This came up in conversation between my mom and I talking about Euros and how cool that is to me (Canadian). I then wondered why we can’t just have that everywhere and all she could say was “it wouldn’t work, what about less profitable countries” and I said “they’d just make/have less?” She did not like that answer and I really wanna know the real reason on why that wouldn’t work bc in my mind since we made up money why can’t we just make up how new money works???
Please explain like a teacher explaining why a kid can’t share 3 m&ms with 28 people
In: Economics
Even within the EU and within Schengen zone not all countries are on euro (looking at you forint at least). It takes a massive level of cooperation and.m consideration to work and really countries need to have compatible goals and levels of economic development to make it work. A bunch of the tricks of economic control go out the window if you give up control of currency. This might add stability and de facto it happens when countries move to something pegged to the US Dollar often as a long shot at recovery after years of mis management and huge foreign debts.
They can, there are just downsides to it and it would require some geopolitical maneuvering to secure in votes in the United Nations.
Realistically though the world pretty much already operates on US dollars or a US dollar equivalency it is easy to figure out for pretty much any currency or goods, which means that there’s really not any good reason to even think about a United Nations unified currency because it wouldn’t drastically change the status quo for the vast majority of countries and would just introduce new difficult to solve problems for the remaining few
To have unified currency you need to have unified monetary policy…. that is a lot of independence for an country to give away. Tax policy and all sorts of very critical things depend on it. Eurozone is very unusual in how tightly different independent countries are allied and how much the laws and policies are aligned. Without such a deep alliance, you can’t really share a currency. Well, you can have dollarization, but that’s not quite the same thing, its a very raw deal for the country using a currency it doesn’t control.
Countries wouldn’t want to give up their control over their own monetary policy. How would policy even be decided between 200 different countries with different economies with different needs?
Completely subjectively, this is a problem crypto aims to solve. BTC is just that and not tied to any one country. It has its other issues, but it’s essentially a global currency. Now as others have described, countries are acting in their own best interest to control their economy. Kind of a situation where you’ll never get rid of either
UN: let’s use a single currency
Countries: make me
That’s it. UN can’t make any country (especially when the country isn’t a failed state) to do anything.
The eurozone is better for the wealthier countries of Europe than it is for the poorer countries in Europe. Much of southern Europe essentially has overvalued currency relative to their economy, while Germany in essance has an undervalued currency relative to what the deutschemark would be on its own. In an export based economy it’s advantageous to have a weaker currency, in an import based economy it’s advantageous to have a strong currency. This is why China devalues it’s currency, it’s economy and political stability depend on maximizing employment and exports. Germany has a disproportionately large industrial sector relative to other western economies and it’s very much bolstered by the euro. If poorer countries in southern europe had direct control over their monetary policy they’d likely be better positioned to compete in global markets for exported goods.
The UN doesn’t collect taxes (more like dues) and doesn’t have the ability to issue their own bonds or currency backed by bonds. Even if they had the means to issue a currency and financially back it, they don’t have the authority to make anyone else use it except out of convenience. (For example, many countries use US dollars for transactions for the convenience).
The UN is amazing at opening discourse and providing the framework for groups to deal with major issues, but it has basically no executive power to actually do anything (largely by design and because it was forged in the early cold war and looked to attract the major powers by giving them carte blanche, effectively ceding any sort of actual binding power, but that is a seperate issue).
The Euro works because the european union is a governing body that can impose its trade and commerce rules on all of its members, and can choose to exclude countries that aren’t economically stable from joining. The UN is not a governing body. And not all of its current member states are economically stable. they would lower the value of the currency for everone else, and certain members shouldn’t be trusted with the means to manipulate the strength of a unified currency (I’m thinking of Russia, but I’m sure there are others.)
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