounds for Euros. The whole concept was new to her. She would definitely look into this, totally, but only when her manager returned. I started to ask when that would be, but realised this was a waste of time and moved on.

Into the second bank, just across the road. Yes, the nice man behind the counter had definitely heard of Euros, and was absolutely willing to believe the transaction could be done. He had no idea how, but there was a supervisor somewhere who, he assured me, understood even the most obscure banking transactions and would help me, no doubt about it at all. So off he went looking for the supervisor. He returned, some ten minutes later, with the very keen supervisor, who was clearly willing to expand his horizons. Yes absolutely, Euros could be provided. First, was I a customer? Of course, I said, I’m here and am ready to do business, in other words a customer. I wasn’t a regulator, if that’s what he meant. No, no – did I have an account in this branch? No; in this bank, yes, but not this branch. Pursed lips, whistling noises, furrowed brows. Could I prove I was an account holder in that other branch? I could. OK then, he was willing to take on the Euro adventure, just this once.

So how much did I want? €60. More pursed lips and quiet whistling noises. No can do €60. €100, probably; €200, definitely. But alas, no €60. Well, I’ll be in Ireland again before long, so I can accept the €100. Off he goes on a search for this bit of currency. Another 10 minutes of my life lost. Triumphant return, clasping a sealed envelope said to contain the elusive currency; though for some reason, I mustn’t open the envelope there and then, which I was about to do, feeling the need to check it out.

Well, half an afternoon later I am able to give my friend the €60. But for goodness sake, does this really have to be so difficult? Do we really never change currency any more? It is true that I don’t, normally; I just use an ATM at my destination. But there must be others who, occasionally, need to get some foreign exchange before they travel, or to give or send to someone. Was I really making such an exotic request?


May 8, 2011

As the article in yesterday’s Irish Times by Professor Morgan Kelly of University College Dublin demonstrates, there is now growing scepticism as to whether the EU/IMF ‘bailout’ of Ireland is sustainable, and whether the debt levels taken on by the Irish taxpayer can possibly ever be discharged. Just as we are facing up to this, we learn that the Greek bailout has run into trouble, and that talks are under way on the possible restructuring of Greece’s debts. In this setting it may or may not be the case  – depending on whether you believe the claims and/or the denials – that Greece is contemplating leaving the Euro. A further ingredient in this unstable cocktail is the impact of all of this on the Euro’s exchange rate, which right now is at wholly unrealistic levels.

If public confidence in Ireland and elsewhere in the European response to the debt crises is to be maintained or restored, the terms of the bailouts need to be re-assessed. This is all the more important because the curtain on the really big shows has not yet been raised; I am not just referring to Spain, but also to Italy, where there are major (and so far largely undiscussed) financial issues. The suggestion that the Greeks, the Irish and the Portuguese are being sacrificed in order to save the larger Mediterranean countries could yet produce explosive results.

For the moment all the talk is about banks, debts, currency and budgets. Bubbling under, but not yet explicit, there could be a much trickier discussion about the nature, purpose and ethos of the European Union. The financial issues need to be addressed and the impact on the countries affected so far needs to be re-assessed in order to avoid much more fundamental problems for the whole European project. That project must be shown to be about something more than just protecting the balance sheets of German banks. There is much at stake.


October 16, 2010

One of the articles of faith, you might say, that has been around in Ireland over the past decade is that the country’s membership of the Euro has been a critical condition of economic success. Foreign direct investment was helped by the Euro, as companies could ensure that their position in Ireland would give them access not just to a single market but also to a single currency zone in which exchange risks and costs were removed. Then when the recent recession broke out, and when people started making comparisons between Ireland and Iceland, the received wisdom was that Ireland’s membership of the Euro would protect it from the worst consequences of the crisis.

But over this past while other views have also been expressed. David McWilliams, for example (if you can get over his rather irritating self-satisfaction and self-importance) has been arguing that the Euro is preventing Ireland from taking the economic measures it needs to adopt to restore competitiveness and that it would be better to leave the Euro zone, and others have picked up this theme. But now more commentators are beginning to wonder about the usefulness of the Euro to anyone at all, including the central and western European core member states.

We have not yet reached the point at which the future of Ireland’s Euro membership, or indeed the future of the Euro per se, have become a respectable topic for discussion. But as the recession remains resilient and worries about recovery prompt an ever-increasing focus on budget cuts and tax increases, should this debate be made respectable, if only so as to have an intelligent conversation in the open about why the Euro is still a good prospect?  If Ireland should stay in the Euro – which is still my default position – at least we should be able to articulate clearly why, and why the arguments to the contrary are misguided.

Casting off the Euro?

February 22, 2010

On 1 January 1999 the Euro replaced the European Currency Unit (a kind of virtual currency that you could trade for certain purposes but which was never legal tender anywhere), and on the same date the Euro became the official currency of a number of EU member states, which collectively make up the ‘Euro zone’.  Today the Euro is the currency of 16 EU member states and five non-EU countries. It is the second largest reserve currency in the world, and the Euro zone is the second largest economy (if you feel you can call it that).

Of course as we all know, Ireland was in the Euro from the start. I wasn’t in the country in January 1999, but when I arrived back in 2000 I was struck at the low level of ‘Euro-consciousness’. Back then the currency in the shops was still the Pound, and when occasionally I asked people whether they knew how much an item they were just buying in that currency would cost in Euro I was always amazed to discover that pretty well nobody had any idea or cared much. When the Euro eventually appeared as notes, coins and the balance on your current account in January 2002, it did so without very much fanfare; people just got on with it and the currency became the money in our pocket. You couldn’t help contrasting that with the convulsions caused by the Euro in the United Kingdom, where it isn’t even the currency.

But the relaxed way in which we adopted the Euro also signifies, I suspect, our lack of any close relationship with it here. In fact, we don’t seem to feel strongly about our currency. When the Irish Pound separated from the Pound Sterling in 1979 there was equally no big noise, and then when we lost it there wasn’t as much as a collective shrug or sigh of relief. It just happened. As a nation, we don’t seem to identify culturally with our currency. But one side-effect of this is that we don’t really debate or think about what it means. I recently asked a well educated friend what the issues were, in his opinion, in being part of the Euro zone, rather than having a separate currency. He thought for a moment, and suggested it was not having to change money when travelling to France.

But in reality that really is the very least of it. The significance lies, on the one hand, in having a currency which is less vulnerable to speculators aiming specifically at our economy, and on the other hand, not having independent monetary tools we can use at particular points in an economic cycle. So for example for much of the over-heated Celtic Tiger years our interest rates were too low because that suited Germany better (but probably worked against us). But then again, as Euro members we haven’t been buffeted around in quite the same way as Iceland has been over the past year or two.

But now some commentators, including David McWilliams, are suggesting that Euro membership is preventing us from staging a quicker recovery, because it doesn’t allow us to devalue our currency in order to become competitive. He has been beating this drum for a few weeks now. But when I ask people to comment, their eyes glaze over and they talk about football. We still cannot work up an interest, and if McWilliams is intending to start a national movement I doubt he’ll manage it. As it happens, I don’t think he is right anyway, but I do believe that we should have a better sense of what this currency union means for us and what we should be doing with it, or without it as the case may be. There are few things that are more important, and we should be much more active in our grasp of the issue. I have seen no significant expert response to the kind of talk McWilliams is promoting, and maybe it’s time there was.