Not even all of EU current countries have Euro, But that is some goal, afaik Canada shares lots of culture or economy with Europe. Step by step, that’s a plan.
Only if we join the EU.
There’s multiple countries that have unilaterally adopted the euro as their main or secondary currency.
You are more than welcome to join, if you ask me(and basically everyone I know).
After all you are the country with the closest sea border to France* and also have a close maritime border to Denmark*.
(*: Well, these parts are not part of the EU,yes,but that’s hardly youe fault).
We would be very happy to have you.
And beside the whole “free trade” stuff it also has another often overlooked one: The EU is also a defence alliance (the terms are actually stronger than NATO’s but the later takes precedence) especially in times when NATO is,well, unreliable, that might be a big plus as well.
What would be the pros and cons for this from both European and Canadian perspectives?
Massive massive trade alleviations - the fact that Canada could export to a economic zone of 340 Million people (realistically more as a lot of smaller economies are linked to the Euro, arouns 500 -700 Million depending on how strict your criteria are).
The direct GdP of that zone is roughly 16.4 Trillion USD, the third largest economic zone after the UD and China but with a much less centralized wealth distribution. (And 17.5 Trillion if you add the closely related economies.
Why is this important/good? Because then Canadian companies could do trade with long term commitments without having to factor in the risk of currency fluctuations. Additioally the economy would be much less prone to foreign pressure on it’s currency.
For Canada this would be especially interesting: They import large amounts of natural ressources, import industry goods but are also far enough away that some drawvacks like outsourcing to lower income areas are not as likely.
And from the EU perspective the additional “stable customer” and “stable supplier” would be golden.
Came here to ask the same thing but I’ll add the two obvious bits since nobody’s answering yet:
Pro: the Euro is more widely accepted and adding Canada to the list would increase its viability as the only currently realistic alternative to the US dollar (besides maybe JPY but there are many other asterisks here I’m skipping for brevity)
Con: Canada would effectively lose control over its own monetary policy which may lead the 100+ countries who export their own money printing operations to Canadian mints to consider moving operations to the US or EU
Both: it would be easier to invest into and remove money from Canada in large quantities without affecting exchange rates
My understanding it will strengthen euro making exports less competitive
I haven’t used physical cash in a decade so I would barely notice, but I would have to look at all the likely outcomes before voting on it. It does seem like something that wouldn’t help the states though so that much is appealing
How to make it easier for european tourists and investors.
An unorganised switch in reserve currency may see China attempting to compete to be the reserve currency. If things go poorly and the American economy suffers in a much more extreme fashion a much more hard-line form of fascism (harder than the Trump regime) may crop up with the ensuing economic discontent.
Or perhaps a form of Socialism. Either way it’s likely to be single party and authoritarian.
Honestly, I think a new reserve currency is inevitable. And I’m betting on it happening next year after the US has its first default.
I think it’s more likely to be some type of Central Bank Digital Currency (CBDC) which might be claimed to be backed by something tangible to enable global buy in but won’t really be.
I find it hard to believe USD to be switched for another fiat currency after its failure, but it would be cheaper than having a currency backed by gold and easier to control. I guess at the end of the day if one currency is more trusted that is enough to make the switch.
US debt is in US dollars and the US is not constrained on the issuance of dollars. There will be no default. Inflation, yes. Default, no.
Not sure digital currency could perform all the functions of being a reserve currency, such as being readily fungible, untracked, and easily physically transported. I mean, two people bribing their way out of a war zone, or just a widely recognized currency sitting in a go-bag, these were some of the usages the USD took up, due to people knowing it was widely accepted.
Also, I don’t know if defaults would be enough to stop that, as the currency is usually backed by the US giving a black eye to anyone small enough who tries to trade oil in something else.
But I accept that these days these are marginal circumstances, trade and oil deals are done in other currencies in some places.
My thinking on this is probably out of date. I guess we’ll just have to wait and see.
I think your definition of a global reserve currency is a bit out of touch. I would argue that there is no requirement for a global reserve currency to be untraceable but even if there was.
There are other assets that are untraceable and could still perform that function if it was a need.
As far as being fungible, and easy to transport, any digital currency would meet these requirements. It’s not like banks are physically shipping USD bills to anyone.
Right now, the US government is struggling to pay troops during the shutdown. And even if there were no shutdown, we are paying more in interest on the national debt then we do for the entire military industrial complex. So I don’t think the claim that the USD is backed by it’s military is a strong argument anymore, especially not if things continue on their current course or if any thing negative happens.
