Were we right to join the Euro?

arcadegame2004

Were we right to join the Single Currency, the Euro, in 1999?

I believe so. For the following reasons:

A: It has given us the lowest interest-rates in our entire history (literally).

B: Also, Irish exporters no longer have to worry that a sudden shift in the Irish Punt/French Franc (or Irish Punt/German Deutschmark etc.) will damage exports. e.g. no longer do we need to fear that the Deutschmark falling against the Punt will lead to lower exports to Germany due to it costing more in Deutschmarks to buy something priced in Punts. So our exports to 12 countries are now protected from exchange-rate fluctuations.

C: Despite an initial sharp rise in inflation, out inflation-rate is now under control at 2.3%. In part this is because of the rise in the Euro from $0.82 US cents to US$1.23, which have made imports far cheaper.

D:The rise in Irish export orders to the US shows that the Irish export-sector has adjusted successfully to a strong currency through becoming more efficient.

E:So much more convenient when travelling to 12 other Eurozone states (and likely more in the future) not having to change money and get ripped off by the banks on commission.

thejollyrodger

Ja of course !! we belong in the heart of EUROPE !! The Euro will be good for us over the long term

mike65

As we can't leave really its a non question but I'll say yes anyway. The fiscal apocalypse which the nay-sayers predicted has'nt happened, the surge of inflation was overwhelmingly home grown, the value has risen and stayed strong dispite the US recovery (in fact it was about $1.24 yesterday). Its been shown that Sterling staying out has'nt acted as a drag on our ecomony.

Mike.

Victor

Odd question, that also gives an answer, but yes, we were right to join, but not at the rate we did. Ireland, The Netherlans and Spain joined too low and Germany and probably France joined too high.

The Beer Baron

Surely someone disagrees....
ok I will then.

First of all I hate the notes and I really, really hate the coinage- let me say that 1st.
Now I'm no economist, hell I'm always broke- I wasn't so broke during the glory days of the punt as I am since the Euro- Euro ain't worth ****- I don't mean in terms of other currencies, I don't care about other currencies unless I've to go to other countries but I can't afford to because I'm always broke.

Since the Euro came ppl decided they can charge what the like. The price of everything has risen to ridiculous levels... isn't there a ripoff ireland forum, maybe I should go over there- seriously though, wtf! The euro has brought me nothing but grief, I hate it I hate it I hate it- and nothing is being done to stem the madness that is ever increasing prices- I mean, the euro could be good for us, if we didn't **** ourselves over pricewise- my girlfriend works in tourism, she's seen a serious decline in ppl coming over here from europe- the reason? Too expensive- Americans too, who wants to go to rainy old rip-off Ireland when you get rain and green hills and quaint indiginous drunkards far cheaper in Scotland?

Victor

Originally posted by The Beer Baron
First of all I hate the notes and I really, really hate the coinage- let me say that 1st.

97% of transactions are cashless (figure touted at the time) - design of notes and coins is a whole different matter.

simu

I think it's great.

It makes travelling abroad and buying on-line so much easier!

You can't blame the euro for "rip off Ireland" either - the introduction of the euro just showed up more clearly the fact that we get charged more for things in this country and what's worse, are willing to put up with it. Besides, if you plan ahead, you can avoid getting ripped off in many instances.

The Corinthian

Originally posted by The Beer Baron
The price of everything has risen to ridiculous levels...

One can safely demonstrate a relationship between average traffic speed decreasing and an increase in the rate of traffic accidents. It would be logical from this to extrapolate that driving more slowly is going to increase the risk of road accidents. Of course, if we add in a third piece of information - ice on the roads - we can see the true cause for the first two.

The point of that example is that correlation does not imply causation. That there was a perceived price hike that overlapped with the introduction of the Euro is not in doubt, but to say that the former was as a result of the latter is a pretty moronic jump to conclusion. It’s quite conceivable that the introduction of the Euro contributed, but the more obvious factors such as the lasting effects of both the Celtic Tiger and housing boom, combined with the start of recession are far more likely to have been principle determinants.

For a start the rate of inflation only increased by 0.3%, to 5.4%, in 2002 when the Euro was introduced (the lowest increase since 1999) - however, as the Celtic Tiger was beginning to slow down, wage increases dropped substantially at the same time, from 5.8% to 4.3%. So with an increase in prices on one hand and a decrease in our purchasing power on the other, is it a surprise that we all started to feel the pinch?

Of course, that’s just another hypothesis, and certainly some prices - most notably in the leisure industry (pubs, restaurants, etc.) - were rounded or even hiked up, but as hypothesises go it’s little more substantial than the one that claims that it was the Euro’s fault.

The Beer Baron

Of course, that’s just another hypothesis, and certainly some prices - most notably in the leisure industry (pubs, restaurants, etc.)

they're the worst offenders yes.

What happened is it became a chance to take advantage of people's confusion whilst we were all flustered and squinting down at our euro calculators and then after the transaction we're going- now wait a minute...

I've been going now wait a minute ever since.
Perhaps other ppl's viewpoints are because they're somewhat more affluent and don't notice it- things don't seem to have a value anymore. Things seem to growing ever more expensive by the day- of course it's been happening since b4 the euro, but it seems to have increased in frequency and the gradient of the price hikes have been steeper- not being an economist I'll dismiss a lot of what some of you off hand as number-babble. See this is my opinion- I happen to be one of the ppl who aren't financially savvy, aren't economically viable and find it all very confusing as arithmetic is hardly my forte- if anything I'm mathamatically illiterate so you may be right.

The fact is, ppl did take advantage and a lot of ppl did take the piss. If enough ppl put up the price of things it becomes the norm- be it the local small shop, be it the Centras and Super Values or the Tescos... they're all doing it, man. Money is like water- what's a €50 note worth- sweet **** all. What's €100 worth- sweet **** all x2. The Euro doesn't feel like money to me, even now, they're meaningless little tokens, worthless paper- might as well have a wheelbarrow full of Weimer Republic Marks for all they're worth

---

>

my opinon, I'm just giving it- I'm certain more will disagree than agree with me.

Capt'n Midnight

Have to agree that that we went in at the wrong level and that some people knew about it and made a killing on exchange rates.

As for inflation - it's like the changes in VAT rates and Taxes the retaillers, rip off ireland is what is causing it most likely would have happened anyway. Greed is greed , but at least now internauts can cut out the middle man. Still movement of goods and services is not as free as you would like, as this improves the usefullness of the Euro will increase.

One option would have been to link back into sterling but then again you can't spend Irish notes in London.

At one stage the Euro and the Dollar were near parity and they were both worth 100Yen - so we could have had a Western currency. pipedream really. US uses the value of the $ to rip off entire countries ..

mike65

Originally posted by The Beer Baron


Things seem to growing ever more expensive by the day- of course it's been happening since b4 the euro, but it seems to have increased in frequency and the gradient of the price hikes have been steeper- not being an economist I'll dismiss a lot of what some of you off hand as number-babble.

The unit value of the euro is about 20% less than the Irish Pound so steeper hikes are logical.

As for Weimar Republic er steady on inflation is 2% in the euro zone. Wheelbarrows were required in Italy before the Euro!

Mike.

The Corinthian

Originally posted by The Beer Baron
See this is my opinion- I happen to be one of the ppl who aren't financially savvy, aren't economically viable and find it all very confusing as arithmetic is hardly my forte- if anything I'm mathamatically illiterate so you may be right.

Then logically you should admit that you don’t know enough to form an opinion rather than jump to a conclusion because of an inexplicable fuzzy feeling (after all, your principle argument relies heavily on things seeming to be something as opposed to anything more concrete).

Originally posted by mike65
Wheelbarrows were required in Italy before the Euro!

Ironically the other way around - The Italian Lira was overwhelmingly note driven (the smallest note was the L. 1,000 note - worth approx. 50 cent). As a result, when the Euro was introduced Italians had to get used to carrying around a lot more change. Pocket linings naturally suffered as a result.

Victor

Of course the effect of the reduction of interest rates following the introduction of the euro made credit excessively cheap, thereby furhter fuelling the housing bubble.

This in itself would not have been a reason for not joining the euro - the government should simply have shifted fiscal policy (increased VAT on construction to standard rate, reduced mortgage interest relief, property taxes, etc.)

Capt'n Midnight

Originally posted by The Corinthian
Ironically the other way around - The Italian Lira was overwhelmingly note driven (the smallest note was the L. 1,000 note - worth approx. 50 cent). As a result, when the Euro was introduced Italians had to get used to carrying around a lot more change. Pocket linings naturally suffered as a result.

1000 lira was worth about 40p in old money. But there is a campaign there to get 1 and 2 euro coins replaced by notes - it's like when the pound coin came in here - people spend coins like they were shrapnel , where as notes get a bit more respect.

mike65

Originally posted by Capt'n Midnight
But there is a campaign there to get 1 and 2 euro coins replaced by notes - it's like when the pound coin came in here - people spend coins like they were shrapnel , where as notes get a bit more respect.

The best thing to do with 1 and 2 cent units is too simply put them out of our misery! I belive Finland does'nt use them. Of course it would mean the ending of the oh so sensible 99/49c pricing policy so beloved of retailers and that would be such a shame.....NOT!

Mike.

SkepticOne

The main issue is that interest rates are now set by the ECB according to overall EU needs and this means according to trends in countries with large economies. Ireland's inflation rate will not influence the ECB but the demographics of, say, Germany will.

This may be bad for Ireland in the long run if the economy goes out of sync. with the mainstream EU. Some countries may experience exagerated boom and bust periods if the governments of those countries can't control demand by other means.

Right now, I believe it is being recommended that the additional incentives be given to SSIA holders so that a spending spree doesn't cause inflation and potentially erode competitiveness. The normal course of action here would be to increase interest rates.

dloob

It's handy for the holidays.
But the lack of control over interest rates is a concern.
What happens in Ireland won't worry the ECB too much.
House prices have probably been driven up by the low interest rates.
If rate increases by the ECB sent the market down don't expect the ECB to cut rates to stabalise the Irish housing market.

Of course geiven the mess Germany and France are in I won't expect rate increases too soon.

mike65

A rate rise is expected before the years end amazingly as the ECB is obsessed with inflation of more than 2%.
They should be more concerned with the French and German ecomonies.

Mike.

Capt'n Midnight

Don't forget the rise in lending especially to home buyers . This accounts for most of the lending to individuals. In a lot of cases the banks did not folllow their own rules with the fixed multipliers of first and second wages. If the banks were made to do this then you could regulate the amount of money in the economy by changing the credit rules. not just the multipliers eg: you could change the rules on repossesion of a family home (where stringent rules exist to prevent people welching) this would reduce the flow of money (to very rich people via) home buyers.

OK the ECB might not have our best interests at hand - but has local fiscal policy ever been for the benefit of the majority of people in this country, an example would be the growing gap between rich and very poor ...

The Beer Baron

Then logically you should admit that you don’t know enough to form an opinion rather than jump to a conclusion because of an inexplicable fuzzy feeling (after all, your principle argument relies heavily on things seeming to be something as opposed to anything more concrete).

The fact that I'm spending more and more money on the same items is very concrete.

The fact that I, and no doubt millions of other Irish people like me, feel ripped off since the advent of the Euro is concrete.

The fact that things have risen more and more and the value of items seem less and less is concrete.

The fact that, essentially, the Euro became a clean slate for people to charge whatever the hell they want is concrete.

The fact we're getting ripped off is concrete.

You want to talk concrete I'm sure I could dig up all sorts of statistics about rising house prices and that sorta thing- please don't make me do that as It'd bore me to tears and I'm not that great at pouring concrete.

I did say that's only my opinion, but it's an opinion shared by a lot of people who feel ripped off since the advent of the euro. So by dismissing my sentiments you're dismissing those of millions of others who share those sentiments and instead you're rattling off statistics.
Ignoring the concerns of millions of Irish people and rattling off statistics, jesus ****, you should be in fianna fáil! :rolleyes:

Look I don't want to jump down your throat (I'm just making an example of you in case other statistic-toting posters who think they've the right to dismiss me off hand) I'm not saying I'm right about everything, if I was the world would be a very scary place indeed.
I'm not saying you're wrong either, I'm merely expressing my feelings on the matter.
Do you think we were right to join the euro, I say nay.

Now indeed you're more than likely correct on your earlier statement on inflation, decline of Celtic Tiger, etc, etc. I can't argue on that because I'm no economic expert so I'll give you the benifit of doubt and say, ok, fair enough.
Although I do know I'm right when I say we're getting ripped off more than we were pre-euro. When I say too many people have taken advantage of things pricewise, when I say, whatever about the value of the euro versus the punt, the pound, the almighty dolla the yen the lira and the weimar mark-yer average joe on the street doesn't care about that, they care about "where's all my money going, why is the cost of things skyrocketing whilst the value of things plummet, who's making their money at my expense" whilst we look out and see the fatcats, and the politicians and the gap-toothed finance ministers rattling off statistics rather than actually hold a coherant debate with the opposition.
This broad feeling throughout the country, across the entire Irish spectrum that we're being taken to the ****ing cleaners and that our groceries, our milk and our bread and butter seem to be costing a lot more than they did last week, last month, last year. And I hold the euro partially responsible for that. That's not a fuzzy feeling, that's a very strong feeling and it's rampant in this country right now.

The Corinthian

Originally posted by The Beer Baron
The fact that I'm spending more and more money on the same items is very concrete.

The fact that I, and no doubt millions of other Irish people like me, feel ripped off since the advent of the Euro is concrete.

The fact that things have risen more and more and the value of items seem less and less is concrete.

The fact that, essentially, the Euro became a clean slate for people to charge whatever the hell they want is concrete.

The fact we're getting ripped off is concrete. .

How about this... why don’t you read over my post where I said that correlation does not imply causation – that, just because you’re getting ripped off, you’re not presenting any proof that it has anything to do with the Euro. Will you do that? Good. Then take a deep breath.

I did say that's only my opinion, but it's an opinion shared by a lot of people who feel ripped off since the advent of the euro. So by dismissing my sentiments you're dismissing those of millions of others who share those sentiments and instead you're rattling off statistics. .

Millions of other? Another statistic pulled out of your ass, I see. So if the mob tells you it’s true, it must be?

Look, all you’ve come up with is a warm fuzzy feeling that it’s the Euro’s fault. That’s all. I wouldn’t mind, except you’ve not even tried to come up with a rational theory how it’s all the Euro’s fault, beyond it being peoples broad feelings.

In short, just because you feel something, does not make it true.

Come back when you want to talk evidence, not hysteria.

BUMP!

This broad feeling throughout the country, across the entire Irish spectrum that we're being taken to the ****ing cleaners and that our groceries, our milk and our bread and butter seem to be costing a lot more than they did last week, last month, last year.

You don't need too many statistics to know that this is true - the euro may not have caused this but it does make ever easier for retailers to increase their prices because peoples perception is that they wont bother shopping around for the sake of a measly few cent's. Cents quickly turn into euro's!

In short, just because you feel something, does not make it true.

Tell that to the Italians - although I could quite easily be mistaken here (or confused) - wasn't there uproar in Italy as in going from the ??Lira?? to the euro many prices doubled and there were massive increases (initially at the least) so that they could round off prices.

In short: its greed coming from the top down that is causing the hikes - the euro just seems to facilitate it.

ecksor

Originally posted by BUMP!
Tell that to the Italians

Yeah Mr Italian man, tell it to the Italians.

The Beer Baron

How about this... why don’t you read over my post where I said that correlation does not imply causation – that, just because you’re getting ripped off, you’re not presenting any proof that it has anything to do with the Euro.

The proof is in every shop you go into.
Does someone do your shopping or something? It would explain a lot.

There's a severe disparity in pricing between one shop and the other, from one region to the other, same product- prices seem to have been made up out of thin air. Obviously you've never been asked to pay €6 something for a sandwich that consisted of a breadroll, some cheese and some butter. (Obviously I told them to go **** themselves and never went back again)
What's that in punts about £4.70 or thereabouts. Would they have had the gall to ask that much pre Euro? Now they bloody well wouldn't. So global and national economics aside, correlations and causations aside, and with inflation taken into account- pre Euro nobody would ever dream of paying that much money for that little sandwich even in the midst of an "economic downturn".

My point is clear- traders have, and continue to, take advantage of the Euro in order to charge more. The government aren't much better. We went into the thing blindly, with ****ty little calculators and westlife telling us how much our money would now be worth. I remember it clearly, especially since a lot of us had our left pocket filled with punts and our right with euros and no bloody idea what the hell was going on. And it only got worse.

Will you do that? Good. Then take a deep breath.

I could hold my breath and stomp my feet for the amount of good it's going to do.
Euro = pricehikes and a licence to rip off the general populous.
But since you make comments like this...

Millions of other? Another statistic pulled out of your ass, I see.

Almost everyone I have talked to in the last few years has, at one point or another, bitched about the post-euro pricehikes. You turn on the TV, you read the newspapers, magazines, on the radio...
Or how's about actually listening to people instead of burying your head in the sand and dismissing my point of view as one would scoff at a small child.

Look, all you’ve come up with is a warm fuzzy feeling that it’s the Euro’s fault. That’s all. I wouldn’t mind, except you’ve not even tried to come up with a rational theory how it’s all the Euro’s fault, beyond it being peoples broad feelings.

Because prices were raised dramatically to take advantage of the changeover, the Euro didn't cause the problem, but it gave the green flag for traders to do as they damn well pleased- of course it did!
We both know, or at least should know, that the prevailing consensus among Irish people today is that WE ARE GETTING RIPPED OFF. And it's anything but a warm fuzzy feeling.

In short, just because you feel something, does not make it true.

Just because I can't point at a statistic and say "this is this" doesn't necessarily mean it's untrue. Statistics can be used to proove anything and I don't hold them in high regard. tbh I think they're used to "proove" more fallacies than realities. Which is why the likes of Fianna Fáil are so quick to use them and why I consider them the last refuge of a scoundrel.
See life isn't about that- life, you'll find, is more to do with *feelings* than figures and formulas. I can feel something and know it to be true. Of course I can. It's called being human.

If enough people feel something it carries a lot more weight than what you can argue on a bulletin board. Although you've a considerable advantage over me in the fact that your argument is based upon the fact that I can't "proove" what I'm saying. I could, outside, in the real world, in the world of €6 sandwiches but I'm at a loss in here because I can't walk you through the streets and have an impromptu voxbox session, "do you feel ripped off in post-euro Ireland?" the answer will invariably be a resounding YES. Then I can look you straight in the eye and say, "see! cop the **** on like!"

All you're saying over and over is proove this, proove that. I could scan some of my reciepts, you could go on xe.com but that's not the way I want to do it. Indeed I don't even see why they are even necessary. As I said, my points are based upon the feelings of people in the outside world which is fair enough- your advantage because I can't proove this to you, but then again I shouldn't need to because it's just so damn obvious I find the fact you can't see it somewhat strange and I dare say dubious. Are you so keen on this little victory that you'd rather turn your back on the general consensus just to spite me?

Ideally I want you to actually see the light and proclaim, "yes we have been ripped off and continue to be ripped off - and horrendously so!" I can't do that, all I get is obstinance and veiled insults that mask a severe superiority complex, one which I'm sure obscures your view of the world in general.
It leaves me wondering is this how you would be to all those people out there who, like me, or in many cases are worse off than me, and are struggling to make ends meet, who are being overcharged and undervalued, would you meet them with the same arrogance and dismissiveness? Would you deem their existence inadmissible as evidence? Inadmissible in general?
That seems to be the message you're giving.

So please tell me that isn't so- I'll take it is a no and I promise I won't demand proof.

netwhizkid

Were we right to join the € ?

Well in my opinion, we were, as its lets us compare price to our continental cousins and shows up how much were being ripped off over, only downside it did give the retailers a once in a life-time oppurtunity to hike the prices without many people noticing. Only problem is when will the United kingdom join ? Tony Blair is about the only guy who might surrender the pound, as of for the rest I.e Tories, liberal democrats, UKIP they would go to war with the e.u to stop the euro being introduced, If the U.k did join it would be another step in harmonising thing with Northern Ireland, and might be a catalyst of sharing i.e same money on both sides of the border, that might lead to shared rule and eventually perhaps someday a United Ireland.

Oh by the way, arcadegame2004 you should have made this a poll to the figures add up,

Regards netwhizkid

*my first milestone, my 100th post.

AngelofFire

I go to Italy on a regular basis and i have saved a fortune since the euro came in. I no longer have to worry about having to change my money or commission.

mike65

Originally posted by netwhizkid
Were we right to join the € ?

Tony Blair is about the only guy who might surrender the pound, as of for the rest I.e Tories, liberal democrats, UKIP they would go to war with the e.u to stop the euro being introduced

The Lib Dems are pro Euro and have been since day one.


Mike.

The Corinthian

Originally posted by The Beer Baron
There's a severe disparity in pricing between one shop and the other, from one region to the other, same product- prices seem to have been made up out of thin air. Obviously you've never been asked to pay €6 something for a sandwich that consisted of a breadroll, some cheese and some butter. (Obviously I told them to go **** themselves and never went back again)
What's that in punts about £4.70 or thereabouts. Would they have had the gall to ask that much pre Euro? Now they bloody well wouldn't. So global and national economics aside, correlations and causations aside, and with inflation taken into account- pre Euro nobody would ever dream of paying that much money for that little sandwich even in the midst of an "economic downturn".

Even pre-Euro, we were already seeing such disparities - in particular in pubs where a pint could cost 50% more in one pub, than it did in another down the road. So, that may be evidence that some retail outlets are trying to rip people off, but certainly not evidence that it is related to the Euro.

My point is clear- traders have, and continue to, take advantage of the Euro in order to charge more.

What is this magic quality of the currency (that the old Punt did not possess) that allows this to happen then?

Almost everyone I have talked to in the last few years has, at one point or another, bitched about the post-euro pricehikes. You turn on the TV, you read the newspapers, magazines, on the radio...
Or how's about actually listening to people instead of burying your head in the sand and dismissing my point of view as one would scoff at a small child.

Since you’re complaining about others listening or not, you might do so yourself. I’ve not at any stage denied that there have been any price hikes, or even that the Euro may have been one of the factors that contributed to them. However, I have already pointed out that blaming the Euro as the principle cause for price inflation, two and a half years after the changeover, is quite hysterical.

I have from the onset pointed out that correlation does not imply causation, I even gave an example to explain this principle. You on the other hand have continued to whine about price rip-offs and then you jump to the conclusion that the Euro is the cause. I’m still waiting to see how you come about to this conclusion - where is your evidence (even a hypothesis would be a start)?

Just because I can't point at a statistic and say "this is this" doesn't necessarily mean it's untrue.

There’s a big difference between saying that is “doesn't necessarily mean it's untrue” and your claiming that it is true.

Statistics can be used to proove anything and I don't hold them in high regard.

Problem is, you’re not even presented a theory on why the current price hikes are all to do with the Euro, let alone statistics. So far all you’ve presented is the existence of price hikes (as a fact) and then assumed that it is due to the Euro (also stated as a fact).

tbh I think they're used to "proove" more fallacies than realities.

LOL. Cogito ergo est

See life isn't about that- life, you'll find, is more to do with *feelings* than figures and formulas. I can feel something and know it to be true. Of course I can. It's called being human.

As Oscar Wilde once wrote, “a thing is not necessarily true because a man dies for it”. In your tear jerking description of humanity, you seem to forget that we are set apart from the rest of the animal kingdom not by our capacity to feel, but our capacity to reason.

If enough people feel something it carries a lot more weight than what you can argue on a bulletin board.

Indeed. That’s called a mob.

Are you so keen on this little victory that you'd rather turn your back on the general consensus just to spite me?

What you are now feeling is paranoia.

So please tell me that isn't so- I'll take it is a no and I promise I won't demand proof.

Why don’t you go read my first post in this thread again?

The Beer Baron

Can we agree, without me spending half the day digging up statistics, that retailers have taken advantage of the avent of Euro to raise prices?

If we agree on that then maybe we're getting somewhere.

Of course there's been gougers before in the Punt days.
It's part of the Irish cowboy mentality to rip people off, to offer poorer service than the majority of other countries but charge more- we're agreed that this has been going on before the Euro came into use.

I see yer still on this causation trip.
Let's just call the Euro a catylyst in these price-hikes because it is.
The Euro isn't the cause, it's the excuse to raise prices higher and higher.

As for disparities, yes, price of a pint in Dublin in 1999, for example, versus the same pint "down the country" as the dubs would say. And this would also vary considering what time of the night it was, in certain pubs. Then again that's pretty much been the norm for as long as I can remember.

I think, somewhere, deep down, you partly agree with what I'm saying- just you don't like my way of conveying it. No doubt you also find me evasive but I can't really furnish you with the proof you need as it's an abstract subject, or it is to my mind, not something I can measure but you can see it all around you.

right then.
/me gets all causalitical :ninja:

One theory I can throw your way, and one that once again I can't proove to you other than making you see it through my own eyes, is that, retailer a decides, that after the Euro comes in he/she/they decide to lets say round the price of X up to the nearest ten, so what would be say, 3.24 now becomes 3.30, then retailer b decides to follow suit. Retailer c decides to make some more money so they make it 3.35.
Now the wholesaler is also thinking along the same lines, so they raise the wholesale price, retailers now raise the price up to cover that, realise that, considering their original formula they've got another uneven number, now the same item's 3.50, retailer a & b charge 3.50, retailer c -3.55, within a week or a month it's 3.60, raising these prices escalates without having anything to do with inflation. With inflation they rethink the price again- now it's 3.80, retailer C, always forging ahead say, **** it, we'll charge 3.85, then later, 3.90, 3.90? Naah! Let's make it a nice even €4.

That's a seventy six cent increase right there, so let's say each item bought has now been increased by an average of 50-70c, say you're doing your shopping and buying a week's groceries, say 20 items in the basket. That's between €10 to €14 euro extra you're paying in the space of a week. I have noticed these increases in prices quite regularly since the Euro came in. In the days of pennies and pounds they weren't so frequent as they would have been more noticible.

Since the Euro, of course, the base price as set by govenment, regulating bodies, etc, etc- they're in on it too, I don't really think it's economic inflation as much as opportunistic assholes at every level out to make a fast buck at the expense of those who can't really afford it.

Inflation itself, of course, has been used as a means to raise prices higher, which in and of itself is ok, because they have to make money, but they are using it in a cynical way.
"The price of the pint's gone up."
"Yes by 5cent. So why are you charging ten cent more?"
And why? Because they want to round it up by 5 cent, one cent being the price it had to be raised, but 1c is such a horribly uneven number.
Besides, who likes the 1c coin? Nobody.

And that's another point, nothing to do with economics at all, which I think is also a factor- the physical nature of the Euro coinage itself. Before we could instinctivly put our hands in our pockets and know how much we had, the change that's in our pockets now is tinny, small- monopoly money, as I've heard many people desribe it. Because it doesn't feel like money to me, oh it does the same thing as money but to the stubborn Irish mindset, mine included, it's not real money. It's just a load of small, light, wafer thin buttons of cheap metal. Naturally when we had this money it kind of set the tone, hey, this isn't the same as what we had before, compare the Euro coin to a Punt one, the Punt's more substansial, so naturally, we feel like, oh this Euro-dohickey's worth a hellova lot less so it's no wonder this guy wants a hellova lot more of them. There's a subtle psychology involved where the shrewd mofo's had twigged this a lot earlier than most of us and by the time we realised it was too late- the damage were done and the prices fixed.

I'm a penny counter, my mother was always frugal and so that was the way I was brought up- because a couple of pennies could make all the difference. The cent, however, is so small and insignificant, from a physical standpoint, that people don't want to even have them. They're a menace, they're a pain in the ass. I think that was the thing that struck me the most about the coinage- our old coins were big and clunky, they held a value partly for that reason, now it's not the case. So retailers, they don't want to deal with anything less than a ten cent, or at the least, a five cent coin. (somebody also mentioned here that the euro spelt the end for the £3.99 marketing ploy) so they round up the prices to the nearest 5 or ten just because of those ****ty little pennies- it sounds a little petty, but it makes sense. Who wants to be taking rolls of pennies to the bank like?

Ok, I'm by no means finished but two theories for you to chew on until I come back after my "weekend" off.

The Corinthian

Originally posted by The Beer Baron
Can we agree, without me spending half the day digging up statistics, that retailers have taken advantage of the avent of Euro to raise prices?

Agree? I have from my first post accepted that “some prices” were hiked up as a direct result. But to blame the Euro for price inflation two and a half years after it’s advent is hysterical to say the least.

I see yer still on this causation trip.

No, it’s called logic. Give it a try.

Let's just call the Euro a catylyst in these price-hikes because it is.

It’s true because it just is? Are you on drugs? Seriously, do you expect me to take your word for it because you ‘feel’ it?

The Euro isn't the cause, it's the excuse to raise prices higher and higher.

How is it the excuse two and a half years later? And what about all the other excuses? Such as the salary level having increased and people having more money than sense, for example?

I think, somewhere, deep down, you partly agree with what I'm saying- just you don't like my way of conveying it. No doubt you also find me evasive but I can't really furnish you with the proof you need as it's an abstract subject, or it is to my mind, not something I can measure but you can see it all around you.

No, what I don’t like is that you’re pulling an idea out of your ass, saying it’s true just “because it is” and then getting indignant when someone points out that you don’t have a clue about what you’re talking about. You’ve even gone so far as to argue that just because you feel something, it’s good enough evidence for you. Horseshit, it just means you don’t have a clue and refuse to admit it.

One theory I can throw your way, and one that once again I can't proove to you other than making you see it through my own eyes, is that, retailer a decides, that after the Euro comes in he/she/they decide to lets say round the price of X up to the nearest ten, so what would be say, 3.24 now becomes 3.30, then retailer b decides to follow suit. Retailer c decides to make some more money so they make it 3.35.

Now the wholesaler is also thinking along the same lines, so they raise the wholesale price, retailers now raise the price up to cover that, realise that, considering their original formula they've got another uneven number, now the same item's 3.50, retailer a & b charge 3.50, retailer c -3.55, within a week or a month it's 3.60, raising these prices escalates without having anything to do with inflation. With inflation they rethink the price again- now it's 3.80, retailer C, always forging ahead say, **** it, we'll charge 3.85, then later, 3.90, 3.90? Naah! Let's make it a nice even €4.

That might explain a short-term jump in prices in the first six months of 2002, not the rip-off culture you’ve been saying is down to the Euro, in mid-2004. And if inflation was snowballing as a result of the Euro’s introduction, how come it was higher before it’s introduction than it was after?

Since the Euro, of course, the base price as set by govenment, regulating bodies, etc, etc- they're in on it too, I don't really think it's economic inflation as much as opportunistic assholes at every level out to make a fast buck at the expense of those who can't really afford it.

Again, you’re still talking about price opportunism, claiming that it’s the Euro’s entire fault. The main reason you get price hikes is not because they’re obscured by a currency changeover, but because there’s lots of gimps out there with more money than sense.

You have completely failed to explain how it is the Euro as opposed to anything else that has caused price hikes two and a half years on, despite my having raised this point repeatedly.

Inflation itself, of course, has been used as a means to raise prices higher, which in and of itself is ok, because they have to make money, but they are using it in a cynical way.

Inflation is the measure of that increase in prices.

"The price of the pint's gone up."
"Yes by 5cent. So why are you charging ten cent more?"
And why? Because they want to round it up by 5 cent, one cent being the price it had to be raised, but 1c is such a horribly uneven number.
Besides, who likes the 1c coin? Nobody.

And who was raising prices by 1p in 2000? Nobody - they raised them by 5p.

As for the price of the pint, the average industrial weekly wage could buy you 142 pints in 1994, today it’ll buy you 150 - how’s that for being worse off?

And that's another point, nothing to do with economics at all, which I think is also a factor- the physical nature of the Euro coinage itself. Before we could instinctivly put our hands in our pockets and know how much we had, the change that's in our pockets now is tinny, small- monopoly money, as I've heard many people desribe it. Because it doesn't feel like money to me, oh it does the same thing as money but to the stubborn Irish mindset, mine included, it's not real money. It's just a load of small, light, wafer thin buttons of cheap metal. Naturally when we had this money it kind of set the tone, hey, this isn't the same as what we had before, compare the Euro coin to a Punt one, the Punt's more substansial, so naturally, we feel like, oh this Euro-dohickey's worth a hellova lot less so it's no wonder this guy wants a hellova lot more of them. There's a subtle psychology involved where the shrewd mofo's had twigged this a lot earlier than most of us and by the time we realised it was too late- the damage were done and the prices fixed.

I suspect this is your real reasoning - you just don’t like the currency. Maybe it’s an aesthetic thing, maybe it’s a question of perceived lost sovranity, or maybe you just don’t take well to change. So you construct economic reasons, based upon these ‘feelings’, to justify why you don’t like the Euro. It’s like a Klansman who hates blacks first and then goes to find a pseudoscientific justification to hate them.

Had you considered the possibility that there are other reasons for the price increases in the last few years or have you been too caught up in your dislike of the Euro to consider that possibility?

Ok, I'm by no means finished but two theories for you to chew on until I come back after my "weekend" off.

What two theories? The first was full of holes and the second wasn’t even a theory; it was a rant.



Edit: 2 typos.

mike65

He!

I dont think BB is ever going to quite "get it". Currencies do not cause inflation - people do.

Mike.

BUMP!

Heated debate eh?????

How about this ye'r both half right!!!! I'd tell ye why but I'm going home.....:D

Wacker

Having small coins is a great thing. Really it is. The smaller, the better. Know why, anyone? Because it isn't free to mine all that metal used in virtually worthless coins! So use less of it. D'uh.

BUMP!

????Where did that come out of????

If you dont like coins - get a credit card! Whatever the reason - it still looks like monopoly money!! ... worth about as much too!!

The Corinthian

Originally posted by BUMP!
Whatever the reason - it still looks like monopoly money!! ...

I remember the same thing being said when we changed all the Punt to smaller banknotes in the mid 90's.

worth about as much too!!

Another well thought out argument... :rolleyes:

The Beer Baron

my head -> brick wall.

It's bad enough you consider yourself pragmatic in the face of evident truth and essentially flaunt your appauling lack of reality. But then you come out with something like this:

It’s like a Klansman who hates blacks first and then goes to find a pseudoscientific justification to hate them.

That's a nice analogy corinthian, really, very pretty.
Obviously you know that would really, really piss me right off or you wouldn't have said it.

...Arrogant, belligerant, tactless and still finding the time to be self-rightious! How do you do it? You truly are a Renaissance man!

I'd understand if you just came back with more of the above, that's what I was expecting- but since you're trying to draw me out and make me mad I must concede. This is because I know I'm on thin ice in this forum and any further conversation with you would inevitibly involve me loosing the plot- in this instance my sig says it all.

So although I don't wish the further inflation of your own ego on anyone else
I'll bow out rather than risk rage-induced bannination. This I do not because I can't address what you've said, but because I can't begin to resume this little debate without feeling sick to my stomach.

none the less enjoy your little victory ****, all I got is the poor consolation of doing the following.

/ignored.

The Corinthian

Someone's decided he's rather flip over the draughts board and storm off, I see...

SkepticOne

Capt'n Midnight wrote:

Don't forget the rise in lending especially to home buyers . This accounts for most of the lending to individuals. In a lot of cases the banks did not folllow their own rules with the fixed multipliers of first and second wages. If the banks were made to do this then you could regulate the amount of money in the economy by changing the credit rules. not just the multipliers eg: you could change the rules on repossesion of a family home (where stringent rules exist to prevent people welching) this would reduce the flow of money (to very rich people via) home buyers.

Although this should be done, it would be politically unpopular, imho. When the rules are first introduced (before house prices have fallen) FTB's would complain that they could no longer borrow enough to purchase houses and it's the Government's fault. When house prices do fall, established home owners would then complain. No one likes to see a drop in their own asset values.

The problem is that once monetary measures are moved to the EU level, local fiscal measures are down to whatever Government is in charge. The temptation would then be to loosen up policy prior to an election and tighen afterwards, thus leading to a boom and bust situation.

Whatever the problems of a local independent central bank, boom and bust tends to be less than when the politicians are in charge.

Lennoxschips

The big Euro economies (France, Spain, Germany, Italy) were sluggish between 1999 and 2002, so the ECB decided to lower interest rates to make borrowing easier to try and stimulate the economy. They didn't take the smaller economies, like Ireland's, into account, because we are statistically insiginificant. Our Celtic Tiger economy didn't even get on their radar. So, our economy, which was already in danger of overheating, was flooded with cheap money from low interest rates, and things prices sky rocketed. A similar effect happened in The Netherlands and Belgium, who also had roaring economies when the Euro came in. They have now also seen record inflation. This one size fits all approach to interest rates has meant that smaller countries like Ireland, Holland and Belgium have been made to suffer.

arcadegame2004

Lennoxschips wrote:

The big Euro economies (France, Spain, Germany, Italy) were sluggish between 1999 and 2002, so the ECB decided to lower interest rates to make borrowing easier to try and stimulate the economy. They didn't take the smaller economies, like Ireland's, into account, because we are statistically insiginificant. Our Celtic Tiger economy didn't even get on their radar. So, our economy, which was already in danger of overheating, was flooded with cheap money from low interest rates, and things prices sky rocketed. A similar effect happened in The Netherlands and Belgium, who also had roaring economies when the Euro came in. They have now also seen record inflation. This one size fits all approach to interest rates has meant that smaller countries like Ireland, Holland and Belgium have been made to suffer.

Statistical evidence is that inflation in Ireland peaked around late 2000-early 2001 at 5%-7%. Since then it has fallen drastically to 2.4%. So inflation has actually come down substantially since the introduction of the notes and coins. In an economy that was growing at 11% per year it was only a matter of time before inflation was going to kick in in a big way. The fact that 1 Irish Pound equals 1.27 Euro automatically made it look like prices had risen dramatically overnight. Lack of competition in the Irish economy is a bigger culprit for rip-offs in this country (e.g. Electricity market, gas market, public-transport, insurance-market) than the Euro in my opinion. I concede that when the Euro was weak, that the increased costs this placed on imports from the US and the UK contributed to inflation, but the way of avoiding that of course would be for Irish companies to import more from the Eurozone instead of the US and UK. Now that the Euro is strong, imports are cheaper and this has been a contributory factor to the lower inflation-rate.

That said, I accept that in SOME parts of the economy there are rip-offs taking place.

Lennoxschips

. In an economy that was growing at 11% per year it was only a matter of time before inflation was going to kick in in a big way.

Yes, but this is usually countered by raising interest rates to combat inflation. We didn't have the power to do this. As it was we had interest rates set at German and French levels, levels for economies that needed a boost, when our economy was in danger overheating. This was a recipe for disaster.

That inflation rates are now normal is because our economy has come down to French and German growth levels. But the damage has been done, we are the most expensive country in the Euro zone. And the next time our economy takes off we won't be able to control it because we'll have no power over our own interest rates.

So inflation has actually come down substantially since the introduction of the notes and coins.

Notes and coins have nothing to do with anything. We have been a part of the Euro and, crucially, have had our interest rate set by the ECB in Frankfurt since January 1999.

The Corinthian

Lennoxschips wrote:

And the next time our economy takes off we won't be able to control it because we'll have no power over our own interest rates.

Monetary policy is not the only way to encourage inflation. Arguably it’s not even the best way.

Notes and coins have nothing to do with anything. We have been a part of the Euro and, crucially, have had our interest rate set by the ECB in Frankfurt since January 1999.

A good point. Try getting people to understand that though.