time for the Euro uniting 36 European economies

Time for the Euro uniting 36 European economies

The EU has 27 Members now, is it really controversial to ask all to use the common European currency? If it is good for Finland it should be good for Denmark and Sweden, if it is good for Bulgaria it should be good for Romania, if it is good for Lithuania and Slovakia and Slovenia and Croatia what is wrong with it for Poland, Hungary and Czech Republic? We are now at 19 of 27, Croatia and Bulgaria on the way in so what the heck let us all get in. And asking all who want to join to float the Euro before is much better than having to ask them once as in the case of Hungary. Kosovo and Montenegro use the Euro successfully since 2002 and so please to add Serbia if deal to recognize Kosovo, encourage Albania, Bosnia and North Macedonia actually helps them to faster integration regionally and in the European market at little to no risk or costs for anybody. Adding Ukraine, Moldova and Georgia adds a bit of significance to the package but as they anyhow want to join EU and NATO and are blocked by some the Euro might be the best tool to integrate and reform and Europeanize them faster bypassing many naysayers and delayers. So 27 plus 9 future Members makes 36. The Eurozone has 15 Trillion $ GDP adding the 9 countries will add Serbia 60 WB6: 126.5 B$ GDP, Ukraine 155 Billion $ GDP, 12 Billion Moldova, 16 Georgia = 309.5 Billion GDP that is only half of Poland or Sweden so the risk is really not significant. Putin will not start a new war for the Euro in Ukraine and actually he is waging war since 2014 and a war for a currency reform that would be hard to explain even for Russia Today. The Russian funded populists will go into a frenzy but what the heck they always do and who cares about their racist paranoia, they lost in Germany and Austria recently and their main topic is migration and a richer Eastern Europe is very good for less migration and let us make the case. None of the countries will relocate to Asia and none of the problems in Eastern Europe will get less urgent by ignoring and postponing so let us tackle them now and offer the Euro as currency at current exchange rates which have reached market reality after massive devaluations from 2008 to2016. Now it is time for the Euro and attached stability, progress and prosperity.

Appeal to reason and solidarity for Sweden and Denmark to join

Rich net payers will be hard to convince but the moral case is clear. The strategic case is clear. The case for less migration from a richer Eastern Europe is clear. Let make that case: 15 Trillion GDP plus 300 Billion from enlargement 9, let us assume 450 plus 60 Million people makes 510 so we compensate for the loss of the UK and let us assume the Euro will accelerate prosperity and convergence on central Europe so we can reach EU average GDP capita net $ of 40.000 by 2030 Euro 36 reaching 20,4 Trillion GDP $ by 2029? Sure it will be rank 3 after the USA and China by then but we will stay relevant in this scenario. Better results are possible if we manage to complete the Energy Union, cut corporate taxes and unite Europe further in terms of Infrastructure Investment from fast railways to energy transmission, digital infrastructure and highways and railways working efficiently West to East to allow swift dual usage NATO and EU. Sure it is not only the Euro, it would help to conclude the 10 key missing FTA with USA, Mercosur, ASEAN, AU, GCC, India, Pakistan, Australia, New Zealand, Uzbekistan and Tajikistan a trajectory which would certainly help to convince the free traders in North and East to join the Eurozone.

A 2nd Recovery Fund – the European Growth and Unity Act

Following up on the success of the Corona EU recovery Fund it is clear we need a 2nd such package after the French elections, that one focused on Eastern European dual usage infrastructure to fast track NATO access to the Eastern Front with Russia in Ukraine and to unite the Balkans and Ukraine, Turkey and Eastern Europe effectively via rail, road, energy and digital with rich Western Europe in 2020s and by this way convince the last doubters in Warsaw to join the Eurozone and win hearts and minds in Kyiv to adopt the Euro as currency for Ukraine. And it complete the EU Infrastructure system if not by 2030 but by 2040 to be more or less complete and modern from Mariupol to Brussels and reach to Tbilisi via Turkey and having the Balkans fully connected to EU and by them all 9 should be in EU as well as full Political Members once they join NATO.

EU, join NATO and be useful for peace in Eastern Europe by the Euro

The EU, as Ally of NATO – able to contribute to peace East at the front with Russia The EU as European pillar of NATO, actually it is time for the EU to join NATO as fully Ally in 2023, yes we can make a contribution to the region between EU and Russia. We can do very little in relation with China but in this key conflict zone the EU can make a difference, with the Euro and continued EU and NATO enlargement made possible the prior Euro adoption in this crucial region. 

EU27 plus 9 = Euro 36 but what about the UK will it return to EU37

This should be an open invitation to our NATO Allies. But for sure the UK must be clear, next time it is the Euro first. So rejoining must be on the basis for prior Euro adoption as currency in the UK. This is the condition. No half in and half out UK in EU again. Fully in yes, that means the Euro for the UK. Sure this does not look possible right now but let us see later the decade once Ukraine has adopted the Euro and let us see how the UK is doing during the 2020s. But the offer should be there for return and the condition as well it the Euro first.  And the same is true for Scotland if it considers independence, which is not in the EU interest, anyhow so please it is the Euro first before any such debate. Scotland and Northern Ireland, Wales and Gibraltar should anyhow consider a kind of dual currency regime for their economies which in case of Northern Ireland and Gibraltar would be very useful given Spain and Ireland are in the Eurozone and for sure technically the dual currency system would be easy for Scotland. Once this is done, let us see but no more UK half in, it is the Euro that matters most for us.

North America is much richer and has only 3 currencies

Free Europe, NATO Europe without Russia and Russian annexed or occupied territories from Belarus to Crimea should aspire to catch up with North American prosperity at 60.000 and we are at 35.000 today. This would help us in the 2nd Cold War Russia wages against us since 2008 to win it as the first Cold War with the Soviet Union, economically via a steep and ever high prosperity differential between Free Europe and Russian Europe. Russia is today at 10.000 $ – EU at 35.000 and North America at 60.000 – the USA at 63.000. The road to achieve not only 3,5% of Russia as today but making sure that eastern Europe especially Ukraine is 3 times richer than Russia – that is a big task but that is the key benchmark for winning the 2nd cold war. Ukraine is at close to 3.500 $ GDP per capita so just 10% of EU, just a one third of Russia so only inside EU and with the Euro Ukraine can achieve such progress as to make sure Ukraine can repeat the German economic miracle and be 3 times richer than Russia and Russian occupied Ukraine. That is one of the reasons Russia is so opposed to Ukraine adopting the Euro and joining EU and NATO, as it would be very meaningful for the Russian, demanding similar freedoms and prosperity. The only way for Ukraine to achieve that is by adopting the Euro as currency in Ukraine. And together with Ukraine and the Balkans the EU is much more economically united and efficient and we can reach similar prosperity levels as the US or at least catch up as in the last decade we fell back due to our series of major external shocks and resulting paralysis and massive Russian effort to hurt Europe in all aspects. I remind Russia waging war in Georgia in 2008, celebrating the GFC, building OPEC plus to hurt us hard when we were shaking in 2009, Russia messing in Greece during the debt crisis, intervening in Syria, bombing millions of Syrian out of their homes to set them walking to Europe, funding Brexit, spreading disinformation, funding and supporting Trump, funding LePen and Italian, German and Austrian populist and destabilizing the Balkans, waging war in Ukraine and destroying the post World War 2 order by annexing Crimea.

 Ukraine adopt the Euro – key to win the 2nd Cold War

We had a rough decade due to Putin returning to power in 2012 and abusing the Russian state as a revanchist tool against the EU and undermining EU unity with all tools available from the energy weapon to influence buying to open war in Ukraine.  Yes and North American prosperity is based only on 3 currencies so logically in Europe the Pound can be compared to the Canadian Dollar, the Euro to the US Dollar and the Mexican Peso to the Turkish Lira, in North America they have the new NAFTA USMCA and we have a Post Brexit FTA with UK and a Customs Union with Turkey and the EEA and DCFTA so much to be done in terms of continent wide unity key in Europe, key to reach similar prosperity levels as in North America, again key to win the cold war and make Russia looks so much less attractive compared to amazing Free Europe. We have some way to go to make Ukraine so attractive but with the Euro as currency it is possible and it is certainly worth the effort. Do we want to wage this 2 Cold War nobody in Europe wants from the first place? Do we want to wage it endlessly? With Ukraine using the Euro we will win it by the end of the 2030s simply by Ukraine being so successful. Maybe it is a dream but certainly a dream worth having and persuing.

Published by GunterFehlinger

Austrian Economist and pro NATO and pro European activist Podcast PaxEuropeana

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