European Tribune - Comments - To eurozone: leadership sucks, you don't need it. Right.

To eurozone: leadership sucks, you don't need it. Right. | 37 comments (37 topical, editorial, 0 hidden)

Re: To eurozone: leadership sucks, you don't need (none / 0)

Under two important scenarios - the remaining EU members, including the UK, join EMU by 2020 or else the recent depreciation trend of the dollar persists into the future - the euro may surpass the dollar as leading international reserve currency by 2022.

National Bureau of economic research

2022 is not exactly "soon". But then, you can't rely on economists' predictions, so we're back to guessing anyway.

"If you know your enemies and know yourself, you will not be imperiled in a hundred battles." Sun Tzu

by Turambar (sersguenda at hotmail com) on Tue Nov 27th, 2007 at 01:51:35 PM EST
[ Parent ]

Re: To eurozone: leadership sucks, you don't need (none / 1)

Are they suggesting a linear change from dollar to euro?

by Colman (colman at eurotrib.com) on Tue Nov 27th, 2007 at 01:52:56 PM EST
[ Parent ]

Re: To eurozone: leadership sucks, you don't need (none / 1)

Most of their scenarios predict a gradual change, but the one with the UK joining EMU around 2020 leads to a fast, significant change. Look for the graphs at the end of the paper.

"If you know your enemies and know yourself, you will not be imperiled in a hundred battles." Sun Tzu

by Turambar (sersguenda at hotmail com) on Tue Nov 27th, 2007 at 02:10:51 PM EST
[ Parent ]

Re: To eurozone: leadership sucks, you don't need (4.00 / 2)

Surely the transition from one reserve currency to the other would be highly unlikely to be smooth since it seems very likely to snowball as the herd changes from one to the other. Is there some form of inertia here ? Long-term bonds or something?

by Colman (colman at eurotrib.com) on Tue Nov 27th, 2007 at 03:18:49 PM EST
[ Parent ]

Re: To eurozone: leadership sucks, you don't need (none / 1)

The "gradual change" I mentioned was not meant as a total transition from dollar to euro, the dollar stays on top in these scenarios, the herd goes along and the euro never gets above a certain treshold. So, I wasnt really answering your question, I realize.

In the transition scenario, its not smooth at all.

"If you know your enemies and know yourself, you will not be imperiled in a hundred battles." Sun Tzu

by Turambar (sersguenda at hotmail com) on Tue Nov 27th, 2007 at 03:40:00 PM EST
[ Parent ]

Re: To eurozone: leadership sucks, you don't need (4.00 / 3)

Oh, ok. They're very brave to be making predictions about such things until 2022!

by Colman (colman at eurotrib.com) on Tue Nov 27th, 2007 at 03:41:10 PM EST
[ Parent ]

Re: To eurozone: leadership sucks, you don't need (4.00 / 4)

Well, the dollar has depreciated 60% against the euro since 2000/1. So at that rate it will be worth something like -20% or whatever by 2022, which is impossible. Britain will join the euro when it needs the euro to bolster the wealth of Britain, just like it joined the EU in the 1970s because it was completely on the ropes. The crap never stops. Tonight on the BBC World Service's Europe Today program the presentator talked about something going on in Britain and then asked a reporter how things were going in Europe, the Continent, you know, somewhere over there. And this on a program about Europe!

by Quentin on Tue Nov 27th, 2007 at 03:07:41 PM EST
[ Parent ]

To eurozone: leadership sucks, you don't need it. Right. | 37 comments (37 topical, 0 editorial, 0 hidden)

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