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Re: Euro go-ahead

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  • Paul Guzowski
    Martin, Ron, et al.... There s an old saying that Perceptions can be reality but in the case of the change to the Euro, perceptions are just perceptions.
    Message 1 of 18 , May 3, 2008
      Martin, Ron, et al....

      There's an old saying that "Perceptions can be reality" but in the case of
      the change to the Euro, perceptions are just perceptions. When I was
      recently working in Central and Eastern Europe for six years, my boss used
      to say, "Everyone is entitled to his own opinion but no one is entitled to
      his own facts." Thank you, Martin, for providing the facts regarding what
      really happened to prices in other countries when the Euro was introduced. I
      personally observed the same kind of perception-driven predictions of doom
      when Britain changed to decimal currency in the late 60s but it never really
      happened.

      One of the things that will likely happen is some price leveling for goods
      and services across borders with other Euro-zone countries. That was
      predicted elsewhere and did occur, or so I remember reading. From my
      observation watching the introduction of the Euro in many other countries
      while I lived and worked in Europe, I found it very interesting that people
      were very quick to complain about prices that went up but I never heard one
      complaint concerning prices that went down.

      Paul in NW Florida


      [Non-text portions of this message have been removed]
    • Martin Votruba
      ... Thanks for the reminder, Paul. ... Rightly so, I d say, Ron, when they were talking about their purchasing power. Statistics have shown it s been dropping
      Message 2 of 18 , May 3, 2008
        > the same kind of perception-driven predictions of doom
        > when Britain changed to decimal currency in the late 60s

        Thanks for the reminder, Paul.

        > Without exception they all have the same perception that Sven
        > expresses in the posting you referenced.

        Rightly so, I'd say, Ron, when they were talking about their
        purchasing power. Statistics have shown it's been dropping in Germany
        for several years now. The problem is the perception that it is a
        result of the switch to the euro. It is a result of a variety of
        factors, including, e.g., the changes in the value added tax, and, of
        course, government policies. By comparison, Ireland is at the other
        end of the scale of the developments in the eurozone after its
        introduction -- rapid riches. Both the German decline and Irish rise
        happened regardless of the euro.

        In other words, if "B" follows "A," people often assume that "B" is a
        result of "A." Yet, with the same government policies, the changes in
        VAT, and economic developments, people's purchasing power would have
        probably followed the same trajectory in Germany had it kept the D-Mark.

        I don't assume that the euro must be automatically beneficial
        (especially in the situation when the monetary policy is adjusted
        according to the needs of the biggies like France and Germany rather
        than the post-com "specks"), but to be able to blame the real drop in
        the standard of living in Germany on the euro, or praise the euro for
        the rise in Ireland, we'd have to show that the euro resulted in a
        similar trajectory in all or most of the eurozone, and that it was not
        caused by other factors. I'm not aware of evidence that the euro was
        a key factor in either Germany or Ireland.


        Martin

        votruba "at" pitt "dot" edu
      • Nick Holcz
        Yes, perceptions are perception and the perception when Australia changed to decimal currency A$ ( way back in 1966, my God I am getting old) that prices went
        Message 3 of 18 , May 3, 2008
          Yes, perceptions are perception and the perception when Australia
          changed to decimal currency A$ ( way back in 1966, my God I am
          getting old) that prices went up and also when we changed our weights
          and measures system to decimal that the same thing happened.

          Nick
        • Martin Votruba
          ... Thanks for the examples, Nick. People are capable of projecting such perceptions on other creatures, too. After Switzerland first adopted daylight saving
          Message 4 of 18 , May 3, 2008
            > that prices went up and also when we changed our weights
            > and measures system to decimal that the same thing happened.

            Thanks for the examples, Nick. People are capable of projecting such
            perceptions on other creatures, too. After Switzerland first adopted
            daylight saving time in 1981, farmers swore that milk yield was
            dropping. The cows must have all rushed to the village square to
            check the church clock, and the Alpine grass never tasted the same.


            Martin

            votruba "at" pitt "dot" edu
          • Ron Matviyak
            Ahh, shaded of change. I remember a bit of hte same complaining when the US changed booze sales from fifths (English units) to metric (750ml). I was on Skype
            Message 5 of 18 , May 3, 2008
              Ahh, shaded of change. I remember a bit of hte same complaining when
              the US changed booze sales from fifths (English units) to metric (750ml).

              I was on Skype with Germany last night and the senior salesman friend
              replied "Kaufkraft ist nicht bei Gehalt angekommen , immer mehr Leute
              haben Schulden und wenig Geld" Purchasing power hasn't kept up with
              inflation, and more people are in debt and have less money.

              To back up the argument for statistics and perception, the NY Times
              recently published

              http://www.nytimes.com/2008/05/01/business/worldbusiness/01middle.html

              Ron

              --- In Slovak-World@yahoogroups.com, "Martin Votruba" <votrubam@...>
              wrote:
              >
              > > that prices went up and also when we changed our weights
              > > and measures system to decimal that the same thing happened.
              >
              > Thanks for the examples, Nick. People are capable of projecting such
              > perceptions on other creatures, too. After Switzerland first adopted
              > daylight saving time in 1981, farmers swore that milk yield was
              > dropping. The cows must have all rushed to the village square to
              > check the church clock, and the Alpine grass never tasted the same.
              >
              >
              > Martin
              >
              > votruba "at" pitt "dot" edu
              >
            • skeeter
              For what it s worth, though somewhat unrelated, there was a push on here in the USA 30-some years ago to switch from the English measurement system to the
              Message 6 of 18 , May 3, 2008
                For what it's worth, though somewhat unrelated, there was a push on here in the USA 30-some years ago to switch from the English measurement system to the Metric system. That never quite caught on. What did I get out of it? I had to buy two sets of tools. One metric for my Japanese motorcycles and German car, and one English for most everything else. I ws already savvy with the metric system (almost everything in the sciences was already measured in milliliters, centimeters, and the like). Now, if you don't know one from the other, you're out of luck.

                ----- Original Message -----
                From: Nick Holcz
                To: Slovak-World@yahoogroups.com
                Sent: Saturday, May 03, 2008 10:15 AM
                Subject: Re: [Slovak-World] Re: Euro go-ahead


                Yes, perceptions are perception and the perception when Australia
                changed to decimal currency A$ ( way back in 1966, my God I am
                getting old) that prices went up and also when we changed our weights
                and measures system to decimal that the same thing happened.

                Nick




                [Non-text portions of this message have been removed]
              • Martin Votruba
                ... Thanks, Ron. It was refreshing to see no blame on the euro for that. Since the collapse of communism, not only that part of the continent, but also
                Message 7 of 18 , May 3, 2008
                  > To back up the argument for statistics and perception

                  Thanks, Ron. It was refreshing to see no blame on the euro for that.
                  Since the collapse of communism, not only that part of the continent,
                  but also Western Europe has been slowly moving towards the large gap
                  between the top incomes and the middle- and lower-middle-class incomes
                  that has been typical of the US. The American laborers' average
                  purchasing power has been mostly oscillating rather than rising for
                  about three decades now.

                  The gap is already quite large in Slovakia -- fewer than 30% of the
                  population, a large segment of them in Bratislava, have salaries above
                  the country's average, 70% earn less than average salaries. A
                  specific post-com situation that fosters social discontent is that,
                  broken down by age groups, the highest average salaries are earned by
                  the 30-34-year-old Slovaks. By comparison, the people in their 50s,
                  whose incomes are the highest in most societies, which gives many of
                  them a sense of accomplishment and deserved status, are making about
                  10% less in Slovakia.

                  At the same time, while the gap between the middle-class and the top
                  earners has been opening faster in the post-com countries than in the
                  older European democracies, the purchasing power of all the employed
                  has been growing in Slovakia, and substantially so. A recent article
                  has worked out that the Slovaks were able to buy about 6.2% more with
                  their salaries by the end of 2007 than when the year began, an
                  exceptional year, but part of a trend. Of course, that's not what the
                  doom-and-gloom Slovaks say in opinion polls.


                  Martin

                  votruba "at" pitt "dot" edu
                • Martin Votruba
                  ... As to Slovakia, here are a few price-to-salary comparisons -- how much a given item cost a Slovak with the average income in 2007 by comparison to the same
                  Message 8 of 18 , May 3, 2008
                    > To back up the argument for statistics and perception

                    As to Slovakia, here are a few price-to-salary comparisons -- how much
                    a given item cost a Slovak with the average income in 2007 by
                    comparison to the same in 2002 (a minus means a drop):

                    bread, butter: the same percentage of income as in 2002
                    pork (a popular cut): -42%
                    chicken: -31%
                    beer: -23%
                    TV: -65%
                    small Skoda car: -33%
                    bank account charges: +39%

                    The Slovaks' rising incomes have substantially outpaced the rising
                    prices of the listed items. On the other hand, an opinion poll among
                    the gainsaying Slovaks might suggest that everything is 2-3 times more
                    expensive now and that they are reduced to borrowing money to take the
                    bus to work.


                    Martin

                    votruba "at" pitt "dot" edu
                  • skeeter
                    The American laborers average purchasing power has been mostly oscillating rather than rising for about three decades now. I was watching the news last
                    Message 9 of 18 , May 4, 2008
                      "The American laborers' average
                      purchasing power has been mostly oscillating rather than rising for
                      about three decades now."

                      I was watching the news last night (I don't remember which network) and they said the average American CEO's salary has gone from 40-times the laborer's salary in 1980 to 433-times the laborer's salary today. The rich get richer, and the little guy gets screwed. That might explain some of it.



                      ----- Original Message -----
                      From: Martin Votruba
                      To: Slovak-World@yahoogroups.com
                      Sent: Saturday, May 03, 2008 4:46 PM
                      Subject: [Slovak-World] Re: Euro go-ahead


                      > To back up the argument for statistics and perception

                      Thanks, Ron. It was refreshing to see no blame on the euro for that.
                      Since the collapse of communism, not only that part of the continent,
                      but also Western Europe has been slowly moving towards the large gap
                      between the top incomes and the middle- and lower-middle-class incomes
                      that has been typical of the US. The American laborers' average
                      purchasing power has been mostly oscillating rather than rising for
                      about three decades now.

                      The gap is already quite large in Slovakia -- fewer than 30% of the
                      population, a large segment of them in Bratislava, have salaries above
                      the country's average, 70% earn less than average salaries. A
                      specific post-com situation that fosters social discontent is that,
                      broken down by age groups, the highest average salaries are earned by
                      the 30-34-year-old Slovaks. By comparison, the people in their 50s,
                      whose incomes are the highest in most societies, which gives many of
                      them a sense of accomplishment and deserved status, are making about
                      10% less in Slovakia.

                      At the same time, while the gap between the middle-class and the top
                      earners has been opening faster in the post-com countries than in the
                      older European democracies, the purchasing power of all the employed
                      has been growing in Slovakia, and substantially so. A recent article
                      has worked out that the Slovaks were able to buy about 6.2% more with
                      their salaries by the end of 2007 than when the year began, an
                      exceptional year, but part of a trend. Of course, that's not what the
                      doom-and-gloom Slovaks say in opinion polls.

                      Martin

                      votruba "at" pitt "dot" edu





                      [Non-text portions of this message have been removed]
                    • Martin Votruba
                      ... Yes, Skeeter, that s part of the difference between the European and American societies that I mentioned. That ratio has traditionally been 1:10 to 1:20
                      Message 10 of 18 , May 4, 2008
                        > the average American CEO's salary has gone from 40-times
                        > the laborer's salary in 1980 to 433-times the laborer's
                        > salary today.

                        Yes, Skeeter, that's part of the difference between the European and
                        American societies that I mentioned. That ratio has traditionally
                        been 1:10 to 1:20 in the European democracies, but it has started
                        moving faster in the direction of the US since the collapse of communism.


                        Martin

                        votruba "at" pitt "dot" edu
                      • Martin Votruba
                        As expected the European Commission has recommended today that Slovakia adopt the euro on Jan. 1, 2009. A report is below. Martin votruba at pitt dot edu
                        Message 11 of 18 , May 7, 2008
                          As expected the European Commission has recommended today that
                          Slovakia adopt the euro on Jan. 1, 2009. A report is below.


                          Martin

                          votruba "at" pitt "dot" edu

                          x x x



                          EU: No Country But Slovakia Meets Euro Adoption Criteria

                          DOW JONES NEWSWIRES, 5/7/2008 -- No other country but Slovakia meets
                          the criteria for euro adoption, the European Commission said Wednesday
                          in its latest convergence report, giving a green light to Slovakia's
                          bid to join the euro zone.

                          The commission, the E.U.'s executive arm, along with the European
                          Central Bank, reports at least once every two years on the progress
                          made by E.U. member states in fulfilling obligations to achieve
                          economic and monetary union.

                          Slovakia received recommendation from the European Union Wednesday to
                          join the fifteen member state-strong euro-zone, and is lined-up to
                          become the fourth country in two years to join the club after Slovenia
                          did so on the first day of 2007. Cyprus and Malta entered at the
                          beginning of this year.

                          Poland, Hungary, the Czech Republic, and the Baltic states of
                          Lithuania, Latvia and Estonia joined the E.U. along with Slovakia in
                          May 2004, while Romania and Bulgaria were the latest to join the
                          twenty-seven member free-trade block in January 2007.
                        • J Michutka
                          So how is the word euro declined in Slovak--like mesto? e.g. jedno euro, dva eura , sedem .... eur??? Or is it not declined, and just remains euro
                          Message 12 of 18 , May 7, 2008
                            So how is the word "euro" declined in Slovak--like mesto? e.g.
                            jedno euro, dva eura' , sedem .... eur??? Or is it not declined, and
                            just remains "euro" regardless of number? And what do they call the
                            "cents" in Slovak?

                            I really miss having different and interesting monies from country to
                            country, but on the other hand, it will be so much easier....no
                            looking for a place to get the local currency every time I cross a
                            border, or having to plan ahead and carry multiple currencies.

                            Julie Michutka
                            jmm@...


                            On May 7, 2008, at 9:20 AM, Martin Votruba wrote:

                            > As expected the European Commission has recommended today that
                            > Slovakia adopt the euro on Jan. 1, 2009. A report is below.
                            >
                            >
                            > Martin
                            >
                          • skeeter
                            It s not just in Europe. I ve traveled to Canada (Canadian dollars) and Mexico (Pesos), and had a hassle converting them back into US dollars when I got home.
                            Message 13 of 18 , May 7, 2008
                              It's not just in Europe. I've traveled to Canada (Canadian dollars) and Mexico (Pesos), and had a hassle converting them back into US dollars when I got home. I should have just kept them -- their currencies are much more attractive than ours.

                              ----- Original Message -----
                              From: J Michutka
                              To: Slovak-World@yahoogroups.com
                              Sent: Wednesday, May 07, 2008 10:07 AM
                              Subject: [Slovak-World] declining the euro


                              So how is the word "euro" declined in Slovak--like mesto? e.g.
                              jedno euro, dva eura' , sedem .... eur??? Or is it not declined, and
                              just remains "euro" regardless of number? And what do they call the
                              "cents" in Slovak?

                              I really miss having different and interesting monies from country to
                              country, but on the other hand, it will be so much easier....no
                              looking for a place to get the local currency every time I cross a
                              border, or having to plan ahead and carry multiple currencies.

                              Julie Michutka
                              jmm@...

                              On May 7, 2008, at 9:20 AM, Martin Votruba wrote:

                              > As expected the European Commission has recommended today that
                              > Slovakia adopt the euro on Jan. 1, 2009. A report is below.
                              >
                              >
                              > Martin
                              >




                              [Non-text portions of this message have been removed]
                            • Martin Votruba
                              ... Yes, Julie (_dve_). ... _Cent_ [tsent] (masc., hard pattern: 2 centy, 5 centov). ... Since Slovakia is surrounded by countries that aren t meeting the
                              Message 14 of 18 , May 7, 2008
                                > how is the word "euro" declined in Slovak--like mesto? e.g.
                                > jedno euro, dva eura' , sedem .... eur???

                                Yes, Julie (_dve_).

                                > And what do they call the "cents" in Slovak?

                                _Cent_ [tsent] (masc., hard pattern: 2 centy, 5 centov).


                                > no looking for a place to get the local currency every time
                                > I cross a border, or having to plan ahead and carry multiple

                                Since Slovakia is surrounded by countries that aren't meeting the
                                criteria, this will not be different any time soon for the Slovaks who
                                mostly travel to Poland, Hungary, and the Czech R. When they joined
                                the European Union in 2004, all three were saying they would adopt the
                                euro by 2009-2010, but have failed. The current very tentative
                                estimates are that they might meet the criteria to adopt the euro by:

                                Poland - 2012
                                Czech R. - 2012
                                Hungary - 2014

                                Only the Slovaks' second major summer destination, Greece, has the
                                euro, and Austria and the countries west of it (except Switzerland).


                                Martin

                                votruba "at" pitt "dot" edu
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