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54 votes

If the eurozone budget deficit limit is 3%, why is the European Commission telling Italy it must revise its 2.4% deficit budget?

It appears the problem isn't the deficit (the loss from an individual budget) but the size of the existing debt itself. From a report in the Guardian Italy’s public debt is worth more than 130% of ...
origimbo's user avatar
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44 votes
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If the eurozone budget deficit limit is 3%, why is the European Commission telling Italy it must revise its 2.4% deficit budget?

Italy is not just planning a high budget deficit, it has a very high level of national debt. (As of 2017, it was 131.8% of their GDP, second only to Greece) This makes their deficit riskier than it ...
CoedRhyfelwr's user avatar
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35 votes

Why is using the euro instead of a local currency such a big deal and why is the wealth of the society an argument?

Investopedia has an article about why some countries prefer not to use the Euro. Countries with their own national currencies may have several advantages in managing economic problems: "They ...
Brian Z's user avatar
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18 votes

Why is the SNP putting so much emphasis on currency plans?

The SNP's long term goal is independence for Scotland. During the last referendum on the subject, the issue of which currency Scotland would use was an important point of contention. The legal ...
user's user avatar
  • 17.7k
17 votes

Why is using the euro instead of a local currency such a big deal and why is the wealth of the society an argument?

Possible effects of adopting the Euro: Pro: Poland has significant trade links with Eurozone countries. Adopting the Euro removes an obstacle to trade, since traders no longer have to hedge against ...
o.m.'s user avatar
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12 votes
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Is there any indication that the Euro rate is being politically manipulated?

The criteria that the US Treasury applies to label a currency manipulator, according to US law Criterion (1) - Significant bilateral trade surplus with the United States. Treasury assesses that ...
against very long user names's user avatar
11 votes
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Why wasn't Greece kicked out of the Euro once it was clear that they falsified their statistics to join in the first place?

Kicking Greece out would be the same as admitting the politicians had made a mistake. And as you know, they never admit that - at least not voluntary. "Kicking the can and hope the problem disappears ...
Sjoerd's user avatar
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11 votes
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Why do Europeans pay for European products with US Dollar?

When two parties in a trade agree on what is traded, apples for oranges, petroleum for USD, petroleum for EUR, petroleum for apples, and so on, there is no reason why the trade cannot proceed in ...
H2ONaCl's user avatar
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10 votes

If the eurozone budget deficit limit is 3%, why is the European Commission telling Italy it must revise its 2.4% deficit budget?

As mentioned in previous answers, it is not just about the deficit but also about the already high level of national debt. Furthermore, the Italian government was initially expected to aim for a 0.8% ...
tombarti's user avatar
  • 201
9 votes
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Were the UK opt-outs of the Euro and Schengen enacted via the Ordinary Legislative Procedure?

To answer what I understand to be the spirit of the question, the two opt outs are to be found as protocol 15 of the Treaty on European Union (Maastricht treaty) for the Euro and the section "Protocol ...
origimbo's user avatar
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8 votes
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Who limits the euro issued in each eurozone country?

Only the ECB has the right to issue Euro banknotes (p. 103). States can issue coins up to a total value set by the ECB. At some point during the initial creation of the Euro, and during the accession ...
o.m.'s user avatar
  • 109k
8 votes

Why is using the euro instead of a local currency such a big deal and why is the wealth of the society an argument?

There are a number of issues that come with adopting the Euro. At the time of this answer the exchange rate is 1 złoty = .22 Euro. The first most obvious issue is people tend not to grasp currency ...
Ryathal's user avatar
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7 votes

Why is the SNP putting so much emphasis on currency plans?

they would be obliged to join the Euro as soon as the necessary economic conditions were met? The second part of this sentence is doing a lot of work. The criteria are quite onerous and many of the ...
pjc50's user avatar
  • 22.1k
7 votes

Under EU law, can Scotland remain or be re-admitted to the EU after Brexit while still a part of the UK?

The answer is a bit similar to the answer to Could the UK re-join EU after leaving? Legally, there is nothing in place to grant automatic EU membership or some sort of smooth path to it. Except if all ...
Relaxed's user avatar
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7 votes

Under EU law, can Scotland remain or be re-admitted to the EU after Brexit while still a part of the UK?

The Greenland example indicates that EU law is quite amenable to fudging situations. It's also important to remember that the EU is a creation of treaties and can be amended by treaties. A unanimous ...
pjc50's user avatar
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7 votes

Can an EU member officially give up pursuing Euro/Eurozone?

It's worth specifically talking about Sweden While UK and Denmark have negotiated Opt-outs, Sweden fits as a country that has basically unilaterally decided not to join the Euro. The Euro ...
Nathan's user avatar
  • 526
6 votes

Is there any indication that the Euro rate is being politically manipulated?

Political language is often imprecise, especially recently. The US has put a definiton of currency manipulators into law. While this is US law, and not international law, one might reasonably expect ...
o.m.'s user avatar
  • 109k
6 votes
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Can an EU member officially give up pursuing Euro/Eurozone?

Can an EU member officially give up pursuing Euro/Eurozone? No (...ish). The current stance of the EU Commission is: All EU Member States, except Denmark and the United Kingdom, are required to ...
armatita's user avatar
  • 5,467
4 votes
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Given that there isn't a fiscal union in the EU, why would the Greek crisis threaten other Eurozone members?

The monetary impact of a default in Greece should be very small in the Euro given that the percentage of GPB of Greece is very small compared to the rest of the Eurozone. However such default would ...
Pedro Santangelo's user avatar
4 votes
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Does the EU frequently review their members to see if they consistently meet the initial criteria?

No one has ever been ousted from the EU. Several of the Maastricht criteria only apply to countries that have not yet joined the common currency. For example, inflation, exchange rate stability, and ...
Brythan's user avatar
  • 89.8k
3 votes
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Why is the EU not happy with the euro usage in Montenegro

Not really a mistake in your assumptions but in the context of the situation. It's no longer about currency substitution (eurodization in this case) , it's about a soon to be EU member that did not ...
armatita's user avatar
  • 5,467
3 votes

Monetary policy: why does the dollar work for the US, but the Euro doesn't for the EU?

Quoting Paul Krugman is not helpful, because he never learned to speak English! :-) His blog is a vast accumulation of jargon, essentially designed for a University-level course in Economics. If you ...
Ed999's user avatar
  • 212
3 votes

Eurozone countries surpassing their allowable deficit of 3% GDP

Empirically: nothing. Most states have at one time or another broken the limit. France hasn't met the limit since 2007. There has not been a single measure taken by the EU. The deficit "limit" of 60%...
MSalters's user avatar
  • 5,466
3 votes

Why is using the euro instead of a local currency such a big deal and why is the wealth of the society an argument?

Adopting the Euro as a currency is not a simple switch to a different money unit: Sovereignty It means accepting the rules which govern the Eurozone. These rules are necessary for the unique currency ...
Erwan's user avatar
  • 17.9k
2 votes

Why did the EU not unify the financial systems when the Euro was created?

financial (starting from the taxation), judicial/law, political, and military systems. Making any big reform is hard. And such idea would require dozens of huge reforms. Voters in many countries ...
Shadow1024's user avatar
  • 5,917
2 votes

Under EU law, can Scotland remain or be re-admitted to the EU after Brexit while still a part of the UK?

The EU has informal programs for the "European regions" and Scotland is composed of 6 such regions. However, when it comes to the basic EU law, all of Scotland is just a somewhat random part of the U....
Luboš Motl's user avatar

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