SEPAaratists

[Dave Birch] At a SEPA seminar I went to — at which, as an aside, the delegates agreed overwhelmingly with the statement that “bank payment products are inadequate for the Internet and mobile world” — we were given a curious pamphlet from the European Payments Council (EPC) called “The most popular misunderstandings about SEPA clarified”. One of the statements was “SEPA is a demand-driven initiative” (which, of course, it isn’t). The clarification from the EPC says “European integration is rarely carried forward on a wave of popular support” (I’ll say!) and goes on to say that monetary union did not materialise by distributing euro banknotes and coins and hoping that national currencies would be enthusiastically abandoned. Indeed. But that’s not say that that idea was wrong: on the contrary, national currencies would have been forced to keep their value up relative to the euro or begin losing seigniorage (and influence). That was one of the points in favour of dear old John Major’s plan for the hard e-euro.

There are scenarios out there under which the hard e-euro returns! Suppose that given current circumstances, the eurozone begins to unravel. This isn’t a deranged English fantasy…

This view sees the Euro as being unworkable in the long-term, as Europe moves towards argument and fragmentation. In fact, the idea of Barclays buying UBS, Santander buying ING, and UniCredit taking over Nordea, creates an all-out financial and governmental war. As a result, EU member states begin to unravel their Euro commitments, with the Italian Northern League politicians at the forefront of the arguments to get out of the Euro. Soon, the Lira and Deutsche Mark are returned, and all of the banks’ investments are for naught. SEPA becomes a crumbling and expensive idea, which no longer has any relevance.

[From swiftcommunity.net]

European business and consumers might want to retain the benefits of lowered transaction costs whilst retaining national control over monetary policy. Thus, people might have euro bank accounts, euro payment cards and euro mobile transfer services that they could use through Europe but there would be no euro banknotes or coins. Countries that decided to print notes and mint coins (for what bizarre reason I can’t imagine) would mint in national currency. The euro wouldn’t disappear, but it would change.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

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