Roland Dürre
Friday February 3rd, 2017

A Story About the EURO History.

Europe is More Than the EU (and the EURO).

After all, we no longer have the five-hundred Euro bill – regardless of the fact that the currency is losing value.

Last Tuesday, I went to the Café Luitpold where I attended an event the title of which had been advertised with the sentence you can read in the heading of this article (up to the brackets; what is in there is mine).

Harald Lesch had been invited as the star of the evening, but unfortunately he had to cancel at short notice. His replacements were two “Europe experts”.

Regardless of Harald Lesch not being there (in fact, he had been the reason I registered for the event), it was an interesting evening, especially because the nonsense they all talked was very refined. Mind you, we are talking people who in our country are considered the elite in science. To be sure, it is sometimes annoying if you have to listen, but for me it is also a morbid joy to listen to refined nonsense.

The two gentlemen on the podium started with Ancient Rome and some of their theories were really rather absurd. For instance, when someone in the audience asked if the downfall of Europe perhaps had something to do with losing our spirituality and religion, the answer was that the true danger for Europe was not from atheists but from agnostics. The offered explanation was that a fanatic atheist finds it easier to understand a strict Islamic faith than an agnostic.
Which makes integration easier.

That was my “Oh-my-God” moment.

My friend Sigi was also at this event in the nice coffee shop in the noblest part of Munich. After the presentation and discussion, Sigi told me a story that sounded quite familiar. Because I had often told it similarly – but never to Sigi.

To make up for it, let me tell you that Rudi Jansche told me the story as early as twenty years ago, albeit in the future form at the time. It was before the EURO was introduced and Rudi was one of the top managers of a relevant English concern in Germany that had a lot of power in the rest of Europe and also in the FRG. And I often wondered where my mentor Rudi had gained all this foresightedness.

I will now tell you the EURO story (Sigi’s and mine) as I myself experienced it:

In the early 1960s, I was in France as an exchange student. They still had the French Franc. My French was not yet very advanced and I was a little confused to see that a sports jacket, for instance, cost 100 (cent) Francs. And my host said that he had payed ten thousand (“dix milles“) Francs or  “dix milles balles“.

The riddle was soon solved. They had had a currency reform in France shortly before my visit. The “nouvel franc“ had been introduced. It equalled 100 old Francs. People could continue to use the old “francs“ as “centimes“. Basically, all they did was drop two digits. Many people, however, still spoke and had the mental concept of the old Franc, regardless of the products now being priced in the shops in new Francs.

For more information about the French “currency reform”, Wikipedia – here is an excerpt:

On December, 27th, 1958, the introduction of the Nouveau Franc (NF) as of January, 1st, 1960 was ordered. One NF, since 1963 officially only termed Franc (F), equalled 100 old Francs (anciens francs). The old Franc coins could still be used as Centimes. In everyday life, the old Francs continued to be part of the language for decades.

This Wikipedia article is absolutely worth reading. It gives you a good idea about the French inflation.

I have a vague memory that there was a time when one Deutsche Mark (DM) bought you more or less one nouvel franc (NF) – or vice versa. However, that time was soon over. It only took a few years for one Deutsche Mark to buy you three Francs. And matters continued in this way.

It was quite a surprise for me to see how with every visit in France the baguette got less expensive (for me). After all, its maximum price was regulated by law and apparently the state paid to subsidize it. Just like it surprised me that, even after several visits in France, I remained “le boche“ for some French people. Some of the families that had formerly been friends with my host family actually started to avoid them because they had opened their homes to a “boche“ and also – which was even worse – had sent their son to Germany, where the arch enemy lived. The good news is that, regardless, I soon found many young friends in France.
Our family (with my parents and my sister) mostly went to Austria on vacations. I still fondly remember the Schilling. It was truly an adventure to have the turnpike opened for us at the border and to drive through and then use a foreign currency. We were in a foreign country!

The Schillings – both the 1-Schilling coin and the 5-Schilling coin – looked beautiful. I remember that one DM equalled roughly seven Schillinge. This never really changed very much.

Both the vacations with my parents in Austria and my French exchanges were soon a thing of the past. Having escaped the parental home, I more and more often chose countries like Italy or Greece.

This is how I learned about Lira and Drachmens. Those were totally different kinds of currencies. The bills were greasy, the coins reminded you of GDR money and they were worth practically nothing.

In Italy, I was surprised to notice that the pizza got cheaper by the year for me, regardless of the fact that, nominally, it got more and more expensive in Lira. It was similar in Greece. For the owner of DMs, it was paradise. Unfortunately, those times are now long gone.

From the perspective of the Italians and Greek, it was not so great. For instance if they wanted to buy a Mercedes. Except that, as soon as they had the bank agreement for the credit to buy the car, said Mercedes was already more expensive. And that meant they would then buy a 2CV, R4 or Lada instead.

And then the EURO came. And everybody was happy. The German industry and the international concerns were enthusiastic, because now they all could sell a lot more. After all, now there was a shared domestic market with a shared currency. So you could really get under way and either destroy or take over the remaining local competition, depending on what seemed most advantageous for your own business.

Initially, the Italians and Greeks were also quite happy. After all, the prices for the nice German automobiles remained stable. Now you could afford them, just like you could afford so many more of the beautiful things the German and international concerns flooded the country with.

I was the only one who was not happy, because now, the Pizza and the Gyros was more expensive than before in Italy and Greece. Formerly, whenever we rode our bicycles over the Alps to the Mediterranean Sea, the general rule was that staying overnight got less and less expensive the further north you travelled. That is no longer true today. Now the least expensive places to stay overnight are in Bavaria. It gets more expensive in Austria and continues in the same direction in Italy.

Naturally, there was a downside to the EURO. The beautiful cars from Germany, like many other things, had been bought on credit. And while the German industry was all fascinated and sold record numbers, some countries were destroyed by their debt. It was no longer possible to “heal” through devaluation. The only things that remained of the nice Euro straw fire were inflation and less income.

The creditors wanted high interest rates from these weak countries and got them, too – and that caused additional pain. Just like it is always painful if you are already bankrupt and have to pay a lot of money without getting anything in return.

However, the EZB, the EU and the International Monetary Fund saw reason. They lowered the interest rates and bought the trash bonds in order to avoid the great “catastrophe” of state bankruptcy of one or several member states.

That seemed to save many European countries, not only in the south. But it was especially beneficial for the biggest of all debtors in Europe: Germany, i.e. us. Our reward for agreeing to it was that we no longer had to pay any interest. We would not otherwise have let it happen, because, naturally, our motto is “Germany first“!

This is how we won twice over: first our industry took total advantage of the shared market thanks to a shared currency – and then we no longer had to pay any interest for our national debt. All of a sudden and in a wonderful and smart way, we suddenly had a balanced national budget.

My friend Rudi foresaw all these things. But the responsible government under the great Chancellor of the re-unification did not.

Even if that government had not wanted the EURO, that would not have helped. After all, even at the time, the government, along with the entire EU, did whatever the industry said. And the industry wanted the EURO. Incidentally, that was also true for the other EU countries. Or, to be more precise: they wanted to do away with the DM, because the dominant role of the strong DM had been a constant annoyance for them for a long time. And the only way to get rid of the DM was the introduction of the EURO.

And now we have a problem. I very much look forward to hearing what the new miracle candidate of the SPD has to say about it. After all, he supported this line in the EU parliament, didn’t he?

Now he must and will again talk German: Germany first. After all, there is no second German politician (with the possible exception of the Great Bavarian) who learned better from Trump how to “popularize” the people.

He, too, will have nothing to fight the current system of party and lobbyist oligarchy with, nor will he want to. But I am sure that he will manage to promote his own so unbelievable career. And now he dreams of becoming Federal Chancellor.

Well, that is fine by me. It probably will not make the slightest difference who reigns in the Berlin of megalomania. Merkel alongside Schulz or Schulz alongside Merkel. The only certainty is that Mr. Gabriel will remain Federal Minister of State (due to secret understandings – the main tool of current policy).

Consequently, nothing will change about my story. It will end like so many fairy tales: and if they did not die, they will continue to govern.

Supplementary comment: 
From EURO fans, I hear all the time that it is so much nicer to travel these days. The disadvantage of having to change money is a thing of the past.

That is an argument I do not understand at all. In the also not so good old days, I always had travellers’ cheques on me. I had to change them in the country of destination. It was probably total nonsense, but my super-ego ordered me to do it.
Today, however, money is only an accounting unit and the conversion from one currency to another is one of the easiest tasks for our “digital world”.

But then, the EURO happened and now we have it. I would really have liked to ask the two Europe experts if they considered the introduction of the EURO useful for the idea of a new shared Europe or if it was detrimental. I never got the chance to ask that question. I cannot answer the question, but I assume it was more detrimental than beneficial.

Now, we not only have the EURO, but also the zero interest rate. And there is a continuing rise in national debt for European countries that is still covered by the EZB and the International Monetary Fund. That is a situation about which nobody can predict how long it will work out well.

During our last PM Camp, Gerhard Wohland said that a problem is a state of affairs that cannot continue. Nobody has a solution to our problem. Perhaps there is no solution. Consequently, those responsible in Europe will just continue in the same way as before. What other choices do they have?

For me, however, Europe is so much more than the EURO. And I believe it is totally irrelevant when and how it will explode. After all, it is only an accounting unit that will then be replaced by new and just as virtual accounting units. A good administration will be quite capable of doing that.

To be sure, this will be yet another situation where you will get winners and losers. Most likely, the rich ones will again be the winners and the poor ones will be the losers. But that is something we are more than used to and so we will continue until there is the next bomb.

And that sounds like logics of history to me. Perhaps the bang will come soon, because the world has far greater challenges to master than your average currency crisis.

(Translated by EG)

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