Re:African leaders launch landmark 55-nation trade zone
by hydrox24 on Monday July 08, 2019 @12:11AM
(#20379831)
> Why imitate the Euro when that experiment has gone badly?
Because the Euro solved a problem that did not exist in the EU. Every nation that joined was able to convert their currency to other EU currencies at reasonably low cost, and because each currency was relatively stable, at a low risk too. Africans do actually have high currency conversion costs, and some of the currencies are risky.
To put it in Krugman's terms, the African nations have mostly committed the 'original sin' anyway, and this is a way of making a bad situation better. Italy was free of the original sin and was making a good situation worse by joining the EU.
Because the Euro solved a problem that did not exist in the EU. Every nation that joined was able to convert their currency to other EU currencies at reasonably low cost, and because each currency was relatively stable, at a low risk too. Africans do actually have high currency conversion costs, and some of the currencies are risky.
To put it in Krugman's terms, the African nations have mostly committed the 'original sin' anyway, and this is a way of making a bad situation better. Italy was free of the original sin and was making a good situation worse by joining the EU.