Credit where credit is due: the EU gets a lot of flack for being bureaucratic, hidebound, sclerotic, whatever, but the single currency has been a success and it's still expanding, 26 years after its creation.
Also, the addition of Bulgaria means it's almost possible to travel from Spain to Greece entirely through the Eurozone, with only a thin sliver of Serbia or Macedonia in the way. (Assuming we include Montenegro and Kosovo in the Eurozone: technically they aren't, but for all practical purposes they are.)
It'll also be interesting to see who's next. Czechia is not far off but doesn't seem to be in a hurry, while Romania wants in but still seems to be a ways off. Poland and Hungary will stay outside unless there are major political changes.
Polish here, very much against adopting the euro until our standard of living and growth rate matches Germany (no at least not for next 10 years). Why? Because the disadvantages far out weight the benefits for developing countries.
The biggest issue is giving up one of the biggest instrument of control over the economy to a supra-national non-democratic organisation. Surely the monetary policy will follow what is best for the biggest economies (or at best the average) while local policy is way better tweaked towards local needs. The best example of this is money supply. The money supply ideally should match the economy growth rate +X so there is tiny inflation (and definitely no deflation). This growth rate is very different in "old EU" and "new EU" countries. So what happens? In time things get more expensive much faster in countries that grow faster while incomes stay the same. This is a huge negative and this is on top of price increases happening on "day 1" due to rounding up during conversion.
Historically the biggest benefit that was sold as something to outweigh this was a claim that "inflation will be low" and big inflation spikes are impossible. This came about from the short sighted view that all inflation stems from printing money and by giving up our control over it to somebody else we somehow "protect ourselves". This was proven wrong during covid when inflation was vastly different in let's say Latvia and Germany despite sharing a currency.
So what is the bottom line? Is euro all bad? No, it is very useful so we have a common currency in the euro zone that is not controlled from across the ocean. This is a huge benefit, but the same benefit is achieved by having it be a second currency like it is now in Poland rather than the only currency. (you can pay in euros in almost everywhere if you prefer as well as get it from cash machines etc)
Being able to buy groceries with euros is not a strong, or even related, argument to the point you're making. Even ignoring the real economic cost of having two currencies, there is no serious economist that would argue Poland joining the EUR zone is negative for Poland (as opposed to for stronger EU economies). Every single historic metric points in the other direction. Poland's economy is maturing and strengthening and median household income is slowly reaching parity with neighbouring countries so this particular argument may only hold for maybe another decade but until then it's a bit misguided. Also, not for nothing but the Polish economy is mostly doing as well as it does because of the metric ton of EU subsidies injected into it the past decades. Poland is one of the largest net receivers of EU money since 2004 so arguing it or its single currency was somehow a net negative to Poland is, and by extension an odd argument to make for someone benefiting from the above as a Polish citizen.
You have to be careful to make a distinction being in the EU and using the Euro as your currency. You can benefit from the EU common market, with its uniform rules/standards, easy capital flows, subsidies, and industrial policy. All without using the Euro as your currency, and being subject to the monetary policy of the ECB.
Being in the EU without using the Euro has been pretty good for Poland.
They are free to be. When joining the EU, Poland accepted to join the monetary union at some point, but there is no date set, so in theory it can be infinite. And with its current strategy to drastically modernize and increase its military force, there is no doubt it will not met the financial criteria anytime soon so nobody is worried about that.
> Even ignoring the real economic cost of having two currencies, there is no serious economist that would argue Poland joining the EUR zone is negative for Poland (as opposed to for stronger EU economies). Every single historic metric points in the other direction.
The inability to set monetary policy is a strong argument. Just ask Greece (and Spain):
Also, not for nothing but the Polish economy is mostly doing as well as it does because of the metric ton of EU subsidies injected into it the past decades.
That's one part of it. The other part is that the country had just as much human capital and economic potential as Western European states, but was held back artificially by the Partitions, WW2, the Soviet Union, and the lack of Marshall Plan investment that Western Europe received.
Sorry, but the narrative of "Poland is only doing well because the EU is helping" (of which German companies are benefitting from tremendously) is a historically narrow way to analyze the situation.
Well, it's a fact, not a narrative. I think the actual debate is whether or not boosting economies of countries in the EU that for one reason or another were or are behind on the curve is a net win. I think it is. Just as it is perfectly justified for other countries to feel a bit hard done by if that same country after an estimates 280 billion euro injection is still rejecting the shared currency of that body.
The point is that "feeling a bit hard done by" rings a little hollow if the country feeling this way is the reason the recipient country needs investment in the first place. 280 billion euro is still less than a third of the estimated amount of damage from WW2 alone.
You can't possibly compare Poland to Bulgaria with 1/8 Poland's GDP and 17% its population. For Bulgaria the Euro is completely fine, as the Lev has been pegged to the Deutche Mark and later the Euro for ages. It's exports are basically raw materials and grain. Most of the other stuff they produce is sold domestically. I think I've only seen Bulgarian sunflower oil, mineral water, ketchup and pasta in stores outside the country. For a state with so feeble exports and a pegged currency it really doesn't matter, only adds up currency conversion fees. They might want to attract more tourism and investments.
I find his view a bit polarized, but can't really see him comparing those countries at all.
But if we talk about Polish-Bulgarian exchanges:
Those two countries actually have more or less the same numbers of Euro spent on import and export between each other. Bulgaria doubled export to Poland in just 2 years. Food products are important, but Bulgaria also exports to Poland many metals, mechanical and electrical devices, pharmaceuticals...
The biggest Polish import from Bulgaria in 2023 were almost a billion Euro on guns and ammunition. "Seeds and oily fruits" (whatever is the correct translation) were 20x less than that.
Bulgaria has a significant services sector. Not only tourism but it is a popular near-shoring destination for many western European countries, especially Germany.
Yes, but it's still agri products sold for pennies. Compare that to motor vehicles, car parts, furniture and sanitary hardware that Poland exports. Also, I never ate Shopska salad made with Dutch tomatoes in Bulgaria, even in restaurants outside of Sofia. I can tell the difference, they almost always served the good ripe stuff that has taste, not the watery green variety or the huge Greek tomatoes with air gaps inside.
> The biggest issue is giving up one of the biggest instrument of control over the economy to a supra-national non-democratic organisation
This is the point. Germany managed to set up a really independent central bank (which is a non- democratic, bureaucratic, etc… thingy) and inflation was at the target for decades. Italy, France, etc… didn’t, and inflation was 2-3 point above target and above the German levels. So they joined the Euro, which has a governance very similar to the Deutsche Mark.
To this day, inflation in European countries outside the Eurozone is higher.
> Germany managed to set up a really independent central bank (which is a non- democratic, bureaucratic, etc… thingy) and inflation was at the target for decades.
And Germany being overzealous in fiscal and monetary policy has stagnated growth and limited policy options. Look at all the rigmarole that had to be done so that Germany could start considering military spending to deal with the new global situation.
(Heck, if Republicans would actually be interested in fiscal discipline, perhaps they should move to Germany.)
> And Germany being overzealous in fiscal and monetary policy has stagnated growth and limited policy options.
German fiscal discipline is a tool of strategic independence. It started in ‘49 when they knew they would eventually had to reabsorb East Germany. Today it allows them to re-arm without having to ask permission.
Over the past 20 years, Germany grew more than Italy, France and the UK.
Slovak here living in Czechia. Adopting euro would give you a seat at the ECB granting influence over monetary policy in the whole Eurozone. You'd also get cheaper money (think mortgage rates going from ~7% (current rates in Poland) to less than 4% (current rates in Slovakia)). Do you have to exchange money when traveling abroad? Now imagine buying/selling stuff abroad as a company and multiply that by a lot. You get the picture. For countries that deal mostly with Eurozone based countries (which are most countries in Europe) you get massive savings that'll make the country more attractive to outside investors. Any potential price increase would be dwarfed by the rise in wages. All of this happened in Slovakia (and would be great to happen in Czechia if not for previous eurosceptic governments that massaged public opinion heavily). Sadly, the successive corrupt governments of Robert Fico ate many of the benefits to ordinary folks and Russian propaganda machine left some people questioning the value of euro and EU membership. But even 15+ years after adopting € the approval rating in Slovakia is very strong. All of this would be much worse without the euro. Personally, I'm all for everything that gets Europe closer to federalization and strengthens it.
>Slovak here living in Czechia. Adopting euro would give you a seat at the ECB granting influence over monetary policy in the whole Eurozone.
This is my argument exactly. A seat gives a certain small amount if influence, the resulting policy will be an approximation of what is best for everyone. This may be pretty far from what is best for a developing country with fast growth if the majority is well developed countries with low growth.
Imagine you and your neighbour decide to pool your money and invest together. He is 65 years old and has 50k EUR, you are 21 years old and you have 1k. He prefers to put his money in a bank savings acct that will allow him to withdraw anytime (he's retiring soon) and he doesn't want any risk. You on the other hand don't mind risk at all, but you need a high rate of return (stocks would be good for you, maybe of the more "adventurous" kind).
If you pool your money he will have much more to say so you end up maybe with a 6 months term savings deposit to get a little more gain. You're both unhappy because that is not enough profit to you and it still locks up his money preventing him from choosing an early retirement. Compromises sometimes work for both sides, sometimes they don't work for anyone...
>You'd also get cheaper money (think mortgage rates going from ~7% (current rates in Poland) to less than 4% (current rates in Slovakia)).
You can get Euro denominated mortgages in Poland as well. As well as Swiss Frank, Dollar etc. A country does not have to get rid of its currency for people to enjoy lower interest rates in other currencies.
You can make an argument if you earn in PLN and take a mortgage in EUR it exposes you to the currency risk and it does. It is your personal choice. But there are plenty of jobs (usually higher paying) that pay a set amount of EUR or USD and it's often these kinds of people for whom these mortgages make sense.
We even have a long running scandal involving almost a million of people that got Swiss Frank mortgages over a decade ago that had interest rates below 1% and the banks structured these deals in such a way they made a killing on exchange commission. Basically people didn't realise they had to pay in PLN and the mortgage provider would convert to CHF applying their exorbitant conversion rates. There was no way to just pay in CHF. But this story is over a decade old and people have learned the lesson.
The tradeoff between monetary sovereignty and eurozone stability is real, especially for economies still catching up. That said, there's also a risk in staying out too long. You still get a lot of the downsides (imported inflation, capital flow pressures) but none of the influence. It's a weird halfway state...
Eventually they will catch up to the level of GDP Germany have and then they will start to roughly match their growth rate, over time. It is a lot easier to catch up than to break new ground when it comes to gdp per capita.
I agree, It think Spain adopted the Euro too soon and we'd have weathered the GFC better if we still had control of our monetary policy at the time. And we didn't grow as much as we could have in the preceding boom phase.
Another Polish here: truth is, whether we have a single currency or not doesn't matter as much as people think it does. For most people, it's about symbolism, not about practical economic consequences. I guarantee you that average person has no clue what it really means for the economy to adopt euro. BTW the argument "let's wait for our economy to catch up with Germany" is just deceitful because there will always be differences between economies. Imagine arguing that Nebraska shouldn't be using the dollar until its economy catches up with California... which is going to happen "not in my lifetime".
I am strongly pro-euro. Why? Because again, economic consequences are way smaller than most people think, and it's about symbolism. It's about slowly marching towards European Federation instead of NIMBYism that prevents EU from actually living up to its full potential. Imagine a world where the entire European continent is a single political entity - we'd be unquestionable superpower. But no, because "muh independence", and the end result is that we can't do shit on the international stage because we're too busy arguing with each other.
But EU becoming federation has far bigger challenges than Poland not adopting euro.
Adopting euro has political consequences, first and foremost, not "symbolical". It is quite sad that people and leaders in our country mostly conflate politics with symbols and gestures, because that is causing us to be what we are - losers.
That's a bigger philosophical question, but I assume that in the context of this discussion "being a rich and powerful society is good for you" can be taken as an axiom.
> In time things get more expensive much faster in countries that grow faster while incomes stay the same. This is a huge negative and this is on top of price increases happening on "day 1" due to rounding up during conversion.
Could you perhaps expand on this effect, ideally in a mechanistic manner, or point me towards a source that explains the influencing factors and outcomes? I am trying to understand the different processes at hand.
I've learned this long time ago. Probably early 2000s when there was the debate about joining the EUR.
I thought the basic explanation about money supply was sufficient, but I can try expanding on this.
A typical medium sized country having its own language that has had its own currency for a long time is much more internally economically integrated than externally. We can simplify this by saying huge majority of businesses take part in economic activity within the country, not outside.
This gives us some basis to consider it in separation to it's neighbours even if they are in a single market (smaller countries have less separation, bigger countries more, many factors influence the depth of separation but it exists strongly in countries like Poland).
So this is why it makes sense to talk in terms of money supply in terms of this "island" of economic activity regardless if it has its own currency or shares another.
The we have certain amount of GDP growth each year. More goods and services are produced each year. But simplifying, let's say you and your neighbor are on an island and you have 52 tokens with witch you trade. You catch fish and he works in a field of wheat. You pay him 52 tokens over the course of the year for his wheat and likewise he pays you the same for the fish (one per week for a price of one token).
Suddenly you find a net on the beach and you don't need to catch the fish with a DIY rod. You can catch 5 fish per week rather than 2 of which you sold 1. Now you have 4 fish per week to sell, but the guy only has 1 token per week. So if you want to sell all your fish you have to drop the price to 0.25. You do double the work (the nets are heavy) you get 4x the fish and yet you get the same tokens and wheat. Not fair. So you don't catch more fish.
This is why we need money supply to grow (or be procured by exports, but let's leave this complex topic for now) if the total of goods and services grows too. Ideally at the same rate or slightly more so goods do not depreciate in price.
I already mentioned one reason why deflation is bad, it demotivates producers from growth. Second reason is many costs are static, so it may send them into bankruptcy if others sell more than them at diminished prices. The third reason can also illustrate why we need some inflation.
The inflation is necessary for people to have an incentive to invest their money rather than stuff them into a mattress. If we have deflation it literally makes sense not to spend your money today, because you will get more goods for it tomorrow. Until everyone does this and prices go so low half of business go bankrupt.
So this is why you need money supply to slightly exceed the GDP growth. This subject can be as simple or as complex as you want. But there are basic truths that work on all levels of complexity. This is one of them.
Denmark have pegged the krone to the euro. They haven't adopted it, but tied themselves to the Euro. They still maintain control of their currency, but most of that control is used to maintain the value to the euro.
That's because the powers that be want the euro, but the people didn't. They were asked in 1992, 1993 and 2000; and effectively they said no to the euro every time (yes, I know; in 1993, the euro was specifically opted out, but the fact that it was approved when the year before a referendum with the euro was rejected suggests – at least partially – that it was a rejection of the euro (among other things)). Denmark thus came into the EU with 4 opt-outs (one of which has since been rescinded (defence) and one which turned out not to matter (union citizenship)), and they can only be removed with referendum (see for instance the euro one in 2000).
Prior to the adoption of the euro, the Danish crown was pegged to the D-mark (since about the mid-1980s), because Germany was the biggest export market for Denmark (still is), and thus having a currency that's stable towards what the Germans are using has been good for Danish exports (less sure how relevant that still is). (Sidebar; had the original motivation of Alternative für Deutschland been successful and abandoned the Euro for a return to the D-mark (neumark?), it would have put Denmark in an awkward position.)
This all reads as symbolic nationalist policies with an added burocracy thus costing more than it should. "We need own coin to control [insert nationalist thing here]" but in practice you won't and never did.
The last time I was in Denmark my bank nicely charged me for the conversion despite the coin being fixed to the euro. It is just a money costing machine which adds no value.
If being nationalistic means preferring that currency in your country is controlled by the government you have elected and not by ECB that you have zero control over, then yes.
The same way as having the seat in the UN's Security Council gives you the influence, but in the end France has little to say when compared with US or China.
Germany even without any representation in ECB will have much more to say than other countries. Because in the end it is a real political power that allows anyone to make decisions.
It is not fully pegged, and though it ties their hands somewhat, this is not "effectively" the same as adopting the euro. Krone still can be un-pegged if Denmark decides to do so.
As noted, the politicians wanted to switch to the euro; but it's the voters who said no. Twice or thrice, depending on how you count. That isn't a case of "symbolic nationalistic policies", but rather a state apparatus trying to get around the rejection, whilst sticking to the text of the referenda (but perhaps not the spirit of it).
If (when?) there's another Euro crisis, being pegged gives you a lot more room to manoeuvre than being actually in the Euro. If necessary de-pegging would be disruptive but very much possible, if you're fully in the Euro then you are riding the train to its destination whether you like it or not
De-pegging would require selling your euro reserves and buy other currencies. I wouldn’t call it disruptive but a disaster. You’ll end up getting enormous loans that generations after you will have to pay.
You are overcomplicating this. Poland is nepotist kleptocracy, EU and NATO membership away from Belarus. They should adopt euro since yesterday, it's strategic goal in line with membership in EU and NATO.
Switzerland can have their own currency, where inflation over 2% is a scandal. Sweden can have their own currency, they produce their own cruisers, submarines, fighter jets, and artillery. Poland kicked out their last baby boom into emigration and now have the same demographic and immigration crisis as geriatric Italy and Germany. They have nuclear power plant company operating with its board receiving executive salaries for fifteen years now and... no nuclear power plants. Accumulated inflation since pre Covid era is 43% and doesn't look to be stopping. Own currency enables enormous fraud and creates class of oligarchs.
Switzerland is not in the EU but is in e.g. Schengen Area (which seems to be disintegrating right now). They are in a luxurious position to cherrypick whatever they want.
The EU institution because of pragmatic and systematic properties. Ultimately to say something is democratic or not is a subjective opinion, but EU proponents have made the mistake to brush such criticism away.
Since then the EU is mostly developing in a wrong direction.
The EU Parliament is directly elected. The EU Council is comprised of EU country head of states, which are all directly elected. The EU Council and EU Parliament then elect the EU Comission.
The EU Parliament is not democratically elected because votes from member states have a different weight. The election is free but not fair. It's also one of the few parliaments that can't propose laws on their own but can only veto laws proposed by the EU Commission.
The powerful EU Commission being appointed by governments (and again only approved by the Parliament) is a form of executive federalism. This makes the chain of legitimacy longer and longer which is hardly positive for democracy.
Small states are usually given more weight in parliament. This is commonly considered more democratic.
The commission is elected by the parliament. This is democratic.
Would it be an improvement if parliament could propose laws and commission members. Maybe. But saying that this makes the EU undemocratic is unreasonable.
in most contries votes have different weights. look at the US, or other western countries where minorities for example are boosted to be represented in the parliament. judging by this no country is democratic.
In the US, votes in the congress, senate and president have exactly equal weights between states? Not an expert but I suspect we're in the kettle-pot area here. Not even getting into abysmal voting procedure/implementation which would be inconceivable in the EU.
To you it may be democratic enough. Not for me and the parliament lacks legislative initiative which in reality means the commission steers the ship.
It is more of a bureaucratic technocracy with democratic fig leaves. People often attribute competence to technocracies, but that is an illusion.
Also I don't believe you can move up government function to layers above your national government and still call it representative.
In reality the culture and circumstances of parliament members is too far removed from the voters. I also cannot know the other representatives, so my voting decision will always be restricted to a shallow popularity contest. But as explained, this doesn't matter, because the elected representatives cannot implement any agenda.
> In reality the culture and circumstances of parliament members is too far removed from the voters. I also cannot know the other representatives, so my voting decision will always be restricted to a shallow popularity contest. But as explained, this doesn't matter, because the elected representatives cannot implement any agenda.
That’s an odd thing to say when there is a real chance of the commission failing a confidence vote this week. We might end up with a new commission due to the conservatives colluding with the far right to abandon the climate agenda entirely.
This is a very concrete consequence of the voters electing right-wing parliamentarians.
Democracy is a real democracy if voters feel represented. Perhaps there is a voter here and there that has an objective perspective if representation is enough or not. But I wouldn't bet on it.
But you said yourself, that there are different lavels of directness. That is the core argument where everyone has different expectations.
The core argument sounds a lot like "it's not true if I don't feel like it's true". Which of course decades of anti-eu parties and ads can have a massive impact on.
You don't have to engage with this kind of criticism but it isn't entirely recent or new nor too complicated ot understand the issues people might have.
I think there's a reality for (visiting) consumers, Schengen has more value than the currency union, at least if you're not a user of cash.
My experiences in non-Euro, Schengen countries is that all payment terminals offer me the choice to pay in Euro or the local currency. In many cases in tourist areas (of Czechia, Poland, and Bulgaria) I only encountered terminals that asked for payment in Euro.
Schengen is incredibly useful, especially if you have to transit through several countries. It's also true that the decrease in cash usage has reduced the benefit of the euro.
However, the benefits of a single currency go beyond cash. It's also about understanding prices. You see a sign for coffee and it's 1199 Hungarian Forint -- or it's 14.99 Polish złoty. It's not clear at all what those numbers mean. Sure it's possible to pull out a currency calculator app to see what the rate is today and what it means in euros. It's not an insurmountable problem, but it is bigger than a mere inconvenience. It's constant friction on not really understanding what's going on. If those coffee prices were instead 2.99 € vs 3.53 €, you would immediately see that the Polish coffee is 20% more expensive.
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As for the payment terminals offering to pay in Euro, as others have already noted, that's a scam. There is a hidden fee, usually around 3.5% - 5.0% of your total, that you get charged for this "convenience". Refusing this and paying in the listed currency will mean that your own bank will do the conversion, which is basically always going to be far cheaper.
Unfortunately this currency conversion scam is so lucrative that even big brands engage in it. Amazon for example asks what currency your card is in. If you select some currency other than what this sepecific Amazon's listed prices are in, well, you're in for another juicy hidden fee, this time to Amazon.
This isn't my experience, so I think people should pay attention to their specific situation.
Granted, I haven't recently been to any EU country without the Euro, but my main bank charges extortionate conversion fees, 2.sth%, with a ridiculous minimum per transaction.
A few months ago, I've ordered something off Amazon UK (while in the UK) and the conversion they offered was very close to the official GBP / EUR exchange rate, way below my bank's minimum. The price wasn't high, either, on the order of 10 €.
My experience is similar to yours. Banks and credit cards here, love to charge a 7% (total) currency conversion fee. I happily allow Amazon (1%), and basically everyone else to do this as it is much, much cheaper.
There are different financial experiences in different countries.
Non-Schengen EU Passports are basically the same thing for e.g. inter-railing or other journeys involving multiple border crossings.
Also in Europe people use the likes of Revolut to set up virtual native currency accounts on the fly (with IBAN) with FX free transactions up to a certain level per month dependent on tier.
> Non-Schengen EU Passports are basically the same thing
It's not about passports, it's about border controls within the area. Before Schengen you would have to wait for hours and hours in a queue at the border. Now that border check doesn't exist anymore. The check doesn't exist regardless of what passport you have, there's just nobody there.
It's usually better to pay in the local currency than Euro. The currency still has to be exchanged somewhere, and the banks usually have better rates than the terminal operators.
I’ve even had my credit card provider message me to warn me before after putting a couple of transactions through! Hardly an unbiased source, but their rates are much much better
Hm I always wondered about what this choice actually translates to, what’s the underlying logic determining how what I pay in -> where conversion gets made?
It's called DCC and you are legally required to be offered a choice. If you choose the local currency, your home bank does the exchange and the rate is basically always better. If you choose your home currency, the terminal operator does the exchange at a terrible rate and often slaps on a hefty fee for the "convenience".
To make things more complicated: it's not necessarily your home bank making the exchange, it can also be your card scheme (e.g. MasterCard/Visa/...). However, this is something you don't get a choice in. Your bank has an agreement with the scheme which foreign currencies are handled by whom. In any case, the rates used by the schemes are generally also pretty good.
The lack of direct documentation/instructions or link in the terminals to official rules strikes me as horrible ux. You basically just have to be in the know or know who to ask?
It is horrible UX and one might argue intentional. The terminals are provided by the acquirer, i.e. the same party that stands to make extra money if you let them handle the currency exchange.
In Germany, there was a sliver of time where stores essentially taped a piece of paper to terminals with instructions and big red arrows to select a specific scheme because that would benefit the store (and not cost the consumer extra). It didn't really stick, however. I suspect because it was two extra button presses and the consumer wouldn't notice either way.
Payment terminals can offer whatever currency exchanges they want, but usually it's just a way to fleece you on the spread, nobody is doing you any favors, it's just that whoever in the chain gets to perform the exchange gets to set the fees and the spread and most people get confused by currency exchange so it's in every middle man of the chain's interest to be the one to perform it and get the spread themselves.
If you use your bank's rate by paying in foreign currency then this is usually fair, at most they will add a 1% foreign currency transaction fee.
When it comes to exchanging cash, avoid currency exchanges at places like airports, tourist hotspots, etc. as they will usually offer worse rates than elsewhere.
Except if you are a Finnish person who lives right next to Sweden (SEK) and Norway (NOK) who are not using Euro (and Russia but that's a different story).
I have always felt it was a mistake allowing countries inside the EU but not the currency. But when one looks at the dates - and they are 6 years apart - it becomes clear why. I wonder how it would have turned out had Euro and EU been launched together. Would it have been "a package" or optional?
All EU countries are required to join the euro. This was agreed in the 1992 Maastricht treaty when the EU was founded (and the EMU, which was the starting point of the euro). Only Denmark and the UK negotiated an opt-out at the time.
Only problem is that there are no deadlines and it's up to the country to make a plan for adopting the euro.
Are you sure it's in Maastricht? I think the automatic requirements met -> has to join were added in the Lisbon treaty, Maastricht just established the requirements but didn't force joining, which is why some older eu countries which would meet them haven't joined yet.
what? the ECB is buying state bonds. maybe thats the reason the ECB is its own state, no authorities allowed to enter the building. wondering how they will audit the ECB. ahh right, they wont. :)
Poland will not adopt it in foreseeable future because it makes no sense: the Polish currency (zloty) acts as a kind of bumper in difficult times. It's very simple: something bad happens like a crisis or a war, investors immediately sell assets deemed as risky (such as zloty), zloty goes down by x%, and automatically Polish products and services become more attractive by x%. This all happens by itself. So for the Polish economy it's a no brainer.
For people themselves, they're not so keen either as they know well adopting euro was abused in other countries to increase prices (and not just round them up a bit). So basically nobody wants it, even if there are a few real benefits of joining, such as potentially lower mortgage rates which are among the highest in the EU).
> Credit where credit is due: the EU gets a lot of flack for being bureaucratic, hidebound, sclerotic, whatever, but the single currency has been a success and it's still expanding, 26 years after its creation.
For certain definitions of "success". The 2010s weren't such a great time:
Euro was part of the Maastricht treaty which formed the EU as we know it today in 1992. The euro part was a power move of France against a reunited Germany which back story origins in the early 80s. Obviously backfired.
Random observation: I remember seeing the second round of euro bills and momentarily thinking, "EBPO? cool, but why did they add Cyrillic to the design?"
It was specifically for Bulgaria, the only EU country to use the Cyrillic alphabet. Eurozone membership was a distant thought at that point, but they knew they'd be in eventually. Now's the time!
Bulgaria economy and the average citizen quality of life are not that correlated. You can have one improving while the other is deteriorating. We saw what happened in the US when such a gap became wide enough.
Life expectancy in US is 78 compared to 82 in Europe.
Child mortality is closer to Africa than Europe.
Again, about children, US has the second poorest children among the 35 most developed countries in the world.
More than half Americans have their literacy prophiciency below elementary level.
There's almost a million homeless people in US, that's more than in several rich countries like Japan, Italy, Poland, Germany, etc, combined. Hell I've never seen bidonvilles and tents all around cities in Europe or most of Asia like I've seen in LA or SF.
Inequality in US is at south America level.
US has more incarcerated population than all developed countries combined.
So true. The weirdest part is that so many non-Americans think the same about America whilst simultaneously lining up to legally or illegally immigrate there.
I don't think a "third world country" or "developing country" mean anything any more. Turkey/Istanbul and Congo/Kinshasa are both developing countries/cities. One has issues but functional transportation, water/electricity, acceptable healthcare, etc. and the other is a literal shit-hole. The term was invented very long ago and now is no longer applicable.
Edit: Also third-world country mean something else completely since Turkey is first-world by original definition.
Also, social mobility is preferable to inequality. Inequality is terrible on many levels.
Everyone is poor – low inequality (1)
Everyone is middle class – low inequality (2)
Many poor, few rich – high inequality (3)
Theoretical cases, not observed in the real world:
Few poor, many rich – high inequality (4)
Everyone is rich – low inequality (5)
The metric of "inequality" only scores well with either poverty (1) or average outcomes (2) in the real world. Is that socialism or communism? I forget.
Bulgaria has an internal coherence problem. There are brilliant people but also many who believe bullshit communist fairytales.
1. Many people have unrealistic expectations. In reality, no one is coming to save you, and 99% of the time, you need to save yourself.
2. The Russian propaganda story was taught in schools from 1945 to 1990 and beyond. When I was in elementary school in the 90s, it was still taught by inertia. I would bet it's still taught today, 2025 (!), in some shape or form. Yes, Russian actions in the late 1800s had the side-effect of liberating Bulgaria, but by all historical accounts, that was bound to happen since the Ottoman Empire was falling apart.
The most significant action taken by Russia (the Soviet Union) was the occupation of Bulgaria following World War II. The resulting communist regime initially jailed or killed any person who dared speak against it. This is not commonly taught or talked about in the country, even today.
> The resulting communist regime initially jailed or killed any person who dared speak against it.
That's whole modus operandi of russians entire 20th and 21st century. Really, a cancerous mole that wants to spread at all costs across the face of whole Europe, and the only thing it understands is the rule of stronger dog fucking the rest without a care.
I've grown up in communism too albeit a bit more north, a whole nation enslaved for more than 4 decades by russians. The scars this oppression had left on the soul of my nation are still very visible these days and not going away anytime soon. That depraved nation never even acknowledges atrocities it was doing and still keeps doing on a daily basis.
The saddest part they were very actively shooting/electrocuting people that were just trying to escape to the west, just to show to the rest of population its not worth dreaming of freedom in any way. A milder North korea. I guess dictator's playbooks are very similar everywhere.
It’s also more of a generation thing though. The older people are nostalgic about the past and their youth and for a country that experienced 2 decades of very low birth rates that’s the 70s and 80s and those years are under the communist rule and very good years for Bulgaria as the country was experiencing economic boom from computers and electronics manufacturing.
Also, under under the Communist rule supported by USSR, they indoctrinated people into a version of history that Turks are the absolute evil, and Russians are the absolute angels saving them from the ottomans.
I.e. in pre-EU era it was called Ottoman slavery, later they start calling it Ottoman era as it was more accurate as Ottoman’s system was based on collecting taxes and resources from the conquered places when giving them plenty of autonomy. Obviously not ideal but far from slavery.
Devshirme, Janissary corps, Batak massacre? There is huge blood debt that is owed to the Balkans and Armenia by the Ottoman Empire and their successor states.
Tell me about an empire who conquered and held conquered land through asking politely. If you are able to come up with any, Ottomans certainly were not among those sure. That's why people don't like being invaded by empires. What do you think the first and the second Bulgarian Empires did exactly?
BTW Just like the way Bulgarians may not recognize that the Bulgarian Empire had a military and killed people in order to take others stuff and force them into things they wouldn't do unless defeated through slathering each other, Turks also tend not to understand that institutions like Devshirme or Janissary weren't liked by the people subjected to those.
For example In their mind Devshirme was an education program that gave the opportunity to minority children to have great careers and indeed that was the result(they don't think about how those kids were taken into the program).
Similarly Janissary were elite units with lots of sway in the administration, in their minds Janissaries were spoiled soldiers that are hard to satisfy.
Also, all the wives of the sultans were women from minorities. In the Turkish mind they were lucky women with a lot of influence on the empire. An entire genre of soap operas are made around this and they are very popular in the countries that used to be under the Ottoman rule. Including Bulgaria.
Oh of course. This doesn't invalidates the bad blood. This doesn't mean that I would be sad if Turkey is humiliated and Hagia Sofia becomes once again orthodox church once again. And Istanbul is renamed to Constantinople.
The bad blood doesn't make sense, it was an age of the Empires and it was all business and Ottomans didn't do anything particularly different than everyone else did so I don't think that it is fair to say that Ottomans were evil. If anything, under Ottoman rule despite the atrocities minorities kept their language and culture unlike the people subjected to Western imperialism in Africa or Americas. One can even argue that Ottomans were relatively gentle.
Let's hope that we never go back to these days. Imperialism is evil and I'm sorry that Erdogan and other autocrats are trying to revive those days. I also agree that it was very offensive for the christians to turn Hagia Sofia into a mosque again(was a museum till recently) and I would love to see it becoming a church again.
Also, let's stop renaming stuff. If you like Istanbul you can move to Istanbul, if you want to own istanbul you can purchase a property in Istanbul.
> Tell me about an empire who conquered and held conquered land through asking politely. If you are able to come up with any
This is not what it's about. It's not about the Turks being evil and Bulgarians et al being angels. It's about the fact that Turks refuse to accept responsibility.
Let me give you an example. I'm Romanian. There are many uneducated folks you'll meet in Romania who deny we killed hundreds of thousands of Jews in WW2. But no serious politician, historian, public figure, or educated person denies that.
The same is not true in Turkey. Pretty much everyone denies the Armenian Genocide.
All of us have shameful periods in our history, but some of us at least have the decency to not deny it.
But, of course, how could you see the genocide as evil when you can't even come to grips with the older Devshirme, a practice where boys were abducted, mutilated (circumcision), forced converted to Islam, executed if they were found praying to Jesus, and trained to fight and kill their own countrymen.
Yep, and if Ottoman empire did evil things, Russian empire wasn't historically any better. At least Turks mostly stay inside their own borders these days, while Russians haven't changed one bit.
Not at all, Armenians were also an integral part of the Ottoman society and that’s how you still have plenty of Armenian cultural heritage dating back to Ottoman times in modern Turkey. You must be referring to the events around WW1 that led the loss of huge numbers of the Armenians through atrocities committed by the Ottomans which some say that it was a genocide, others say it was poorly managed suppression of a rebellion in a dying empire. Still unresolved issue unfortunately.
On the other hand Bulgarians and Turks teamed in wars after the forming of the new Bulgarian state.
True, I'm also inclined to believe that it started as a suppression attempt that ended up being a genocide as "an easy solution" to make a problem go away as the dying empire wasn't able to contain it.
I recall reading the communications of some Ottoman officials trying to cash out the life insurance policies of the Armenians. Pure evil, honestly.
In that sense the Holocaust was also the "easy solution" to "make the problem go away" when deporting Jews (and other minorities) became too much of a hassle for the Nazis.
They didn't start with the idea of "let's kill everyone", it built up from the 1930s process to deport "undesirables", when it became too much work they decided to kill everyone instead.
Genocide is genocide, doesn't matter the seed that started it.
The difference is that the the ottomans didn’t have an anti-armenian culture going on and the Ottoman rule wasn’t being legitimized over stuff like “fighting a war against sleazy Armenians who infiltrated us”. It was quite the opposite, with rise of the nationalism in Europe minorities in the empire were the “anti”.
Ottomans didn’t do that because they believed in the inherent evil of the Armenians but because they were responding to those nationalistic movements. The distrust towards Armenians developed with the rebellions that were supported by Russia etc. Armenians weren’t targeted for their Armenianness. In other words none of this would have happened if there were no rebellions. It was done to address a specific problem, can you say the same for the holocaust? Was Hitler trying to address actual troubles that the Jewish minority caused?
Do you know who were/are targeted? The Alawites, it about the people would say things similar things like an anti-semite would say for the Jews. It’s also how you get instantly cancelled in Turkey.
“ We have been blamed for not making a distinction between guilty and innocent Armenians. [To do so] was impossible. Because of the nature of things, one who was still innocent today could be guilty tomorrow. The concern for the safety of Turkey simply had to silence all other concerns.”
Could be, I agree. I'm inclined to believe that it become a genocide once the incompetent administrators failed to address the core reasons and thought that it would be easier to make these troubles go away by killing everybody.
Also the experience of Greece not too far back and the austerity imposed by Germany is not quite forgotten. Varoufakis[1] can attest to its severity. The Greeks voted against it but Germany imposed its will.
This is a very distant view for the reasons behind the crisis in Greece and for sure the government of 2015 was not a victim.
In the context of this thread, Bulgarians as Greeks before them, enjoy the money from the EU but don’t like the responsibility that comes from it, to reform, to also contribute and that you lose the own currency perks while you gain on other fronts.
Of course there is a lot more here to discuss but this is my experience being a Greek in Greece.
The government was not the victim in deed. But up until today you can see the results amongst the population. You can Prune for growt or you can just cut the plant to the ground hoping it will survive.
Greece was sacrificed so eurozone (especialy Germany) could hide recession by bailing out banks (through bailing out Hreece). Greeks know and believe this. That makes their relationship with EU quite complicated.
You know, there's Greece and Portugal. Mentioning these two as they got Troika following them.
Portugal managed to get out of the storm, and debt is now below GDP.
Greece took many bad steps trying to recover. And its debt shows that. Their governments have had a big part of the blame. Hell, at one point they didnt have enough money for citizens to withdraw from banks.
> And its debt shows that. Their governments have had a big part of the blame. Hell, at one point they didnt have enough money for citizens to withdraw from banks.
Sure but so do the creditors. If you keep giving mortgages to anyone with a drivers license that's on you buddy.
At almost no point is there enough money for citizens to withdraw their money. Modern banks don't keep their assets as cash.
Not just the USA system. EU and especially German banks gave plenty of credits to Greek banks, knowing that they will probably spend it on German products, even if they have not much means to repay them. Plus, the EU knows full well that if Greeks overspend they can easily be pressured into austerity.
This went swimmingly for everyone involved, with Greece now in more debt than ever (debt went from 145.45% of GDP to 209.40% of GDP). And fascist parties going from virtually non-existent to mainstays.
Adding low-efficiency countries like those in southeastern Europe is great for the EU's major exporter - Germany, because it adds more customers who have Euros, and because it devalues the Euro, which means more exports. Better yet, because of Euro the new joiners can't devalue their currency and get their exports high enough to restart the economy, with only viable option being more in debt and/or leaving for Germany, while obliterating the local industries. Win-win-win. For the EU exporters.
So, yes, let's celebrate Bulgaria joining Hotel EU, where food is great, your bill grows exponentially, but you can't ever leave. By the end you'll just end up as a pool boy.
This is nonsense. Not mentioned is that Greece has borrowed excessively and had defaulted on its loans. A bailout was organized by the EU and IMF with terms that Greece had every opportunity to reject. No one forced anything on Greece. The referendum was not binding and political theater for the government of the time.
That Greece accepted the terms reflected the reality that the alternative was much worse and would have caused great suffering for Greeks.
What choice did Greece have? Germany was not extending favorable terms, they were punitive, so what choice did they have but take the least awful choice? Syriza tried but Germany had the upper hand and of course didn't give an inch --though Syriza tried very hard.
Varoufakis would argue the severe terms imposed by the creditors/negotiators exacerbated the fiscal issue. Yes Greece had issues but the creditors's terms exacerbated the problem, made things worse.
It's kind of like borrowing from a loan shark to pay off debts --on average, you're better off not. But hey, once you take it, you either pay up, or you lose something dear to you.
Greece underreported its debt until 2009: i.e. it borrowed too much while lying about how much it's already borrowed. That's the main difference between Greece on the one hand and Italy, Portugal on the other, in my eyes. Italy and Portugal too suffered a public debt crises, but they weren't so blatant about it. I sympathize with the common Greek man, and I wish their crises had been managed with more success, but I also don't feel especially interested in bankrolling Greek policies that led to this crises.
I dunno. Pretty sure creditors aren't innocent little old ladies. They're financial killers and knew the situation but also knew they had Germany and the Troika behind them to save them if things went south (as they did). It was win-win for them. The economy miraculously grows: win! the economy sours: win!
Sovereign debtors also knew that them being part of the Eurozone gave them better borrowing rates because creditors perceived Eurozone as low risk. Both the creditors and the debtors believed that they won't chaotically default because of the Eurozone, because that would endanger the Eurozone. If that were all, the creditor and the debtor would be equally at fault. But, when you add the underreporting by the debtor, that's different. Now, I don't see how you can make a case for equal responsibility, and the creditor being more at fault doesn't make any sense to me.
And yet, Greece recovered to become a leading economy in the region. The propaganda is strong on the airwaves these days, just like in the US, one shouldn’t react to “facts” taken out of context.
It seems (from here), support for Russia is somehow magically going down as Russia’s economy is having trouble paying for its “support” abroad.
> And yet, Greece recovered to become a leading economy in the region
I don't think that's true ... growth is good, but that's because there's a lot of catching up to do. If I remember correctly (and maybe I don't) then real GDP is still like -20% vs 2007, debt is EU-leading at like 150% of GDP, unemployment remains high, and wages remain low.
What everyone is missing: the biggest advantage of the Euro is debt. Once you can take loans out in Euro, investors can give you lower rates since they’re not worried about a national bank going haywire and debasing the local currency. Also no potentially illiquid currency markets that need to be cleared going in and out of the currency.
Ask a homeowner the difference between a 2% loan (euro price) and 5% (local currency) and you’ll understand why so many countries have opted for the Euro.
One of the biggest effects of this will probably be increased Western tourism to the resort cities on the Black Sea coast. Which is good, I guess, for the local economy - but I did really enjoy how Burgas felt different from the typical Western coastal resort city when I visited. I hope it doesn’t lose that uniqueness as it integrates into the wider EU economy.
I haven't been to Burgas but Montenegro still feels rather different IMO. Probably it has to do more with local culture and with GDP per capita rather than the currency itself (even though you're right that the latter may slowly evolve thanks to easier inflow of money).
Depends on where you’re at in Montenegro. Parts of it are definitely still different (the capital, Ulcinj and the south, rural areas) but some of the coastal cities are becoming very generic global luxury stores and mass tourism.
At least - that was my experience spending a couple months there 2-3 years ago.
The US has a much more integrated economy - businesses operate nationwide, employees routinely move across the country, and most economic policy is set centrally. And even then there are still downsides where e.g. interest rates set to suit the national economy exacerbate the problems of the rust belt.
> businesses operate nationwide, employees routinely move across the country
Could you elaborate on what you mean? I've not run a business, but from the people I know who do complain similarly about cross-EU and cross-US-state business.
Like the company based in Texas who got their first employee in New York. Suddenly they needed some sort of presence in New York State, get a separate insurance, and accountants for New York State. (federal, state, and city income tax). They have to really want that employee.
From what I've heard, selling across state lines is fine in either case. Getting employees / expanding into new state is in both cases a big deal. Withdrawing (presence, not sales) from a US state is spoken about similarly to if it's a new country.
Opening an office in a new state may be just as difficult as opening an office in a new country, but my sense is that both a) selling to the entire US and b) hiring employees from the entire US (with the requirement to relocate to the state where you operate) are substantially easier than doing the same things across the entire EU.
To be clear, I don't just mean opening a physical office. I also mean the cost of having your first remote worker who lives and works from another state.
For employee relocation, that's definitely true. Even moving from Hawaii to Alaska is less of a life change than Spain to Poland. Or hell, probably even Spain to Portugal.
I'm surprised to hear you say selling would be that hard, though. It'd be interesting to see a comparison. And there's also both B2C and B2B.
> I'm surprised to hear you say selling would be that hard, though. It'd be interesting to see a comparison. And there's also both B2C and B2B.
I'm getting out of my depth, so this is more vibes than concrete knowledge, but: Selling goods isn't that hard in the EU, but you do have to be set up to collect VAT at a different rate depending on where the customer is from, which is a barrier, whereas I think in the US you can just tell the customer that they've got an obligation to pay sales tax in their state? (I remember Amazon battling about this at one point, but I think the states backed down). Selling services cross-border is a nightmare, there's still not really any standardisation of what licenses etc. you need.
Plus of course even if there were no legal issues there's often a language barrier.
I hope Bulgaria and the EU have learned from past mistakes (I don't think they have).
While EU and the Euro had good intentions and prospect, it turned out to be a disaster for some of us.
Greece is in a recession for more than 16 years now, with no visible exit,
because (one of many reasons of course) it couldn't devalue its currency back in 2009.
Now we might speculate that Greece couldn't have avoided this, even if it weren't for the Euro,
but having lived this from the inside, I think that it wouldn't be that painful.
Countries like Japan, Italy and even USA nowdays, have comparable debt to GDP indexes,
but none of them (as far as I undestand) have had this kind of dorp in living standards,
price inflation or increase in poverty rates since 2008.
Best of luck to our Bulgarian neighbours. They are going to need it!
Maybe the word recession was not accurate. Also Germany is a highly developed country, so it's expected to have minimal growth.
Greece should be compared to other developing economies in Europe (mostly pre-communist states), and that comparison is eye-popping...
The real economy, the one that affects people's lives, is still something like 25% below what was pre-2009.
In essence people are still 25% poorer than they were before 2009.
That's the worst recession EVER recorded in recent history. Worse than the 1930s.
That's why Greece is only slightly above Bulgaria (yet) in real purchasing power compared to other EU countries.
Don't get me wrong. There were a lot of benefits for most of the EU countries,
but the lack of common economic strategy, and regulation prooved catastrophic for some.
> Greece is in a recession for more than 16 years now, with no visible exit, because (one of many reasons of course) it couldn't devalue its currency back in 2009.
Greece is not in a recession, it hasn't been in one for a while. It's in austerity mode which I do agree it's a too blunt of a tool to use for recovery but alas those were the terms for Greece to get a bailout after its debt mismanagement (including lying in their official government reports for many years).
> Now we might speculate that Greece couldn't have avoided this, even if it weren't for the Euro, but having lived this from the inside, I think that it wouldn't be that painful.
And why do you think that? It's a small country, with a small economy, accruing so much debt that wasn't used for development which in turn didn't generate taxes in return. Notwithstanding the cultural practice of tax evasion, it was going to implode either way.
It would be probably as painful, or more painful, to be shackled to the IMF's terms (which always have included austerity) while holding your own currency which would be quasi-worthless because no one wants to buy your bonds unless you paid massive interests. Debt repayment premiums would be a massive headache either way in the Greek budget (with or without the euro), devaluing your own currency would create a lot of pain for the people since Greece imports a lot of more advanced stuff from other EU members, and also would erode all savings from a relatively old population.
I don't agree with the austerity bullshit, just to be clear, but I don't think there was any solution that wouldn't be painful, maybe different pains but it was never going to be much better.
I say that as someone who lived through multiple Brazilian crisis, including four currency changes to tackle hyperinflation, lived under IMF-imposed terms.
I understand the pain but in both cases (Brazil, and Greece) the absolute mismanagement of the state's finances for decades required bowing down to the powers that be (IMF, ECB, etc.) to save the country from bankruptcy.
Maybe so, but we are both speculating on this.
However the truth of what happened with the Euro is devastating.
Also the IMF was also part of the Greek debt restructuring deal, so it wasn't that different from what Brazil or other countries have experienced.
I am not against the Euro, far from it. But the EU could have handled this crisis much better for the benefit of both Greece and itself.
The Greek economy wouldn't have collapsed, and the anti-Euro sentiment which led to the rise of ultra-right-wing parties in EU wouldn't grow that much.
I mean, I feel I have to point out that Eurosceptics have now been predicting the imminent death of the EU and its predecessors for over half a century at this stage. "It's doomed" is not the most compelling argument.
Croatia hasn't really adjusted. Well, maybe it could be said that everybody adjusted one social class downwards. So people who were previously "upper middle class" are now solidly "middle class," people who were "middle class" are now "lower class," etc. The purchasing power of the populace has declined and not yet recovered.
So, after introducing the euro, and everything overnight becomes ~2x more expensive, salaries will match that trajectory and eventually also become ~2x larger, almost universally no matter the job type? Did I get your argument right? I ask because I don't think this actually has been the case with pretty much any EU country.
From what I have seen, salaries will certainly adjust themselves, and they will grow, but the resulting purchasing power is going to remain lower than it has been prior to introducing the euro.
I haven't looked into each EU country but it's difficult to imagine that a salary of X * K EUR gross will become 2X * K EUR gross just because the country has switched to EUR. It's delusional at best.
This will likely come with a one-time significant increase in inflation, at least based on other European countries.
When Germany converted to the Euro, the conversion rate was (IIRC) about ~2 DM to the Euro but from what I recall, a lot of everyday things went from costing 7 DM to 7 euro, effectively doubling in price. IIRC France was similar (ie ~6.5 francs to the Euro but 10 Francs went to 3 euro, etc).
I've tried searching for any studies on this to see if the effect was measured and, if so, whether it held with later countries joining the euro.
I'm a little surprised that the euro has been this stable for this long (going on 30 years). Finland debated leaving. IT's debated if there's even a legal mechanism to leave. We still have the problem that the ECB sets eurozone monetary policy with Germany and Greece being vastly different economies.
I was in Belgium the week the Belgian franc converted to Euros. I saw no price changes other than rounding up or down to the nearest Euro equivalent price. If memory serves some stores showed prices in both denominations for a while which would not have allowed for stealth inflation to happen.
The currencies were pegged for a period before then so other than niche cases there really weren’t opportunities for massive price increases.
Did not happen in Germany either. Inflation and price hikes came but later. And had nothing to do with currency system but were overdue price adjustments or greed of companies.
Belgium had double denominations for about two years. My mother owned a business at that time and she used the occasion to correct the prices a bit bit that was only because she lagged a bit on inflation.
I did that a while ago and stopped immediately because it's scary and irrelevant.
My parents house was wrote expensive at the rule they bought it at 600.000 Bfr. Now it's being valued at 600.000 euros. That's a factor 40 over about 30 years.
When euro landed a beer cost about 45 Bfr, a bit over a euro. Now I pay €2,5. It's hard to compare prices over that period of time.
Missing piece of info: the official conversion rate is 1.95583 per euro. It will be extremely tempting for merchants to use 2:1 instead.
The situation was literally identical in Germany, where the official rate was also precisely 1.95583 to the euro (because the lev used to be tied to the DM at 1:1), but not so in most other European countries.
Covid sort of showed everyone how hard it is to survive as a small economy in the modern highly interdependent world.
One small disruptor to a core component of a small economy and they are standing outside the IMF to survive.
There are currently 50-60 small countries that depend on borrowing from the IMF (that too in dollars paying interest in dollars - given competition levels guess what dollar generating capacities small economies have? They end up economic vassals of larger systems or selling off national assets or being used in geopolitical games).
On the other hand look at China and India. They have more provinces/states than the EU and larger populations. Vastly differently economies spanning all those subunits. Yet you wont find any of those subunits complaining about their central bank setting monetary policy.
Why? Cuz look at the surroundings - Sri Lanka/Pakistan/Myanmar/Bangladesh/Thailand/Indonesia/even South Korea all at one point or another requiring the IMF to step in and bail them out when they ran into trouble.
The world is too complex and fast/ever changing and small economies are increasingly dependent on larger economies to manage the unknowns and unpredictability that lie ahead. Its almost become impossible to survive by themselves. Sort of like running a book store in the era of Amazon.
> Yet you wont find any of those subunits complaining about their central bank setting monetary policy.
This is ludicrously wrong of India, and I understand enough of human nature and economics that I’d be surprised if it were true of China, though it may be more suppressed.
Monetary policy is government policy. The ruling party is seldom uniformly popular across their entire domain. Perhaps you’re more familiar with US politics: broadly, rural is Republican, urban is Democrat. In India, the ruling party BJP has a lot of the north, but not so much of the south or east. Accordingly, you should expect dissent from regions with a different state government. And as for socioeconomic disparity between states, rich may complain if they seem to be subsidising poor, poor may complain if they don’t seem to be getting enough attention.
In some places I gather that pretty much happened during https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis.... (I happened to be in India at the time, but where I was it was more just extreme discontent with resignation, rather than threatening fracture.)
The discontentment arose because it was extremely poorly planned, and failed to address the very problems it was 'trying' to solve. It is very unlikely for a state government to implement a local currency and introduce more friction to an already painfully bureaucratic system; it is a politically disastrous move.
> Monetary policy is government policy. The ruling party is seldom uniformly popular across their entire domain.
If by monetary policy you are referring to fiscal policy, you're pretty much spot on. There's always in-fighting between states and lots of complaining about the central/federal government favoring certain states over others.
In many places people wouldn't ask because it's completely unrealistic to get it.
Regions struggle to get a bit more independence from the central government. An own currency is completely unrealistic. Your argument doesn't work.
> Yet you wont find any of those subunits complaining about their central bank setting monetary policy
I mean and also the US, but the key difference here is that those are also cohesive countries where wealth transfers between different areas is the norm. Much less problematic if a policy is better for New York than Alabama if you know for sure that the federal government is going to make sure Alabama doesn't get screwed.
In the EU you have the opposite problem: policies that benefit rich countries will result in the rich countries complaining about how they support the other economies and moralizing.
Ofcourse they will complain but they also learn to stay rich and be a large power you have to pay attention to the needs of others. If you don't, others will step into that space and the less others depend on you, the less relevant you become. Its like a learning process that takes its own sweet time.
It's pinned at 1.95583 to the euro, not 2. If a merchant has a product that sells for 2 lev today, and they sell it for 1 euro tomorrow, they just increased the price by a bit over 2%.
Soon all the prices will be listed in both of the currencies and they will be kept as that for another six months after the adoption.
The country already experienced quite a bit of inflation last years, regardless of not being in the euro. I don’t see why the change of the currency that is already pegged to euro since the creation of Euro will cause any inflation beyond the rounding and the rounding is for 1:1.95583 and that often provides rounding sown incentive as 4.99 becoming 2.04 and 4.49 becoming 2.2957
A more realistic concern can be that Bulgaria might start borrowing irresponsibly. Currently Bulgaria's debt to GDP is just around %22, which is very low.
In the Netherlands there was a brief spike of inflation, but that was due to rounding up, definitely not converting 1 NLG to 1 EUR.
The inflation did correct itself the years after (aka lower than usual). The perception with many people still is that the euro made everything more expensive, but that's only based on feelings. The inflation numbers tell a different story.
Thinking about it, the comparison really isn't that bad. West Germany had just reunited with the East, and France was definitely on a similar upward trajectory as Bulgaria is today.
It's something that is pretty much taken as gospel in many countries that that happened
I've only checked the data for Italy but real inflation stayed pretty much constant while perceived inflation absolutely blew out of proportion.
So essentially people noticed some minority of shops raising their prices talking advantage of the little confusion around the exchange rate and never shut up about it since
Same in Germany. I remember the times, was a poor student. Restaurants took the opportunity to change prices, which everyone felt but did not influence the inflation. And that price hikes was overdue (at least that was the statements back then ... Which I found rationale)
exactly, Bulgarian here, born in Germany in 1988, so I lived with the DM and then experienced the Euro throughout my entire life, until 2023 when I decided to go back to BG. The Euro will make BG a debt slave on Germanys and France terms. Watch critical infrastructure being sold to China or who knows, just like Greece had to do it.
The Euro expansion is the mechanism the EU has to export inflation to other countries, similar to the way the US exports inflation with dollar trading across the world. When the easy expansion stops, this is when the debasement will start to occur. The US is already at this point, very soon the dollar will be less valuable as less trading is happening in USD.
I think there are other motives otherwise Bulgaria would say, no thank you. IMHO, the primary motivation is to establish/strengthen the single market and the economic cohesion of the EU. That inflation is a side effect of this (and part of the stabilization) might be the case.
the Euro has lost almost half of its purchasing power since its creation. bulgarians want the Euro so much, that they have to run tv ads, "we will become more wealthy by introducing the Euro", what? how will that happen, if you need more money to buy same or less products/services? lmao
Same for USD and other major currencies, as most countries have inflation around 2%. Only currency that has done significantly better is the swiss frank.
Through some technicality maybe it’s that, but food prices have increased by a large double-digit percentage.
Construction materials (and laborers) are stupidly expensive.
On average over the last 25 years according to perplexity. (for example, found an old message about price of bread in 2000: 1.99 dutch guilders. You can now get a bread for 2 euros. That translates to 3.21%) I think a lot of people are overestimating inflation percentages over longer periods of time.
> Bulgaria pegging to the DM in 1997 meant anchoring to a much harder currency than what the euro has become.
Look, it seems you have beef with Bulgaria adopting the euro based on your other comments, but matter of fact is that many people remember the hyperinflation and the Videnov winter — especially older people that were queuing for bread with all of their lifetime savings disappearing overnight. Hence, the board staying almost 30 years. What’s scary for many is that the board in its current form is just a law that can be removed with simple majority, e.g. the current stable state could be made obsolete in a matter of a weekend — with devastating consequences for the economy. Adopting the euro means tighter integration with EU only and it’s mostly irrevocable … sadly for Russia and its proxies over here.
Bulgarians are using the DM since 1997 and the Euro since 1999, they just call it Lev. We have a currency board that requires every single Lev be covered by foreign reserves which as of current consist of 90% EUR and 10% USD, JPY, GBP and others. We cannot print money to control interest rates, worse we have no say in ECB policies at the moment.
For the Lev to be independent we have to exit the currency board but this is madness, since our exports are already adjusted to EU countries where the currency is EUR anyway.
Get ready for prices to increase significantly (but not necessarily orthogonally to income) just like they have in every other place that switched to the Euro
Probably a bad idea. The big economies of the eurozone have been in constant stagnation for the last 15 years. To me it seems that Bulgaria has jumped on Titanic on Qweenstown. I do hope that I am wrong, but those are the same people that made the plastic caps permanently attached to the bottles.
Have you even been in the parks and forests before, haha? :-D At least in Lithuania there were lots of caps lost - half of cleaning up the parks time was bending to pick out caps out of the dirt. Not anymore.
It's similar to free plastic bags or deposit system for bottles. Inconvenience is so tiny that no person genuinely complain about that (not for social karma/attention), but economically when there were millions of bags and half a million bottles sold every day...
To put it into HN-themed metaphor, reducing error log verbosity matters too, when you have millions of lines.
It is inconvenience for all, with at best minimal benefits, but it makes couple of bureaucrats and greens feel good about themselves. People are upset because it shows Brussels disfunction in a nutshell.
But it really isn't that inconvenient at all, and some of the caps are outright better now than the crap that preceded them. Bit like how the toilet water use regulations turned out.
I even find myself vaguely annoyed now whenever I drink from glass bottles, that those caps are loose.
> People are upset because it shows Brussels disfunction
Reminds me to that meme where the debated point is what OS is better, and the conclusion is that normal people don't talk about operating systems. The only people I ever hear mention Brussels unprompted are rightwing grifters.
> bother you when drinking, get in the way when pouring
How? Just rotate it by 90 degrees. It's really not that hard, and in return you will never lose a cap again and we reduce litter by quite a bit. It's a pretty good trade-off imo.
I never lost a cap in my life, people don’t “lose” them, they throw them away.
It bothers because it pulls back towards the bottle and presses on your mouth. Or if you use force to open it at 180, then it doesn’t screw back on properly because the plastic is bent and holds it in a wrong position. So again force is needed for something which used to be ridiculously easy.
As I said, kids don’t manage that well. For adults, it’s one more little irritant.
It's a taxpayer's money so why wouldn't the taxpayers have a point if they think that their money is not spent best and, in the context of the global situation, not really efficient at all in making the quality of life of EU citizens any better?
To paraphrase this differently: if I as an investor gave you 100M EUR and 24 months, would you be happy to spend it for changing a frigging cap on the bottle or would you rather invest that money and time+people resources on something else?
> It's a taxpayer's money so why wouldn't the taxpayers have a point if they think that their money is not spent best
Not what I said.
> in the context of the global situation, not really efficient at all in making the quality of life of EU citizens any better?
Why would all decisions have to be this massively efficient slamdunk of an idea? Things can even be downright specifically bad yet still be generally useful in the grand scheme of things. Things can also be just kind of a stinker sometimes. You don't normally skewer something large over a minor issue. Critique is fine, but then "I don't like it" doesn't hold much weight, certainly not more than "well I do".
> would you rather invest that money and time+people resources on something else?
Are the levers I can and am expected to pull on the same as the EU? I don't think so.
My remark about most people who bring up Brussels unprompted being rightwing grifters really was just that, and nothing else.
It is not lost on me that like anything, they can and should be critiqued as well.
It's just not really being done, and when it is done, it's usually coming from a place of ulterior motives and ill faith (for now), and so is fairly uncommon. So it's a strange thing to claim that that's what "people think of". No it isn't, not unless you're in the aforementioned circles, which is not the general populace at all.
Ok, I wasn't making a comment about "rightwing grifters" although this is also certainly amenable to discussion but I was rather making a comment on why would some people find it contrary to what you said in your first comment - "It's still hilarious to me how upset people are at this (or at least pretend to be)."
> To paraphrase this differently: if I as an investor gave you 100M EUR and 24 months, would you be happy to spend it for changing a frigging cap on the bottle or would you rather invest that money and time+people resources on something else?
Grifter 101 – “think about what we’d be able to achieve if you did X instead of Y, comrade!”.
It's fine with me if you think that the bottle caps were a worthy move, ok? We are different in the fact that I prefer to discuss objectively with arguments and not using the collective bias as you seem to impose on me without actually knowing anything about me. My mind is open for discussion but probably not suitable for the likes who cannot think out of the box. As for the grifter, I don't think you really understand the meaning of that word.
Let me clarify here, cause the editing window for my comment upstream from this has already passed:
> People are upset because it shows Brussels disfunction in a nutshell.
This is what I was reacting to when I said that in my experience people who bring up Brussels like this "are rightwing grifters".
It wasn't in the sense that I was pointing at the person above or anyone else in particular here with this label, but rather, that I was taking an issue with the claim that this kind of thinking (Brussels this, Brussels that) is a people at large thing ("people are upset because"), rather than just something prevalent in those aforementioned circles.
This does sort of imply that I think the person above my comments belongs to those circles, but that really doesn't need to be true, nor was that really my intention to suggest necessarily. I guess this is as good of a lesson for me as any why engaging in labeling (particularly negative one) can be detrimental to discourse, regardless of context. Apologies.
>The big economies of the eurozone have been in constant stagnation for the last 15 years.
Eurozone doesn't know how to manage the economy successfully. The euro has been a failure. We went from somewhat parity with the US in 2006 to lagging quite behind them 20 years later.
If abandoning your own currency and adopting Euros was such a big deal, the UK would have done it decades ago (while it was still a part of the EU).
This benefits the bigger economies, at the expense of the smaller economies. Any fiscal policy is dictated by the bigger countries, and with identical currencies, the only policy left for Bulgarians is to cut wages in public sector. This will impact local economy, and ripple through their society becoming poorer. And the bigger foreign corporations can ransack the place. Brilliant.
I wonder why this comment is at the top of the HN post.
Over the years I've seen a lot of missinformation on this topic that follows pretty much this exact train of thought. Why would countries join the EU and the Euro if it didn't benefit them?
The baltics have all grown massively since the 90s when they became independent, and even though they all were on nice trajectories they still all decided to join the EU and the Euro.
Bringing up the UK as some model for all other "small" european countrie sounds odd. The UK joined the EEC specifically because it had slower economic growth than the other large EU countries.
The UK, and specifically the city of london, with its huge international financial pull has a very different place in the global economy than Bulgaria...
> Why would countries join the EU and the Euro if it didn't benefit them?
Joining benefits the country's elites, rather than its general populace -- and it's these elites who decide whether to join.
Bulgaria joining will weaken the Euro, which benefits big, export-oriented economies such as Germany and France. This is how the Euro has always worked: the big economies dilute their trade surpluses at the cost of smaller European countries.
no proofs, just rephrasing what anti-eu propaganda says. also it is nice how people think they are able to dismiss a policy like the euro in 2 sentences thinking they understand it. probably without a phd in economics either.
The UK's nearest neighbour Ireland did. Looking between Britain and Ireland now vs then, you'd definitely want Ireland's rate of growth (ignore GDP, which is massively distorted in Ireland, but look at wage growth) and not the UK's (though realistically the Euro was not a _huge_ factor there either way).
In fact, without the Euro/EMU, Ireland's currency would likely still be tied to Sterling, as it was until 1980. This would be, ah, _not great_, especially at the moment. Clearly, at least in this case, the euro benefited a small country (in particular Ireland was spared the various fiscal shocks that the UK suffered as a result of Brexit and Truss).
Britain is a country with a massive special snowflake syndrome, and wanted opt outs of pretty much everything in the EU (and eventually quit the union itself). Just next door, Ireland adopted the Euro and is doing well.
Credit where credit is due: the EU gets a lot of flack for being bureaucratic, hidebound, sclerotic, whatever, but the single currency has been a success and it's still expanding, 26 years after its creation.
Also, the addition of Bulgaria means it's almost possible to travel from Spain to Greece entirely through the Eurozone, with only a thin sliver of Serbia or Macedonia in the way. (Assuming we include Montenegro and Kosovo in the Eurozone: technically they aren't, but for all practical purposes they are.)
It'll also be interesting to see who's next. Czechia is not far off but doesn't seem to be in a hurry, while Romania wants in but still seems to be a ways off. Poland and Hungary will stay outside unless there are major political changes.
Polish here, very much against adopting the euro until our standard of living and growth rate matches Germany (no at least not for next 10 years). Why? Because the disadvantages far out weight the benefits for developing countries. The biggest issue is giving up one of the biggest instrument of control over the economy to a supra-national non-democratic organisation. Surely the monetary policy will follow what is best for the biggest economies (or at best the average) while local policy is way better tweaked towards local needs. The best example of this is money supply. The money supply ideally should match the economy growth rate +X so there is tiny inflation (and definitely no deflation). This growth rate is very different in "old EU" and "new EU" countries. So what happens? In time things get more expensive much faster in countries that grow faster while incomes stay the same. This is a huge negative and this is on top of price increases happening on "day 1" due to rounding up during conversion.
Historically the biggest benefit that was sold as something to outweigh this was a claim that "inflation will be low" and big inflation spikes are impossible. This came about from the short sighted view that all inflation stems from printing money and by giving up our control over it to somebody else we somehow "protect ourselves". This was proven wrong during covid when inflation was vastly different in let's say Latvia and Germany despite sharing a currency.
So what is the bottom line? Is euro all bad? No, it is very useful so we have a common currency in the euro zone that is not controlled from across the ocean. This is a huge benefit, but the same benefit is achieved by having it be a second currency like it is now in Poland rather than the only currency. (you can pay in euros in almost everywhere if you prefer as well as get it from cash machines etc)
Being able to buy groceries with euros is not a strong, or even related, argument to the point you're making. Even ignoring the real economic cost of having two currencies, there is no serious economist that would argue Poland joining the EUR zone is negative for Poland (as opposed to for stronger EU economies). Every single historic metric points in the other direction. Poland's economy is maturing and strengthening and median household income is slowly reaching parity with neighbouring countries so this particular argument may only hold for maybe another decade but until then it's a bit misguided. Also, not for nothing but the Polish economy is mostly doing as well as it does because of the metric ton of EU subsidies injected into it the past decades. Poland is one of the largest net receivers of EU money since 2004 so arguing it or its single currency was somehow a net negative to Poland is, and by extension an odd argument to make for someone benefiting from the above as a Polish citizen.
You have to be careful to make a distinction being in the EU and using the Euro as your currency. You can benefit from the EU common market, with its uniform rules/standards, easy capital flows, subsidies, and industrial policy. All without using the Euro as your currency, and being subject to the monetary policy of the ECB.
Being in the EU without using the Euro has been pretty good for Poland.
> Being in the EU without using the Euro has been pretty good for Poland.
That's an interesting perspective. From what I see in the news, the EU isn't as happy with the outcome.
Probably because the success undermines using the Euro.
Debatable. The original comment was good, because it specifically noted the advantages of using a sovereign currency in certain situations.
Once Poland becomes more prosperous and its growth rate slows, it would make sense for it to move to the euro. It just doesn't now.
https://en.m.wikipedia.org/wiki/List_of_sovereign_states_in_...
They are free to be. When joining the EU, Poland accepted to join the monetary union at some point, but there is no date set, so in theory it can be infinite. And with its current strategy to drastically modernize and increase its military force, there is no doubt it will not met the financial criteria anytime soon so nobody is worried about that.
> Even ignoring the real economic cost of having two currencies, there is no serious economist that would argue Poland joining the EUR zone is negative for Poland (as opposed to for stronger EU economies). Every single historic metric points in the other direction.
The inability to set monetary policy is a strong argument. Just ask Greece (and Spain):
* https://en.wikipedia.org/wiki/Euro_area_crisis
Also, not for nothing but the Polish economy is mostly doing as well as it does because of the metric ton of EU subsidies injected into it the past decades.
That's one part of it. The other part is that the country had just as much human capital and economic potential as Western European states, but was held back artificially by the Partitions, WW2, the Soviet Union, and the lack of Marshall Plan investment that Western Europe received.
Sorry, but the narrative of "Poland is only doing well because the EU is helping" (of which German companies are benefitting from tremendously) is a historically narrow way to analyze the situation.
Well, it's a fact, not a narrative. I think the actual debate is whether or not boosting economies of countries in the EU that for one reason or another were or are behind on the curve is a net win. I think it is. Just as it is perfectly justified for other countries to feel a bit hard done by if that same country after an estimates 280 billion euro injection is still rejecting the shared currency of that body.
The point is that "feeling a bit hard done by" rings a little hollow if the country feeling this way is the reason the recipient country needs investment in the first place. 280 billion euro is still less than a third of the estimated amount of damage from WW2 alone.
https://en.wikipedia.org/wiki/Polish_material_losses_during_...
You can't possibly compare Poland to Bulgaria with 1/8 Poland's GDP and 17% its population. For Bulgaria the Euro is completely fine, as the Lev has been pegged to the Deutche Mark and later the Euro for ages. It's exports are basically raw materials and grain. Most of the other stuff they produce is sold domestically. I think I've only seen Bulgarian sunflower oil, mineral water, ketchup and pasta in stores outside the country. For a state with so feeble exports and a pegged currency it really doesn't matter, only adds up currency conversion fees. They might want to attract more tourism and investments.
I find his view a bit polarized, but can't really see him comparing those countries at all.
But if we talk about Polish-Bulgarian exchanges: Those two countries actually have more or less the same numbers of Euro spent on import and export between each other. Bulgaria doubled export to Poland in just 2 years. Food products are important, but Bulgaria also exports to Poland many metals, mechanical and electrical devices, pharmaceuticals...
The biggest Polish import from Bulgaria in 2023 were almost a billion Euro on guns and ammunition. "Seeds and oily fruits" (whatever is the correct translation) were 20x less than that.
- https://www.gov.pl/web/bulgaria/informator-ekonomiczny4
Bulgaria has a significant services sector. Not only tourism but it is a popular near-shoring destination for many western European countries, especially Germany.
not true, almost the entire domestic production like veggies is exported and turkish, greece, dutch low quality stocks imported.
Yes, but it's still agri products sold for pennies. Compare that to motor vehicles, car parts, furniture and sanitary hardware that Poland exports. Also, I never ate Shopska salad made with Dutch tomatoes in Bulgaria, even in restaurants outside of Sofia. I can tell the difference, they almost always served the good ripe stuff that has taste, not the watery green variety or the huge Greek tomatoes with air gaps inside.
for penni's, because they are dumping the prices by importing crap, so the local producer cant sell his product on the domestic market.
Quite true!
> The biggest issue is giving up one of the biggest instrument of control over the economy to a supra-national non-democratic organisation
This is the point. Germany managed to set up a really independent central bank (which is a non- democratic, bureaucratic, etc… thingy) and inflation was at the target for decades. Italy, France, etc… didn’t, and inflation was 2-3 point above target and above the German levels. So they joined the Euro, which has a governance very similar to the Deutsche Mark.
To this day, inflation in European countries outside the Eurozone is higher.
> Germany managed to set up a really independent central bank (which is a non- democratic, bureaucratic, etc… thingy) and inflation was at the target for decades.
And Germany being overzealous in fiscal and monetary policy has stagnated growth and limited policy options. Look at all the rigmarole that had to be done so that Germany could start considering military spending to deal with the new global situation.
(Heck, if Republicans would actually be interested in fiscal discipline, perhaps they should move to Germany.)
> And Germany being overzealous in fiscal and monetary policy has stagnated growth and limited policy options.
German fiscal discipline is a tool of strategic independence. It started in ‘49 when they knew they would eventually had to reabsorb East Germany. Today it allows them to re-arm without having to ask permission.
Over the past 20 years, Germany grew more than Italy, France and the UK.
Slovak here living in Czechia. Adopting euro would give you a seat at the ECB granting influence over monetary policy in the whole Eurozone. You'd also get cheaper money (think mortgage rates going from ~7% (current rates in Poland) to less than 4% (current rates in Slovakia)). Do you have to exchange money when traveling abroad? Now imagine buying/selling stuff abroad as a company and multiply that by a lot. You get the picture. For countries that deal mostly with Eurozone based countries (which are most countries in Europe) you get massive savings that'll make the country more attractive to outside investors. Any potential price increase would be dwarfed by the rise in wages. All of this happened in Slovakia (and would be great to happen in Czechia if not for previous eurosceptic governments that massaged public opinion heavily). Sadly, the successive corrupt governments of Robert Fico ate many of the benefits to ordinary folks and Russian propaganda machine left some people questioning the value of euro and EU membership. But even 15+ years after adopting € the approval rating in Slovakia is very strong. All of this would be much worse without the euro. Personally, I'm all for everything that gets Europe closer to federalization and strengthens it.
>Slovak here living in Czechia. Adopting euro would give you a seat at the ECB granting influence over monetary policy in the whole Eurozone.
This is my argument exactly. A seat gives a certain small amount if influence, the resulting policy will be an approximation of what is best for everyone. This may be pretty far from what is best for a developing country with fast growth if the majority is well developed countries with low growth.
Imagine you and your neighbour decide to pool your money and invest together. He is 65 years old and has 50k EUR, you are 21 years old and you have 1k. He prefers to put his money in a bank savings acct that will allow him to withdraw anytime (he's retiring soon) and he doesn't want any risk. You on the other hand don't mind risk at all, but you need a high rate of return (stocks would be good for you, maybe of the more "adventurous" kind).
If you pool your money he will have much more to say so you end up maybe with a 6 months term savings deposit to get a little more gain. You're both unhappy because that is not enough profit to you and it still locks up his money preventing him from choosing an early retirement. Compromises sometimes work for both sides, sometimes they don't work for anyone...
>You'd also get cheaper money (think mortgage rates going from ~7% (current rates in Poland) to less than 4% (current rates in Slovakia)).
You can get Euro denominated mortgages in Poland as well. As well as Swiss Frank, Dollar etc. A country does not have to get rid of its currency for people to enjoy lower interest rates in other currencies.
You can make an argument if you earn in PLN and take a mortgage in EUR it exposes you to the currency risk and it does. It is your personal choice. But there are plenty of jobs (usually higher paying) that pay a set amount of EUR or USD and it's often these kinds of people for whom these mortgages make sense.
We even have a long running scandal involving almost a million of people that got Swiss Frank mortgages over a decade ago that had interest rates below 1% and the banks structured these deals in such a way they made a killing on exchange commission. Basically people didn't realise they had to pay in PLN and the mortgage provider would convert to CHF applying their exorbitant conversion rates. There was no way to just pay in CHF. But this story is over a decade old and people have learned the lesson.
The tradeoff between monetary sovereignty and eurozone stability is real, especially for economies still catching up. That said, there's also a risk in staying out too long. You still get a lot of the downsides (imported inflation, capital flow pressures) but none of the influence. It's a weird halfway state...
But you have a much higher growth rate than Germany, why in the world would you like for Poland to match Germany‘s miserable growth rate
Eventually they will catch up to the level of GDP Germany have and then they will start to roughly match their growth rate, over time. It is a lot easier to catch up than to break new ground when it comes to gdp per capita.
I agree, It think Spain adopted the Euro too soon and we'd have weathered the GFC better if we still had control of our monetary policy at the time. And we didn't grow as much as we could have in the preceding boom phase.
It's unlikely you'd have had the same boom without joining the euro.
Another Polish here: truth is, whether we have a single currency or not doesn't matter as much as people think it does. For most people, it's about symbolism, not about practical economic consequences. I guarantee you that average person has no clue what it really means for the economy to adopt euro. BTW the argument "let's wait for our economy to catch up with Germany" is just deceitful because there will always be differences between economies. Imagine arguing that Nebraska shouldn't be using the dollar until its economy catches up with California... which is going to happen "not in my lifetime".
I am strongly pro-euro. Why? Because again, economic consequences are way smaller than most people think, and it's about symbolism. It's about slowly marching towards European Federation instead of NIMBYism that prevents EU from actually living up to its full potential. Imagine a world where the entire European continent is a single political entity - we'd be unquestionable superpower. But no, because "muh independence", and the end result is that we can't do shit on the international stage because we're too busy arguing with each other.
But EU becoming federation has far bigger challenges than Poland not adopting euro.
Adopting euro has political consequences, first and foremost, not "symbolical". It is quite sad that people and leaders in our country mostly conflate politics with symbols and gestures, because that is causing us to be what we are - losers.
> Imagine a world where the entire European continent is a single political entity - we'd be unquestionable superpower
Why would that be a good thing?
That's a bigger philosophical question, but I assume that in the context of this discussion "being a rich and powerful society is good for you" can be taken as an axiom.
> Why would that be a good thing?
Ask Ukraine.
Thank you for your interesting comment.
> In time things get more expensive much faster in countries that grow faster while incomes stay the same. This is a huge negative and this is on top of price increases happening on "day 1" due to rounding up during conversion.
Could you perhaps expand on this effect, ideally in a mechanistic manner, or point me towards a source that explains the influencing factors and outcomes? I am trying to understand the different processes at hand.
I've learned this long time ago. Probably early 2000s when there was the debate about joining the EUR.
I thought the basic explanation about money supply was sufficient, but I can try expanding on this.
A typical medium sized country having its own language that has had its own currency for a long time is much more internally economically integrated than externally. We can simplify this by saying huge majority of businesses take part in economic activity within the country, not outside.
This gives us some basis to consider it in separation to it's neighbours even if they are in a single market (smaller countries have less separation, bigger countries more, many factors influence the depth of separation but it exists strongly in countries like Poland).
So this is why it makes sense to talk in terms of money supply in terms of this "island" of economic activity regardless if it has its own currency or shares another.
The we have certain amount of GDP growth each year. More goods and services are produced each year. But simplifying, let's say you and your neighbor are on an island and you have 52 tokens with witch you trade. You catch fish and he works in a field of wheat. You pay him 52 tokens over the course of the year for his wheat and likewise he pays you the same for the fish (one per week for a price of one token).
Suddenly you find a net on the beach and you don't need to catch the fish with a DIY rod. You can catch 5 fish per week rather than 2 of which you sold 1. Now you have 4 fish per week to sell, but the guy only has 1 token per week. So if you want to sell all your fish you have to drop the price to 0.25. You do double the work (the nets are heavy) you get 4x the fish and yet you get the same tokens and wheat. Not fair. So you don't catch more fish.
This is why we need money supply to grow (or be procured by exports, but let's leave this complex topic for now) if the total of goods and services grows too. Ideally at the same rate or slightly more so goods do not depreciate in price.
I already mentioned one reason why deflation is bad, it demotivates producers from growth. Second reason is many costs are static, so it may send them into bankruptcy if others sell more than them at diminished prices. The third reason can also illustrate why we need some inflation.
The inflation is necessary for people to have an incentive to invest their money rather than stuff them into a mattress. If we have deflation it literally makes sense not to spend your money today, because you will get more goods for it tomorrow. Until everyone does this and prices go so low half of business go bankrupt.
So this is why you need money supply to slightly exceed the GDP growth. This subject can be as simple or as complex as you want. But there are basic truths that work on all levels of complexity. This is one of them.
Doesn't really matter because being in EU you can't print money, being euros or whatever local currency you have.
https://www.reuters.com/article/world/ecb-to-print-1-trillio...
And? A single country can't decide to do that even if they don't have euro.
How not? Germany does it all the time.
Exactly right.
The euro has benefited countries like Germany a lot but not necessarily all countries.
Controlling currency is one of the most important aspects of being a sovereign country. Poland should adopt euro not sooner than Denmark and Sweden.
Denmark have pegged the krone to the euro. They haven't adopted it, but tied themselves to the Euro. They still maintain control of their currency, but most of that control is used to maintain the value to the euro.
That's because the powers that be want the euro, but the people didn't. They were asked in 1992, 1993 and 2000; and effectively they said no to the euro every time (yes, I know; in 1993, the euro was specifically opted out, but the fact that it was approved when the year before a referendum with the euro was rejected suggests – at least partially – that it was a rejection of the euro (among other things)). Denmark thus came into the EU with 4 opt-outs (one of which has since been rescinded (defence) and one which turned out not to matter (union citizenship)), and they can only be removed with referendum (see for instance the euro one in 2000).
Prior to the adoption of the euro, the Danish crown was pegged to the D-mark (since about the mid-1980s), because Germany was the biggest export market for Denmark (still is), and thus having a currency that's stable towards what the Germans are using has been good for Danish exports (less sure how relevant that still is). (Sidebar; had the original motivation of Alternative für Deutschland been successful and abandoned the Euro for a return to the D-mark (neumark?), it would have put Denmark in an awkward position.)
This all reads as symbolic nationalist policies with an added burocracy thus costing more than it should. "We need own coin to control [insert nationalist thing here]" but in practice you won't and never did.
The last time I was in Denmark my bank nicely charged me for the conversion despite the coin being fixed to the euro. It is just a money costing machine which adds no value.
If being nationalistic means preferring that currency in your country is controlled by the government you have elected and not by ECB that you have zero control over, then yes.
Ask Greeks how much they enjoyed ECB involvement.
By adopting euro you get a seat at the ECB and can influence monetary policy of the whole Eurozone.
The same way as having the seat in the UN's Security Council gives you the influence, but in the end France has little to say when compared with US or China.
Germany even without any representation in ECB will have much more to say than other countries. Because in the end it is a real political power that allows anyone to make decisions.
The Danish krone is pegged to the euro, meaning it's already effectively controlled by the ECB.
It is not fully pegged, and though it ties their hands somewhat, this is not "effectively" the same as adopting the euro. Krone still can be un-pegged if Denmark decides to do so.
It can be unpegged at a moments notice. Euro countries have a lot more work to break free.
As noted, the politicians wanted to switch to the euro; but it's the voters who said no. Twice or thrice, depending on how you count. That isn't a case of "symbolic nationalistic policies", but rather a state apparatus trying to get around the rejection, whilst sticking to the text of the referenda (but perhaps not the spirit of it).
If they choose the policy that is being imposed to them by the elites they are enlightened, otherwise they are nationalistic ignorants.
If (when?) there's another Euro crisis, being pegged gives you a lot more room to manoeuvre than being actually in the Euro. If necessary de-pegging would be disruptive but very much possible, if you're fully in the Euro then you are riding the train to its destination whether you like it or not
De-pegging would require selling your euro reserves and buy other currencies. I wouldn’t call it disruptive but a disaster. You’ll end up getting enormous loans that generations after you will have to pay.
Having a stable and robust currency that enables economic activity is the most important thing. Adopting the Euro is certainly a way to achieve this.
That currency has a fixed exchange rate to the euro. Any perceived sovereignty benefits are fictitious.
The biggest sovereignty benefit is that it can stop following fixed exchange rate if necessary, what is much easier than moving away from euro.
In what way? Both need a constitutional change for every country this distinction is relevant for.
You are overcomplicating this. Poland is nepotist kleptocracy, EU and NATO membership away from Belarus. They should adopt euro since yesterday, it's strategic goal in line with membership in EU and NATO.
Switzerland can have their own currency, where inflation over 2% is a scandal. Sweden can have their own currency, they produce their own cruisers, submarines, fighter jets, and artillery. Poland kicked out their last baby boom into emigration and now have the same demographic and immigration crisis as geriatric Italy and Germany. They have nuclear power plant company operating with its board receiving executive salaries for fifteen years now and... no nuclear power plants. Accumulated inflation since pre Covid era is 43% and doesn't look to be stopping. Own currency enables enormous fraud and creates class of oligarchs.
Inflation rose everywhere in Europe due to the economic shock caused by the pandemic and the war in Ukraine.
In 2022 inflation rate in Poland was 14% compared to 8% in Spain for example.
2024 figure (for Poland) was down to 4%.
Citation needed on how corruption levels in a EU country depend on adopting the common currency
Well, Switzerland is not even in the EU, so it's comparing apples and oranges.
Switzerland is not in the EU but is in e.g. Schengen Area (which seems to be disintegrating right now). They are in a luxurious position to cherrypick whatever they want.
who is non-democratic and why?
The EU institution because of pragmatic and systematic properties. Ultimately to say something is democratic or not is a subjective opinion, but EU proponents have made the mistake to brush such criticism away.
Since then the EU is mostly developing in a wrong direction.
Who is not democratically elected?
The EU Parliament is directly elected. The EU Council is comprised of EU country head of states, which are all directly elected. The EU Council and EU Parliament then elect the EU Comission.
Sounds democratic to me.
The EU Parliament is not democratically elected because votes from member states have a different weight. The election is free but not fair. It's also one of the few parliaments that can't propose laws on their own but can only veto laws proposed by the EU Commission.
The powerful EU Commission being appointed by governments (and again only approved by the Parliament) is a form of executive federalism. This makes the chain of legitimacy longer and longer which is hardly positive for democracy.
Small states are usually given more weight in parliament. This is commonly considered more democratic.
The commission is elected by the parliament. This is democratic.
Would it be an improvement if parliament could propose laws and commission members. Maybe. But saying that this makes the EU undemocratic is unreasonable.
in most contries votes have different weights. look at the US, or other western countries where minorities for example are boosted to be represented in the parliament. judging by this no country is democratic.
In the US, votes in the congress, senate and president have exactly equal weights between states? Not an expert but I suspect we're in the kettle-pot area here. Not even getting into abysmal voting procedure/implementation which would be inconceivable in the EU.
To you it may be democratic enough. Not for me and the parliament lacks legislative initiative which in reality means the commission steers the ship.
It is more of a bureaucratic technocracy with democratic fig leaves. People often attribute competence to technocracies, but that is an illusion.
Also I don't believe you can move up government function to layers above your national government and still call it representative.
In reality the culture and circumstances of parliament members is too far removed from the voters. I also cannot know the other representatives, so my voting decision will always be restricted to a shallow popularity contest. But as explained, this doesn't matter, because the elected representatives cannot implement any agenda.
> In reality the culture and circumstances of parliament members is too far removed from the voters. I also cannot know the other representatives, so my voting decision will always be restricted to a shallow popularity contest. But as explained, this doesn't matter, because the elected representatives cannot implement any agenda.
That’s an odd thing to say when there is a real chance of the commission failing a confidence vote this week. We might end up with a new commission due to the conservatives colluding with the far right to abandon the climate agenda entirely.
This is a very concrete consequence of the voters electing right-wing parliamentarians.
Seriously the commission works at the mercy of the parliament, not the other way around.
How is democracy subjective? Because most democracy is indirect?
Democracy is a real democracy if voters feel represented. Perhaps there is a voter here and there that has an objective perspective if representation is enough or not. But I wouldn't bet on it.
But you said yourself, that there are different lavels of directness. That is the core argument where everyone has different expectations.
The core argument sounds a lot like "it's not true if I don't feel like it's true". Which of course decades of anti-eu parties and ads can have a massive impact on.
You don't have to engage with this kind of criticism but it isn't entirely recent or new nor too complicated ot understand the issues people might have.
> supra-national non-democratic organisation
What part of the EU and ECB is not democratic?
well said. facts.
I think there's a reality for (visiting) consumers, Schengen has more value than the currency union, at least if you're not a user of cash.
My experiences in non-Euro, Schengen countries is that all payment terminals offer me the choice to pay in Euro or the local currency. In many cases in tourist areas (of Czechia, Poland, and Bulgaria) I only encountered terminals that asked for payment in Euro.
Schengen is incredibly useful, especially if you have to transit through several countries. It's also true that the decrease in cash usage has reduced the benefit of the euro.
However, the benefits of a single currency go beyond cash. It's also about understanding prices. You see a sign for coffee and it's 1199 Hungarian Forint -- or it's 14.99 Polish złoty. It's not clear at all what those numbers mean. Sure it's possible to pull out a currency calculator app to see what the rate is today and what it means in euros. It's not an insurmountable problem, but it is bigger than a mere inconvenience. It's constant friction on not really understanding what's going on. If those coffee prices were instead 2.99 € vs 3.53 €, you would immediately see that the Polish coffee is 20% more expensive.
--
As for the payment terminals offering to pay in Euro, as others have already noted, that's a scam. There is a hidden fee, usually around 3.5% - 5.0% of your total, that you get charged for this "convenience". Refusing this and paying in the listed currency will mean that your own bank will do the conversion, which is basically always going to be far cheaper.
Unfortunately this currency conversion scam is so lucrative that even big brands engage in it. Amazon for example asks what currency your card is in. If you select some currency other than what this sepecific Amazon's listed prices are in, well, you're in for another juicy hidden fee, this time to Amazon.
This isn't my experience, so I think people should pay attention to their specific situation.
Granted, I haven't recently been to any EU country without the Euro, but my main bank charges extortionate conversion fees, 2.sth%, with a ridiculous minimum per transaction.
A few months ago, I've ordered something off Amazon UK (while in the UK) and the conversion they offered was very close to the official GBP / EUR exchange rate, way below my bank's minimum. The price wasn't high, either, on the order of 10 €.
My experience is similar to yours. Banks and credit cards here, love to charge a 7% (total) currency conversion fee. I happily allow Amazon (1%), and basically everyone else to do this as it is much, much cheaper. There are different financial experiences in different countries.
Non-Schengen EU Passports are basically the same thing for e.g. inter-railing or other journeys involving multiple border crossings.
Also in Europe people use the likes of Revolut to set up virtual native currency accounts on the fly (with IBAN) with FX free transactions up to a certain level per month dependent on tier.
> Non-Schengen EU Passports are basically the same thing
It's not about passports, it's about border controls within the area. Before Schengen you would have to wait for hours and hours in a queue at the border. Now that border check doesn't exist anymore. The check doesn't exist regardless of what passport you have, there's just nobody there.
It's usually better to pay in the local currency than Euro. The currency still has to be exchanged somewhere, and the banks usually have better rates than the terminal operators.
Newspapers even advise travelers against terminals who try to trick paying in Euro instead of local currency. This is a rip-off.
I’ve even had my credit card provider message me to warn me before after putting a couple of transactions through! Hardly an unbiased source, but their rates are much much better
Hm I always wondered about what this choice actually translates to, what’s the underlying logic determining how what I pay in -> where conversion gets made?
It's called DCC and you are legally required to be offered a choice. If you choose the local currency, your home bank does the exchange and the rate is basically always better. If you choose your home currency, the terminal operator does the exchange at a terrible rate and often slaps on a hefty fee for the "convenience".
To make things more complicated: it's not necessarily your home bank making the exchange, it can also be your card scheme (e.g. MasterCard/Visa/...). However, this is something you don't get a choice in. Your bank has an agreement with the scheme which foreign currencies are handled by whom. In any case, the rates used by the schemes are generally also pretty good.
Thanks.
The lack of direct documentation/instructions or link in the terminals to official rules strikes me as horrible ux. You basically just have to be in the know or know who to ask?
It is horrible UX and one might argue intentional. The terminals are provided by the acquirer, i.e. the same party that stands to make extra money if you let them handle the currency exchange.
In Germany, there was a sliver of time where stores essentially taped a piece of paper to terminals with instructions and big red arrows to select a specific scheme because that would benefit the store (and not cost the consumer extra). It didn't really stick, however. I suspect because it was two extra button presses and the consumer wouldn't notice either way.
Payment terminals can offer whatever currency exchanges they want, but usually it's just a way to fleece you on the spread, nobody is doing you any favors, it's just that whoever in the chain gets to perform the exchange gets to set the fees and the spread and most people get confused by currency exchange so it's in every middle man of the chain's interest to be the one to perform it and get the spread themselves.
While currency exchange offices are honest and fair?
If you use your bank's rate by paying in foreign currency then this is usually fair, at most they will add a 1% foreign currency transaction fee.
When it comes to exchanging cash, avoid currency exchanges at places like airports, tourist hotspots, etc. as they will usually offer worse rates than elsewhere.
That’s not the alternative, the alternative is to let your bank or credit card processor handle the exchange instead of the terminal operator.
Yeah never use that offer to pay euros its just scam. Get some travel card like Wise you will save a lot of money and get better feel for the prices.
It’s the 21st century, I pay for everything by card, currency barriers are way below Schengen and language barriers
Except if you are a Finnish person who lives right next to Sweden (SEK) and Norway (NOK) who are not using Euro (and Russia but that's a different story).
I live in Sweden at the border of Finland and there's very little issues with crossing the border and paying in another currency.
Was it any easier when Finland was using the markka?
I have always felt it was a mistake allowing countries inside the EU but not the currency. But when one looks at the dates - and they are 6 years apart - it becomes clear why. I wonder how it would have turned out had Euro and EU been launched together. Would it have been "a package" or optional?
All EU countries are required to join the euro. This was agreed in the 1992 Maastricht treaty when the EU was founded (and the EMU, which was the starting point of the euro). Only Denmark and the UK negotiated an opt-out at the time.
Only problem is that there are no deadlines and it's up to the country to make a plan for adopting the euro.
Are you sure it's in Maastricht? I think the automatic requirements met -> has to join were added in the Lisbon treaty, Maastricht just established the requirements but didn't force joining, which is why some older eu countries which would meet them haven't joined yet.
the same treaty says state financing through the ECB is illegal, but they do it anyway.
They don't?
All EU emitted debt goes towards specific projects.
what? the ECB is buying state bonds. maybe thats the reason the ECB is its own state, no authorities allowed to enter the building. wondering how they will audit the ECB. ahh right, they wont. :)
https://en.wikipedia.org/wiki/Potential_enlargement_of_the_E...
I think you meant this: https://en.wikipedia.org/wiki/Enlargement_of_the_eurozone
Poland will not adopt it in foreseeable future because it makes no sense: the Polish currency (zloty) acts as a kind of bumper in difficult times. It's very simple: something bad happens like a crisis or a war, investors immediately sell assets deemed as risky (such as zloty), zloty goes down by x%, and automatically Polish products and services become more attractive by x%. This all happens by itself. So for the Polish economy it's a no brainer.
For people themselves, they're not so keen either as they know well adopting euro was abused in other countries to increase prices (and not just round them up a bit). So basically nobody wants it, even if there are a few real benefits of joining, such as potentially lower mortgage rates which are among the highest in the EU).
> Credit where credit is due: the EU gets a lot of flack for being bureaucratic, hidebound, sclerotic, whatever, but the single currency has been a success and it's still expanding, 26 years after its creation.
For certain definitions of "success". The 2010s weren't such a great time:
* https://en.wikipedia.org/wiki/Euro_area_crisis
The EU isn't as integrated (e.g., labour mobility) as other currency areas, and so problems in one region are harder to fix.
> travel from Spain to Greece entirely through the Eurozone
I'm not euroskeptic, but does it even matter in the age of ubiquitous digital payments? IMO SEPA is far more important development than cash itself.
The crazy thing is that it was US pressure on Europe in the late '90s that led to adoption of the euro.
I am not aware of this. Can you give us a hint what that was?
Euro was part of the Maastricht treaty which formed the EU as we know it today in 1992. The euro part was a power move of France against a reunited Germany which back story origins in the early 80s. Obviously backfired.
How did it backfire?
Because Germany is the dominant power in the European Union and France isn't
Success, yes it has survived. But it has cost a lot to people and countries.
I'm not an expert but this is the best value for the cost if you ask me.
For most people the benefit is no currency exchange on holiday.
Cost is loss of key economic levers, price increases, and potentially less competitive exports.
I don't think a blanket statement like yours holds. Ot works for Germany (unsurprisingly) but some countries suffered.
Random observation: I remember seeing the second round of euro bills and momentarily thinking, "EBPO? cool, but why did they add Cyrillic to the design?"
It was specifically for Bulgaria, the only EU country to use the Cyrillic alphabet. Eurozone membership was a distant thought at that point, but they knew they'd be in eventually. Now's the time!
Because they wrote ΕΥΡΩ specifically only for Greece, the only country to use Greek alphabet.
Technically, 2 EU countries: Greece and Cyprus.
Right but back then Cyprus was not an EU member.
Nice. It’s amazing to see the progress Bulgarians have made in the last 20 years after joining the EU. I can imagine it hasn’t been an easy process.
Two things that surprised me when I spent a couple of months in Bulgaria:
* Bulgarian support for the EU is pretty low and people didn't think it made their life much better
* Bulgarian support for Russia is very high, like 50%, probably due to their historic help in kicking out the Turks
Bulgaria economy and the average citizen quality of life are not that correlated. You can have one improving while the other is deteriorating. We saw what happened in the US when such a gap became wide enough.
By many metrics (life expectancy, inequality, literacy, poverty rates) the US is a third world country.
No, it really isn't. Although there are some pockets of poverty that come close.
Life expectancy in US is 78 compared to 82 in Europe.
Child mortality is closer to Africa than Europe.
Again, about children, US has the second poorest children among the 35 most developed countries in the world.
More than half Americans have their literacy prophiciency below elementary level.
There's almost a million homeless people in US, that's more than in several rich countries like Japan, Italy, Poland, Germany, etc, combined. Hell I've never seen bidonvilles and tents all around cities in Europe or most of Asia like I've seen in LA or SF.
Inequality in US is at south America level.
US has more incarcerated population than all developed countries combined.
Rich people in 3rd world countries do very well.
Rich people do well everywhere
You must be American. Only Americans hate their country that much.
So true. The weirdest part is that so many non-Americans think the same about America whilst simultaneously lining up to legally or illegally immigrate there.
I don't think a "third world country" or "developing country" mean anything any more. Turkey/Istanbul and Congo/Kinshasa are both developing countries/cities. One has issues but functional transportation, water/electricity, acceptable healthcare, etc. and the other is a literal shit-hole. The term was invented very long ago and now is no longer applicable.
Edit: Also third-world country mean something else completely since Turkey is first-world by original definition.
Even grok would call you out on this.
You are just plain wrong.
Also, social mobility is preferable to inequality. Inequality is terrible on many levels.
Everyone is poor – low inequality (1)
Everyone is middle class – low inequality (2)
Many poor, few rich – high inequality (3)
Theoretical cases, not observed in the real world:
Few poor, many rich – high inequality (4)
Everyone is rich – low inequality (5)
The metric of "inequality" only scores well with either poverty (1) or average outcomes (2) in the real world. Is that socialism or communism? I forget.
Bulgaria has an internal coherence problem. There are brilliant people but also many who believe bullshit communist fairytales.
1. Many people have unrealistic expectations. In reality, no one is coming to save you, and 99% of the time, you need to save yourself.
2. The Russian propaganda story was taught in schools from 1945 to 1990 and beyond. When I was in elementary school in the 90s, it was still taught by inertia. I would bet it's still taught today, 2025 (!), in some shape or form. Yes, Russian actions in the late 1800s had the side-effect of liberating Bulgaria, but by all historical accounts, that was bound to happen since the Ottoman Empire was falling apart.
The most significant action taken by Russia (the Soviet Union) was the occupation of Bulgaria following World War II. The resulting communist regime initially jailed or killed any person who dared speak against it. This is not commonly taught or talked about in the country, even today.
https://en.wikipedia.org/wiki/People%27s_Court_(Bulgaria)
Credentials: I am Bulgarian.
> The resulting communist regime initially jailed or killed any person who dared speak against it.
That's whole modus operandi of russians entire 20th and 21st century. Really, a cancerous mole that wants to spread at all costs across the face of whole Europe, and the only thing it understands is the rule of stronger dog fucking the rest without a care.
I've grown up in communism too albeit a bit more north, a whole nation enslaved for more than 4 decades by russians. The scars this oppression had left on the soul of my nation are still very visible these days and not going away anytime soon. That depraved nation never even acknowledges atrocities it was doing and still keeps doing on a daily basis.
The saddest part they were very actively shooting/electrocuting people that were just trying to escape to the west, just to show to the rest of population its not worth dreaming of freedom in any way. A milder North korea. I guess dictator's playbooks are very similar everywhere.
It’s also more of a generation thing though. The older people are nostalgic about the past and their youth and for a country that experienced 2 decades of very low birth rates that’s the 70s and 80s and those years are under the communist rule and very good years for Bulgaria as the country was experiencing economic boom from computers and electronics manufacturing.
Also, under under the Communist rule supported by USSR, they indoctrinated people into a version of history that Turks are the absolute evil, and Russians are the absolute angels saving them from the ottomans.
I.e. in pre-EU era it was called Ottoman slavery, later they start calling it Ottoman era as it was more accurate as Ottoman’s system was based on collecting taxes and resources from the conquered places when giving them plenty of autonomy. Obviously not ideal but far from slavery.
>that Turks are the absolute evil
Devshirme, Janissary corps, Batak massacre? There is huge blood debt that is owed to the Balkans and Armenia by the Ottoman Empire and their successor states.
Tell me about an empire who conquered and held conquered land through asking politely. If you are able to come up with any, Ottomans certainly were not among those sure. That's why people don't like being invaded by empires. What do you think the first and the second Bulgarian Empires did exactly?
BTW Just like the way Bulgarians may not recognize that the Bulgarian Empire had a military and killed people in order to take others stuff and force them into things they wouldn't do unless defeated through slathering each other, Turks also tend not to understand that institutions like Devshirme or Janissary weren't liked by the people subjected to those.
For example In their mind Devshirme was an education program that gave the opportunity to minority children to have great careers and indeed that was the result(they don't think about how those kids were taken into the program).
Similarly Janissary were elite units with lots of sway in the administration, in their minds Janissaries were spoiled soldiers that are hard to satisfy.
Also, all the wives of the sultans were women from minorities. In the Turkish mind they were lucky women with a lot of influence on the empire. An entire genre of soap operas are made around this and they are very popular in the countries that used to be under the Ottoman rule. Including Bulgaria.
Oh of course. This doesn't invalidates the bad blood. This doesn't mean that I would be sad if Turkey is humiliated and Hagia Sofia becomes once again orthodox church once again. And Istanbul is renamed to Constantinople.
The bad blood doesn't make sense, it was an age of the Empires and it was all business and Ottomans didn't do anything particularly different than everyone else did so I don't think that it is fair to say that Ottomans were evil. If anything, under Ottoman rule despite the atrocities minorities kept their language and culture unlike the people subjected to Western imperialism in Africa or Americas. One can even argue that Ottomans were relatively gentle.
Let's hope that we never go back to these days. Imperialism is evil and I'm sorry that Erdogan and other autocrats are trying to revive those days. I also agree that it was very offensive for the christians to turn Hagia Sofia into a mosque again(was a museum till recently) and I would love to see it becoming a church again.
Also, let's stop renaming stuff. If you like Istanbul you can move to Istanbul, if you want to own istanbul you can purchase a property in Istanbul.
> Tell me about an empire who conquered and held conquered land through asking politely. If you are able to come up with any
This is not what it's about. It's not about the Turks being evil and Bulgarians et al being angels. It's about the fact that Turks refuse to accept responsibility.
Let me give you an example. I'm Romanian. There are many uneducated folks you'll meet in Romania who deny we killed hundreds of thousands of Jews in WW2. But no serious politician, historian, public figure, or educated person denies that.
The same is not true in Turkey. Pretty much everyone denies the Armenian Genocide.
All of us have shameful periods in our history, but some of us at least have the decency to not deny it.
But, of course, how could you see the genocide as evil when you can't even come to grips with the older Devshirme, a practice where boys were abducted, mutilated (circumcision), forced converted to Islam, executed if they were found praying to Jesus, and trained to fight and kill their own countrymen.
So, you're describing war? The Russians are doing that to Ukraine right now too btw.
Yep, and if Ottoman empire did evil things, Russian empire wasn't historically any better. At least Turks mostly stay inside their own borders these days, while Russians haven't changed one bit.
Unless you were Armenian.
Not at all, Armenians were also an integral part of the Ottoman society and that’s how you still have plenty of Armenian cultural heritage dating back to Ottoman times in modern Turkey. You must be referring to the events around WW1 that led the loss of huge numbers of the Armenians through atrocities committed by the Ottomans which some say that it was a genocide, others say it was poorly managed suppression of a rebellion in a dying empire. Still unresolved issue unfortunately.
On the other hand Bulgarians and Turks teamed in wars after the forming of the new Bulgarian state.
> others say it was poorly managed suppression of a rebellion in a dying empire
I don't think many say that at all outside of Turkey/Azerbaijan/Pakistan.
True, I'm also inclined to believe that it started as a suppression attempt that ended up being a genocide as "an easy solution" to make a problem go away as the dying empire wasn't able to contain it.
I recall reading the communications of some Ottoman officials trying to cash out the life insurance policies of the Armenians. Pure evil, honestly.
In that sense the Holocaust was also the "easy solution" to "make the problem go away" when deporting Jews (and other minorities) became too much of a hassle for the Nazis.
They didn't start with the idea of "let's kill everyone", it built up from the 1930s process to deport "undesirables", when it became too much work they decided to kill everyone instead.
Genocide is genocide, doesn't matter the seed that started it.
Sure, nazis even called it “the final solution”.
The difference is that the the ottomans didn’t have an anti-armenian culture going on and the Ottoman rule wasn’t being legitimized over stuff like “fighting a war against sleazy Armenians who infiltrated us”. It was quite the opposite, with rise of the nationalism in Europe minorities in the empire were the “anti”.
Ottomans didn’t do that because they believed in the inherent evil of the Armenians but because they were responding to those nationalistic movements. The distrust towards Armenians developed with the rebellions that were supported by Russia etc. Armenians weren’t targeted for their Armenianness. In other words none of this would have happened if there were no rebellions. It was done to address a specific problem, can you say the same for the holocaust? Was Hitler trying to address actual troubles that the Jewish minority caused?
Do you know who were/are targeted? The Alawites, it about the people would say things similar things like an anti-semite would say for the Jews. It’s also how you get instantly cancelled in Turkey.
> poorly managed suppression of a rebellion
Or a too well managed suppression.
“ We have been blamed for not making a distinction between guilty and innocent Armenians. [To do so] was impossible. Because of the nature of things, one who was still innocent today could be guilty tomorrow. The concern for the safety of Turkey simply had to silence all other concerns.”
Could be, I agree. I'm inclined to believe that it become a genocide once the incompetent administrators failed to address the core reasons and thought that it would be easier to make these troubles go away by killing everybody.
Luckily something like this will never happens today, especially in a civilized country.
> Still unresolved issue unfortunately.
The Armenian genocide is very much a resolved issue. No serious historian denies the genocide any more than he denies the holocaust.
And if the people vote against the EU in the referendums, one's authorities just kinda look the other way.
For anyone who is new to this https://en.wikipedia.org/wiki/2005_French_European_Constitut...
Also the experience of Greece not too far back and the austerity imposed by Germany is not quite forgotten. Varoufakis[1] can attest to its severity. The Greeks voted against it but Germany imposed its will.
[1]https://jacobin.com/2025/07/yanis-varoufakis-on-the-legacy-o...
This is a very distant view for the reasons behind the crisis in Greece and for sure the government of 2015 was not a victim. In the context of this thread, Bulgarians as Greeks before them, enjoy the money from the EU but don’t like the responsibility that comes from it, to reform, to also contribute and that you lose the own currency perks while you gain on other fronts. Of course there is a lot more here to discuss but this is my experience being a Greek in Greece.
The government was not the victim in deed. But up until today you can see the results amongst the population. You can Prune for growt or you can just cut the plant to the ground hoping it will survive.
Greece was sacrificed so eurozone (especialy Germany) could hide recession by bailing out banks (through bailing out Hreece). Greeks know and believe this. That makes their relationship with EU quite complicated.
You know, there's Greece and Portugal. Mentioning these two as they got Troika following them.
Portugal managed to get out of the storm, and debt is now below GDP.
Greece took many bad steps trying to recover. And its debt shows that. Their governments have had a big part of the blame. Hell, at one point they didnt have enough money for citizens to withdraw from banks.
And that was before Troika.
> And its debt shows that. Their governments have had a big part of the blame. Hell, at one point they didnt have enough money for citizens to withdraw from banks.
Sure but so do the creditors. If you keep giving mortgages to anyone with a drivers license that's on you buddy.
At almost no point is there enough money for citizens to withdraw their money. Modern banks don't keep their assets as cash.
> If you keep giving mortgages to anyone with a drivers license that's on you buddy.
Isn't this the USA system?
Not just the USA system. EU and especially German banks gave plenty of credits to Greek banks, knowing that they will probably spend it on German products, even if they have not much means to repay them. Plus, the EU knows full well that if Greeks overspend they can easily be pressured into austerity.
This went swimmingly for everyone involved, with Greece now in more debt than ever (debt went from 145.45% of GDP to 209.40% of GDP). And fascist parties going from virtually non-existent to mainstays.
Adding low-efficiency countries like those in southeastern Europe is great for the EU's major exporter - Germany, because it adds more customers who have Euros, and because it devalues the Euro, which means more exports. Better yet, because of Euro the new joiners can't devalue their currency and get their exports high enough to restart the economy, with only viable option being more in debt and/or leaving for Germany, while obliterating the local industries. Win-win-win. For the EU exporters.
So, yes, let's celebrate Bulgaria joining Hotel EU, where food is great, your bill grows exponentially, but you can't ever leave. By the end you'll just end up as a pool boy.
This is nonsense. Not mentioned is that Greece has borrowed excessively and had defaulted on its loans. A bailout was organized by the EU and IMF with terms that Greece had every opportunity to reject. No one forced anything on Greece. The referendum was not binding and political theater for the government of the time.
That Greece accepted the terms reflected the reality that the alternative was much worse and would have caused great suffering for Greeks.
What choice did Greece have? Germany was not extending favorable terms, they were punitive, so what choice did they have but take the least awful choice? Syriza tried but Germany had the upper hand and of course didn't give an inch --though Syriza tried very hard.
Varoufakis would argue the severe terms imposed by the creditors/negotiators exacerbated the fiscal issue. Yes Greece had issues but the creditors's terms exacerbated the problem, made things worse.
It's kind of like borrowing from a loan shark to pay off debts --on average, you're better off not. But hey, once you take it, you either pay up, or you lose something dear to you.
Greece underreported its debt until 2009: i.e. it borrowed too much while lying about how much it's already borrowed. That's the main difference between Greece on the one hand and Italy, Portugal on the other, in my eyes. Italy and Portugal too suffered a public debt crises, but they weren't so blatant about it. I sympathize with the common Greek man, and I wish their crises had been managed with more success, but I also don't feel especially interested in bankrolling Greek policies that led to this crises.
I dunno. Pretty sure creditors aren't innocent little old ladies. They're financial killers and knew the situation but also knew they had Germany and the Troika behind them to save them if things went south (as they did). It was win-win for them. The economy miraculously grows: win! the economy sours: win!
Sovereign debtors also knew that them being part of the Eurozone gave them better borrowing rates because creditors perceived Eurozone as low risk. Both the creditors and the debtors believed that they won't chaotically default because of the Eurozone, because that would endanger the Eurozone. If that were all, the creditor and the debtor would be equally at fault. But, when you add the underreporting by the debtor, that's different. Now, I don't see how you can make a case for equal responsibility, and the creditor being more at fault doesn't make any sense to me.
It was disqusting treatment from EU which needed to hide its own recession and blame a culprit.
Every other european media outlet talked about greeks (in very racist way) as lazy nation that doesnt want to work.
Not great look for EU. But i dont know about better alternative.
100% true.
And yet, Greece recovered to become a leading economy in the region. The propaganda is strong on the airwaves these days, just like in the US, one shouldn’t react to “facts” taken out of context.
It seems (from here), support for Russia is somehow magically going down as Russia’s economy is having trouble paying for its “support” abroad.
In which region is Greece a leading economy?
In a region composed of Greece, North Macedonia and Cyprus.
Doesn't sound right https://en.m.wikipedia.org/wiki/List_of_sovereign_states_in_...
Cyprus ranks 17th and Greece 32nd
> to become a leading economy in the region.
Leading compared to what, Romania and North Macedonia?
> support for Russia is somehow magically going down
I don't think support for Russia was ever notably involved in the whole clusterfuck regarding the Greek economy.
I'm not quite sure about that. Romania is bigger because it has a bigger population, but look even at this GDP per capita comparison with Romania.
It won't be until 2030 that Greece will recover, and I'm pretty sure it's slow growth is because of its huge debt because of the euro.> And yet, Greece recovered to become a leading economy in the region
I don't think that's true ... growth is good, but that's because there's a lot of catching up to do. If I remember correctly (and maybe I don't) then real GDP is still like -20% vs 2007, debt is EU-leading at like 150% of GDP, unemployment remains high, and wages remain low.
Definitely not an easy road but pretty remarkable when you zoom out
have you seen the roads? lol
Like the UK? I have. It just cost me 2 grand to fix the damage to my car from the pothole.
No, but have you seen the roads in other places? Roads are hard :)
What everyone is missing: the biggest advantage of the Euro is debt. Once you can take loans out in Euro, investors can give you lower rates since they’re not worried about a national bank going haywire and debasing the local currency. Also no potentially illiquid currency markets that need to be cleared going in and out of the currency.
Ask a homeowner the difference between a 2% loan (euro price) and 5% (local currency) and you’ll understand why so many countries have opted for the Euro.
One of the biggest effects of this will probably be increased Western tourism to the resort cities on the Black Sea coast. Which is good, I guess, for the local economy - but I did really enjoy how Burgas felt different from the typical Western coastal resort city when I visited. I hope it doesn’t lose that uniqueness as it integrates into the wider EU economy.
I haven't been to Burgas but Montenegro still feels rather different IMO. Probably it has to do more with local culture and with GDP per capita rather than the currency itself (even though you're right that the latter may slowly evolve thanks to easier inflow of money).
Depends on where you’re at in Montenegro. Parts of it are definitely still different (the capital, Ulcinj and the south, rural areas) but some of the coastal cities are becoming very generic global luxury stores and mass tourism.
At least - that was my experience spending a couple months there 2-3 years ago.
True, it felt a whole lot like Croatia near the coast of Montenegro save for the complemantairy ketchup they offer with pizza.
Hopefully the local vibe proves resilient
On the one hand, countries with different economic strengths having the same currency managed centrally isn't ideal.
But on the other hand, anything that reduces the domination of the US dollar is welcome.
> On the one hand, countries with different economic strengths having the same currency managed centrally isn't ideal.
Isn't this kind of what the US is doing though?
The US has a much more integrated economy - businesses operate nationwide, employees routinely move across the country, and most economic policy is set centrally. And even then there are still downsides where e.g. interest rates set to suit the national economy exacerbate the problems of the rust belt.
> businesses operate nationwide, employees routinely move across the country
Could you elaborate on what you mean? I've not run a business, but from the people I know who do complain similarly about cross-EU and cross-US-state business.
Like the company based in Texas who got their first employee in New York. Suddenly they needed some sort of presence in New York State, get a separate insurance, and accountants for New York State. (federal, state, and city income tax). They have to really want that employee.
From what I've heard, selling across state lines is fine in either case. Getting employees / expanding into new state is in both cases a big deal. Withdrawing (presence, not sales) from a US state is spoken about similarly to if it's a new country.
Opening an office in a new state may be just as difficult as opening an office in a new country, but my sense is that both a) selling to the entire US and b) hiring employees from the entire US (with the requirement to relocate to the state where you operate) are substantially easier than doing the same things across the entire EU.
To be clear, I don't just mean opening a physical office. I also mean the cost of having your first remote worker who lives and works from another state.
For employee relocation, that's definitely true. Even moving from Hawaii to Alaska is less of a life change than Spain to Poland. Or hell, probably even Spain to Portugal.
I'm surprised to hear you say selling would be that hard, though. It'd be interesting to see a comparison. And there's also both B2C and B2B.
> I'm surprised to hear you say selling would be that hard, though. It'd be interesting to see a comparison. And there's also both B2C and B2B.
I'm getting out of my depth, so this is more vibes than concrete knowledge, but: Selling goods isn't that hard in the EU, but you do have to be set up to collect VAT at a different rate depending on where the customer is from, which is a barrier, whereas I think in the US you can just tell the customer that they've got an obligation to pay sales tax in their state? (I remember Amazon battling about this at one point, but I think the states backed down). Selling services cross-border is a nightmare, there's still not really any standardisation of what licenses etc. you need.
Plus of course even if there were no legal issues there's often a language barrier.
Yes, and it isn't exactly helping all of America, even if it is helping America as a whole
The euro may be imperfect, but it's one of the few serious contenders out there
They've been pegged to the euro for years anyway, so in practice not much changes day-to-day but symbolically and politically, it's huge
I hope Bulgaria and the EU have learned from past mistakes (I don't think they have). While EU and the Euro had good intentions and prospect, it turned out to be a disaster for some of us. Greece is in a recession for more than 16 years now, with no visible exit, because (one of many reasons of course) it couldn't devalue its currency back in 2009.
Now we might speculate that Greece couldn't have avoided this, even if it weren't for the Euro, but having lived this from the inside, I think that it wouldn't be that painful.
Countries like Japan, Italy and even USA nowdays, have comparable debt to GDP indexes, but none of them (as far as I undestand) have had this kind of dorp in living standards, price inflation or increase in poverty rates since 2008.
Best of luck to our Bulgarian neighbours. They are going to need it!
The Greek economy is still in recession? The EC seems to think it is doing fairly well: https://economy-finance.ec.europa.eu/economic-surveillance-e...
Certainly better than Germany (however comparable the two economies can be): https://economy-finance.ec.europa.eu/economic-surveillance-e...
Maybe the word recession was not accurate. Also Germany is a highly developed country, so it's expected to have minimal growth. Greece should be compared to other developing economies in Europe (mostly pre-communist states), and that comparison is eye-popping...
The real economy, the one that affects people's lives, is still something like 25% below what was pre-2009. In essence people are still 25% poorer than they were before 2009. That's the worst recession EVER recorded in recent history. Worse than the 1930s.
That's why Greece is only slightly above Bulgaria (yet) in real purchasing power compared to other EU countries.
Don't get me wrong. There were a lot of benefits for most of the EU countries, but the lack of common economic strategy, and regulation prooved catastrophic for some.
> Greece is in a recession for more than 16 years now, with no visible exit, because (one of many reasons of course) it couldn't devalue its currency back in 2009.
Greece is not in a recession, it hasn't been in one for a while. It's in austerity mode which I do agree it's a too blunt of a tool to use for recovery but alas those were the terms for Greece to get a bailout after its debt mismanagement (including lying in their official government reports for many years).
> Now we might speculate that Greece couldn't have avoided this, even if it weren't for the Euro, but having lived this from the inside, I think that it wouldn't be that painful.
And why do you think that? It's a small country, with a small economy, accruing so much debt that wasn't used for development which in turn didn't generate taxes in return. Notwithstanding the cultural practice of tax evasion, it was going to implode either way.
It would be probably as painful, or more painful, to be shackled to the IMF's terms (which always have included austerity) while holding your own currency which would be quasi-worthless because no one wants to buy your bonds unless you paid massive interests. Debt repayment premiums would be a massive headache either way in the Greek budget (with or without the euro), devaluing your own currency would create a lot of pain for the people since Greece imports a lot of more advanced stuff from other EU members, and also would erode all savings from a relatively old population.
I don't agree with the austerity bullshit, just to be clear, but I don't think there was any solution that wouldn't be painful, maybe different pains but it was never going to be much better.
I say that as someone who lived through multiple Brazilian crisis, including four currency changes to tackle hyperinflation, lived under IMF-imposed terms.
I understand the pain but in both cases (Brazil, and Greece) the absolute mismanagement of the state's finances for decades required bowing down to the powers that be (IMF, ECB, etc.) to save the country from bankruptcy.
Maybe so, but we are both speculating on this. However the truth of what happened with the Euro is devastating.
Also the IMF was also part of the Greek debt restructuring deal, so it wasn't that different from what Brazil or other countries have experienced.
I am not against the Euro, far from it. But the EU could have handled this crisis much better for the benefit of both Greece and itself. The Greek economy wouldn't have collapsed, and the anti-Euro sentiment which led to the rise of ultra-right-wing parties in EU wouldn't grow that much.
I am honestly surprised how many people here think this is a bad idea. I wonder why is that.
Look into Ukraine related threads. There is a huuuuuge amount of russian bots/trolls and tankies here.
EU is a sinking ship and more integration with it means more damage when it finally implodes.
Uk is much better after Brexit, right?
I mean, I feel I have to point out that Eurosceptics have now been predicting the imminent death of the EU and its predecessors for over half a century at this stage. "It's doomed" is not the most compelling argument.
nickslaughter02 accounts only comments seem to be slandering the EU.
It’s almost as if their account was created for this purpose. I sometimes wish HN had the lobsters invitation model.
Yes, let's silence opinions we don't like. Just like **.
[dupe]
Earlier: https://news.ycombinator.com/item?id=44412143
Almost but not quite: today's news is that the European Central Bank has signed off on this.
Doubling of the prices overnight coming like in Croatia and many countries before it?
Yes there's an inflation shock at the beginning, then salaries and everything adjusts.
Croatia hasn't really adjusted. Well, maybe it could be said that everybody adjusted one social class downwards. So people who were previously "upper middle class" are now solidly "middle class," people who were "middle class" are now "lower class," etc. The purchasing power of the populace has declined and not yet recovered.
So, after introducing the euro, and everything overnight becomes ~2x more expensive, salaries will match that trajectory and eventually also become ~2x larger, almost universally no matter the job type? Did I get your argument right? I ask because I don't think this actually has been the case with pretty much any EU country.
From what I have seen, salaries will certainly adjust themselves, and they will grow, but the resulting purchasing power is going to remain lower than it has been prior to introducing the euro.
Have you looked into Lithuania? (I don't know about other countries, only live in this one.)
Thought maybe I understood the discussion wrong, because Lithuania does have a minimum wage that is government mandated.
I haven't looked into each EU country but it's difficult to imagine that a salary of X * K EUR gross will become 2X * K EUR gross just because the country has switched to EUR. It's delusional at best.
lol, that's exactly what hes dreaming of.
...and trees start bearing sweets.
You have to back such claims with data. Also consider what happens in the said adjustment lag and how long it lasts.
I'm sure there was no doubling of prices, especially overnight.
If prices doubled so should GDP, right?
Citation needed.
Welcome friends!
This will likely come with a one-time significant increase in inflation, at least based on other European countries.
When Germany converted to the Euro, the conversion rate was (IIRC) about ~2 DM to the Euro but from what I recall, a lot of everyday things went from costing 7 DM to 7 euro, effectively doubling in price. IIRC France was similar (ie ~6.5 francs to the Euro but 10 Francs went to 3 euro, etc).
I've tried searching for any studies on this to see if the effect was measured and, if so, whether it held with later countries joining the euro.
I'm a little surprised that the euro has been this stable for this long (going on 30 years). Finland debated leaving. IT's debated if there's even a legal mechanism to leave. We still have the problem that the ECB sets eurozone monetary policy with Germany and Greece being vastly different economies.
I was in Belgium the week the Belgian franc converted to Euros. I saw no price changes other than rounding up or down to the nearest Euro equivalent price. If memory serves some stores showed prices in both denominations for a while which would not have allowed for stealth inflation to happen.
The currencies were pegged for a period before then so other than niche cases there really weren’t opportunities for massive price increases.
Did not happen in Germany either. Inflation and price hikes came but later. And had nothing to do with currency system but were overdue price adjustments or greed of companies.
I remember the rounding up in Germany. But that was the extent of it. It was a one time event and wasn't difficult to absorb.
> I saw no price changes other than rounding up or down to the nearest Euro equivalent price
Dunno about Belgium but what I notice in French supermarkets is that prices aren’t rounded at all. 10k SKUs will have 10k different prices (ish).
Plain frozen pizza? 4,62 EUR.
Same with pepperoni? 4,92 EUR
Domestic 500mL beer? 1,14 EUR
Fancier beer? 1,81 EUR
Plain frozen pizza? gesticulates annoyed in Italian ;-)
Belgium had double denominations for about two years. My mother owned a business at that time and she used the occasion to correct the prices a bit bit that was only because she lagged a bit on inflation.
I’m Belgian. This is correct. Even now, some people here still convert euros to francs to get a grasp on the value.
I did that a while ago and stopped immediately because it's scary and irrelevant. My parents house was wrote expensive at the rule they bought it at 600.000 Bfr. Now it's being valued at 600.000 euros. That's a factor 40 over about 30 years. When euro landed a beer cost about 45 Bfr, a bit over a euro. Now I pay €2,5. It's hard to compare prices over that period of time.
This feels odd to me. The only people I can really see doing this is ones that were 70+ when the Euro was introduced.
40,3399 BEF
They really hammered this in. It was even a question on my exams.
Missing piece of info: the official conversion rate is 1.95583 per euro. It will be extremely tempting for merchants to use 2:1 instead.
The situation was literally identical in Germany, where the official rate was also precisely 1.95583 to the euro (because the lev used to be tied to the DM at 1:1), but not so in most other European countries.
Covid sort of showed everyone how hard it is to survive as a small economy in the modern highly interdependent world.
One small disruptor to a core component of a small economy and they are standing outside the IMF to survive.
There are currently 50-60 small countries that depend on borrowing from the IMF (that too in dollars paying interest in dollars - given competition levels guess what dollar generating capacities small economies have? They end up economic vassals of larger systems or selling off national assets or being used in geopolitical games).
On the other hand look at China and India. They have more provinces/states than the EU and larger populations. Vastly differently economies spanning all those subunits. Yet you wont find any of those subunits complaining about their central bank setting monetary policy.
Why? Cuz look at the surroundings - Sri Lanka/Pakistan/Myanmar/Bangladesh/Thailand/Indonesia/even South Korea all at one point or another requiring the IMF to step in and bail them out when they ran into trouble.
The world is too complex and fast/ever changing and small economies are increasingly dependent on larger economies to manage the unknowns and unpredictability that lie ahead. Its almost become impossible to survive by themselves. Sort of like running a book store in the era of Amazon.
> Yet you wont find any of those subunits complaining about their central bank setting monetary policy.
This is ludicrously wrong of India, and I understand enough of human nature and economics that I’d be surprised if it were true of China, though it may be more suppressed.
Monetary policy is government policy. The ruling party is seldom uniformly popular across their entire domain. Perhaps you’re more familiar with US politics: broadly, rural is Republican, urban is Democrat. In India, the ruling party BJP has a lot of the north, but not so much of the south or east. Accordingly, you should expect dissent from regions with a different state government. And as for socioeconomic disparity between states, rich may complain if they seem to be subsidising poor, poor may complain if they don’t seem to be getting enough attention.
But is anyone asking for their own local currency or central bank? If not why not?
In some places I gather that pretty much happened during https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis.... (I happened to be in India at the time, but where I was it was more just extreme discontent with resignation, rather than threatening fracture.)
The discontentment arose because it was extremely poorly planned, and failed to address the very problems it was 'trying' to solve. It is very unlikely for a state government to implement a local currency and introduce more friction to an already painfully bureaucratic system; it is a politically disastrous move.
> Monetary policy is government policy. The ruling party is seldom uniformly popular across their entire domain.
If by monetary policy you are referring to fiscal policy, you're pretty much spot on. There's always in-fighting between states and lots of complaining about the central/federal government favoring certain states over others.
In many places people wouldn't ask because it's completely unrealistic to get it. Regions struggle to get a bit more independence from the central government. An own currency is completely unrealistic. Your argument doesn't work.
> Yet you wont find any of those subunits complaining about their central bank setting monetary policy
I mean and also the US, but the key difference here is that those are also cohesive countries where wealth transfers between different areas is the norm. Much less problematic if a policy is better for New York than Alabama if you know for sure that the federal government is going to make sure Alabama doesn't get screwed.
In the EU you have the opposite problem: policies that benefit rich countries will result in the rich countries complaining about how they support the other economies and moralizing.
Ofcourse they will complain but they also learn to stay rich and be a large power you have to pay attention to the needs of others. If you don't, others will step into that space and the less others depend on you, the less relevant you become. Its like a learning process that takes its own sweet time.
Bulgaria is still around so are other countries without the deluded euro. lol
Wasn't the lev pinned to euro for years, at the stable rate of 1 lev = 0.5 euro? Why the switching to euro would affect inflation much?
It's pinned at 1.95583 to the euro, not 2. If a merchant has a product that sells for 2 lev today, and they sell it for 1 euro tomorrow, they just increased the price by a bit over 2%.
No, in your example this will be a reduction of the price.
Soon all the prices will be listed in both of the currencies and they will be kept as that for another six months after the adoption.
The country already experienced quite a bit of inflation last years, regardless of not being in the euro. I don’t see why the change of the currency that is already pegged to euro since the creation of Euro will cause any inflation beyond the rounding and the rounding is for 1:1.95583 and that often provides rounding sown incentive as 4.99 becoming 2.04 and 4.49 becoming 2.2957
A more realistic concern can be that Bulgaria might start borrowing irresponsibly. Currently Bulgaria's debt to GDP is just around %22, which is very low.
In the Netherlands there was a brief spike of inflation, but that was due to rounding up, definitely not converting 1 NLG to 1 EUR.
The inflation did correct itself the years after (aka lower than usual). The perception with many people still is that the euro made everything more expensive, but that's only based on feelings. The inflation numbers tell a different story.
The euro and prices: changeover-related inflation and price convergence in the euro area - https://ec.europa.eu/economy_finance/publications/pages/publ... (June 2009)
Even though the Bulgarian lev has been pegged to the Euro for decades at this point?
Just as the Mark and the Franc were.
Surely they were not pegged for decades given that the Euro was introduced in 1998 and they transitioned fully in 2002?
It was pegged originally to the Deutschmark. If you look up a currency table the historic DEM has the exact same conversion rate as the lev will have.
I don’t think those two are comparable economies to Bulgaria 20 years ago.
Thinking about it, the comparison really isn't that bad. West Germany had just reunited with the East, and France was definitely on a similar upward trajectory as Bulgaria is today.
When the EU was formed, its members' economies were comparable.
The lev was pegged to the euro in 1999, Bulgaria was roughly 80% poorer than the EU leaders
(I'm using PPP figures from ChatGPT to make these comparisons, I don't know if I'm making any sense)
That supports my argument.
> I've tried searching for any studies ... but from what I recall
I mean if you've tried to find evidence and can't, this feels a lot like you're simply misremembering?
It's something that is pretty much taken as gospel in many countries that that happened
I've only checked the data for Italy but real inflation stayed pretty much constant while perceived inflation absolutely blew out of proportion.
So essentially people noticed some minority of shops raising their prices talking advantage of the little confusion around the exchange rate and never shut up about it since
Same in Germany. I remember the times, was a poor student. Restaurants took the opportunity to change prices, which everyone felt but did not influence the inflation. And that price hikes was overdue (at least that was the statements back then ... Which I found rationale)
exactly, Bulgarian here, born in Germany in 1988, so I lived with the DM and then experienced the Euro throughout my entire life, until 2023 when I decided to go back to BG. The Euro will make BG a debt slave on Germanys and France terms. Watch critical infrastructure being sold to China or who knows, just like Greece had to do it.
Since Bulgaria was already in a currency board with the Euro, they already were a “debt slave”, so nothing changes there.
it seems you are not understanding how dent unions work. lol
The Bulgarian lev has been fixed to the value of the German mark and later the Euro since 1997, lol.
Finally, some quality fearmongering on Hacker News /s
The Euro expansion is the mechanism the EU has to export inflation to other countries, similar to the way the US exports inflation with dollar trading across the world. When the easy expansion stops, this is when the debasement will start to occur. The US is already at this point, very soon the dollar will be less valuable as less trading is happening in USD.
I think there are other motives otherwise Bulgaria would say, no thank you. IMHO, the primary motivation is to establish/strengthen the single market and the economic cohesion of the EU. That inflation is a side effect of this (and part of the stabilization) might be the case.
we want to say NO THANK YOU by holding a referendum, but they wont let us. xaxa
the Euro has lost almost half of its purchasing power since its creation. bulgarians want the Euro so much, that they have to run tv ads, "we will become more wealthy by introducing the Euro", what? how will that happen, if you need more money to buy same or less products/services? lmao
Same for USD and other major currencies, as most countries have inflation around 2%. Only currency that has done significantly better is the swiss frank.
Through some technicality maybe it’s that, but food prices have increased by a large double-digit percentage. Construction materials (and laborers) are stupidly expensive.
if you think inflation rate is at 2% you must be living under a rock
On average over the last 25 years according to perplexity. (for example, found an old message about price of bread in 2000: 1.99 dutch guilders. You can now get a bread for 2 euros. That translates to 3.21%) I think a lot of people are overestimating inflation percentages over longer periods of time.
Historically other currencies have depreciated much more than the Euro. The LEV depreciated around 99% before being pegged to the Euro.
Well, the Lev was pegged to the DM first, which was a way stronger currency.
The euro has depreciated more (in both real purchasing power and against other currencies) than the Deutsche Mark.
The DM was seen as one of the strongest and most stable post-WWII currencies, while the euro has struggled with crises and inflation.
Bulgaria pegging to the DM in 1997 meant anchoring to a much harder currency than what the euro has become.
> Bulgaria pegging to the DM in 1997 meant anchoring to a much harder currency than what the euro has become.
Look, it seems you have beef with Bulgaria adopting the euro based on your other comments, but matter of fact is that many people remember the hyperinflation and the Videnov winter — especially older people that were queuing for bread with all of their lifetime savings disappearing overnight. Hence, the board staying almost 30 years. What’s scary for many is that the board in its current form is just a law that can be removed with simple majority, e.g. the current stable state could be made obsolete in a matter of a weekend — with devastating consequences for the economy. Adopting the euro means tighter integration with EU only and it’s mostly irrevocable … sadly for Russia and its proxies over here.
Bulgarians are using the DM since 1997 and the Euro since 1999, they just call it Lev. We have a currency board that requires every single Lev be covered by foreign reserves which as of current consist of 90% EUR and 10% USD, JPY, GBP and others. We cannot print money to control interest rates, worse we have no say in ECB policies at the moment.
For the Lev to be independent we have to exit the currency board but this is madness, since our exports are already adjusted to EU countries where the currency is EUR anyway.
Get ready for prices to increase significantly (but not necessarily orthogonally to income) just like they have in every other place that switched to the Euro
Poland has its own strong currency, but prices are growing, inflation feels high.
Probably a bad idea. The big economies of the eurozone have been in constant stagnation for the last 15 years. To me it seems that Bulgaria has jumped on Titanic on Qweenstown. I do hope that I am wrong, but those are the same people that made the plastic caps permanently attached to the bottles.
> but those are the same people that made the plastic caps permanently attached to the bottles
It's still hilarious to me how upset people are at this (or at least pretend to be).
My question is - who is buying all these drinks?
I haven't bought anything in plastic bottle for years. Most drinks are either glass or cans.
Milk cartons also have plastic caps for example, despite being primarily made out of paper.
But just because you don't drink soft drinks or bottled mineral water much, doesn't mean others don't either.
Have you even been in the parks and forests before, haha? :-D At least in Lithuania there were lots of caps lost - half of cleaning up the parks time was bending to pick out caps out of the dirt. Not anymore.
It's similar to free plastic bags or deposit system for bottles. Inconvenience is so tiny that no person genuinely complain about that (not for social karma/attention), but economically when there were millions of bags and half a million bottles sold every day...
To put it into HN-themed metaphor, reducing error log verbosity matters too, when you have millions of lines.
It is inconvenience for all, with at best minimal benefits, but it makes couple of bureaucrats and greens feel good about themselves. People are upset because it shows Brussels disfunction in a nutshell.
> It is inconvenience for all
Are you 80 or something? It takes two tries to adjust and understand that it is much superior to unattached cap.
The whole thing is a big meme to make fun of EU, because there’s barely anything else to complain about.
It's a huge convenience. I used to always misplace bottle caps and spend some time looking for them. Now I don't.
I don't get why people don't like it.
But it really isn't that inconvenient at all, and some of the caps are outright better now than the crap that preceded them. Bit like how the toilet water use regulations turned out.
I even find myself vaguely annoyed now whenever I drink from glass bottles, that those caps are loose.
> People are upset because it shows Brussels disfunction
Reminds me to that meme where the debated point is what OS is better, and the conclusion is that normal people don't talk about operating systems. The only people I ever hear mention Brussels unprompted are rightwing grifters.
I didn’t know this was an EU regulation, but if it is, it’s utterly dumb.
The new lids are harder for kids to use, bother you when drinking, get in the way when pouring and are a general nuisance.
> bother you when drinking, get in the way when pouring
How? Just rotate it by 90 degrees. It's really not that hard, and in return you will never lose a cap again and we reduce litter by quite a bit. It's a pretty good trade-off imo.
I never lost a cap in my life, people don’t “lose” them, they throw them away.
It bothers because it pulls back towards the bottle and presses on your mouth. Or if you use force to open it at 180, then it doesn’t screw back on properly because the plastic is bent and holds it in a wrong position. So again force is needed for something which used to be ridiculously easy.
As I said, kids don’t manage that well. For adults, it’s one more little irritant.
You allow your kids to drink from plastic bottles?
Not allowing them is a nice theoretical approach that completely fails in the real world.
It's a taxpayer's money so why wouldn't the taxpayers have a point if they think that their money is not spent best and, in the context of the global situation, not really efficient at all in making the quality of life of EU citizens any better?
To paraphrase this differently: if I as an investor gave you 100M EUR and 24 months, would you be happy to spend it for changing a frigging cap on the bottle or would you rather invest that money and time+people resources on something else?
> It's a taxpayer's money so why wouldn't the taxpayers have a point if they think that their money is not spent best
Not what I said.
> in the context of the global situation, not really efficient at all in making the quality of life of EU citizens any better?
Why would all decisions have to be this massively efficient slamdunk of an idea? Things can even be downright specifically bad yet still be generally useful in the grand scheme of things. Things can also be just kind of a stinker sometimes. You don't normally skewer something large over a minor issue. Critique is fine, but then "I don't like it" doesn't hold much weight, certainly not more than "well I do".
> would you rather invest that money and time+people resources on something else?
Are the levers I can and am expected to pull on the same as the EU? I don't think so.
> Not what I said.
It's exactly what you were questioning and which is why I gave you the concrete example why people get attached to this particular non-problem.
As for the rest of your comment, I think it went a little bit over your head.
> It's exactly what you were questioning
My remark about most people who bring up Brussels unprompted being rightwing grifters really was just that, and nothing else.
It is not lost on me that like anything, they can and should be critiqued as well.
It's just not really being done, and when it is done, it's usually coming from a place of ulterior motives and ill faith (for now), and so is fairly uncommon. So it's a strange thing to claim that that's what "people think of". No it isn't, not unless you're in the aforementioned circles, which is not the general populace at all.
Ok, I wasn't making a comment about "rightwing grifters" although this is also certainly amenable to discussion but I was rather making a comment on why would some people find it contrary to what you said in your first comment - "It's still hilarious to me how upset people are at this (or at least pretend to be)."
Oh okay, I misunderstood. Could have just replied to my initial comment then to be fair.
I am an EU taxpayer. Caps stay bolted on.
> To paraphrase this differently: if I as an investor gave you 100M EUR and 24 months, would you be happy to spend it for changing a frigging cap on the bottle or would you rather invest that money and time+people resources on something else?
Grifter 101 – “think about what we’d be able to achieve if you did X instead of Y, comrade!”.
It's fine with me if you think that the bottle caps were a worthy move, ok? We are different in the fact that I prefer to discuss objectively with arguments and not using the collective bias as you seem to impose on me without actually knowing anything about me. My mind is open for discussion but probably not suitable for the likes who cannot think out of the box. As for the grifter, I don't think you really understand the meaning of that word.
I guess this is my fault, sorry everyone.
Let me clarify here, cause the editing window for my comment upstream from this has already passed:
> People are upset because it shows Brussels disfunction in a nutshell.
This is what I was reacting to when I said that in my experience people who bring up Brussels like this "are rightwing grifters".
It wasn't in the sense that I was pointing at the person above or anyone else in particular here with this label, but rather, that I was taking an issue with the claim that this kind of thinking (Brussels this, Brussels that) is a people at large thing ("people are upset because"), rather than just something prevalent in those aforementioned circles.
This does sort of imply that I think the person above my comments belongs to those circles, but that really doesn't need to be true, nor was that really my intention to suggest necessarily. I guess this is as good of a lesson for me as any why engaging in labeling (particularly negative one) can be detrimental to discourse, regardless of context. Apologies.
Which is a bad idea because...?
>The big economies of the eurozone have been in constant stagnation for the last 15 years.
Eurozone doesn't know how to manage the economy successfully. The euro has been a failure. We went from somewhat parity with the US in 2006 to lagging quite behind them 20 years later.
> the Euro has been a failure
My bank account disagrees.
I was referring to the caps being attached to bottles part.
Also, a strong currency does not equate to a strong or well-managed economy. (Unless you're Donald Trump.)
If abandoning your own currency and adopting Euros was such a big deal, the UK would have done it decades ago (while it was still a part of the EU).
This benefits the bigger economies, at the expense of the smaller economies. Any fiscal policy is dictated by the bigger countries, and with identical currencies, the only policy left for Bulgarians is to cut wages in public sector. This will impact local economy, and ripple through their society becoming poorer. And the bigger foreign corporations can ransack the place. Brilliant.
I wonder why this comment is at the top of the HN post.
Over the years I've seen a lot of missinformation on this topic that follows pretty much this exact train of thought. Why would countries join the EU and the Euro if it didn't benefit them?
The baltics have all grown massively since the 90s when they became independent, and even though they all were on nice trajectories they still all decided to join the EU and the Euro.
Bringing up the UK as some model for all other "small" european countrie sounds odd. The UK joined the EEC specifically because it had slower economic growth than the other large EU countries.
The UK, and specifically the city of london, with its huge international financial pull has a very different place in the global economy than Bulgaria...
> Why would countries join the EU and the Euro if it didn't benefit them?
Joining benefits the country's elites, rather than its general populace -- and it's these elites who decide whether to join.
Bulgaria joining will weaken the Euro, which benefits big, export-oriented economies such as Germany and France. This is how the Euro has always worked: the big economies dilute their trade surpluses at the cost of smaller European countries.
no proofs, just rephrasing what anti-eu propaganda says. also it is nice how people think they are able to dismiss a policy like the euro in 2 sentences thinking they understand it. probably without a phd in economics either.
> Joining benefits the country's elites, rather than its general populace -- and it's these elites who decide whether to join.
That's bullshit. The decision to join is made via referendum.
And the strong countries export their unemployment to the weak countries.
all the elites like the expats in Spain.
The Bulgarian Lev is already pegged to the euro and was pegged to the DM before
Is that why the lev tonUeor conversion rate is essentially the same ad DM to Euro?
Yes. It's in fact exactly the same conversation rate, down to the last decimal, because back in the day 1 lev = 1 DM.
The UK's nearest neighbour Ireland did. Looking between Britain and Ireland now vs then, you'd definitely want Ireland's rate of growth (ignore GDP, which is massively distorted in Ireland, but look at wage growth) and not the UK's (though realistically the Euro was not a _huge_ factor there either way).
In fact, without the Euro/EMU, Ireland's currency would likely still be tied to Sterling, as it was until 1980. This would be, ah, _not great_, especially at the moment. Clearly, at least in this case, the euro benefited a small country (in particular Ireland was spared the various fiscal shocks that the UK suffered as a result of Brexit and Truss).
Britain is a country with a massive special snowflake syndrome, and wanted opt outs of pretty much everything in the EU (and eventually quit the union itself). Just next door, Ireland adopted the Euro and is doing well.
debt unions never work.