The Independence of the European Central Bank

A single world currency would also put thousands of people into unemployment. Everywhere money is lost on currency trading fees and exchange fees, money is made by firms working in that domain. In every country in the world, there are bureau de changes, which are big employers.

More importantly, a single world currency, assuming it could be brought about, would unbalance the world economy significantly. European markets were not hit as badly as the US by the sub-prime mortgages crisis only because it happenned in dollars and because the euro is strong. More problems would come from developping countries that speculate on their currency to boost their living standards, and where crises always occur eventually, such as Argentina. In a world with a single currency, the rest of the world would effectively bail out such countries as their incredible inflation rate would be paid for by the rest of the world.

The only reason the euro is working is because European economies, single currency or not, are all solid, relatively stable first-world economies, which the ECB can pressure to keep inflation low, and that is only working because of the stability and growth pact, which could not exist at an international level. European economies can work with a single currency because economies in the european union are the most interconnected in the world. The French and German economies are the biggest joint venture on earth (I think I read somewhere that Germany owned about 40% of France and France about 30% of Germany. I'm not sure the figures are still true, but that gives you an idea).

And I haven't even started about the utopia of getting 192 countries to agree on this. Sheer idealism.

The Independence of the European Central Bank

The independence of the ECB is crucial to the continuing success of the European Monetary Union. Not only is this important for Europe, it's important for the world as we look forward to a Single Global Currency managed by a Global Central Bank within a Global Monetary Union. The Global Central Bank also will need to be independent of immediate political winds and keeps its focus on price and monetary stability. The Single Global Currency will bring huge benefits to the world :
– Annual foreign exchange transaction costs of $400 billion will be eliminated.
– Worldwide asset values will increase by about $36 trillion.
– Worldwide GDP will increase by about $9 trillion.
– Global currency imbalances will be eliminated.
– All Balance of Payments problems will be eliminated.
– Currency crises will be prevented.
– Currency speculation will be eliminated.
– Currency fluctuations, and the need for hedging, will be eliminated.
– The need for foreign exchange reserves, now over $4.3 trillion, will be eliminated and these funds can be used for more productive purposes than maintaining an inefficient foreign exchange system. If a monetary union in Europe works well (still an issue for a number of economists) for 13 countries, soon to be 15 and then 22, then why not plan now for a monetary union for 192 countries ? For more information, please visit the website of the Single Global Currency Assn. at www.singleglobalcurrency.org. Our goal is implementation by 2024 and we published the book, « The Single Global Currency - Common Cents for the World » and invite comments, suggestions and criticisms.

The Independence of the European Central Bank - commentaires

The Independence of the European Central Bank

The Independence of the European Central Bank