Winfried von Urff
Published: 01.10.1999 〉 Heft 10/2000 〉 Resort: Articles
Submitted: N. A. 〉 Feedback to authors after first review: N. A. 〉 Accepted: N. A.
Effects of the Euro on the Agricultural Sector in GermanyFrom the point of view of German agriculture the introduction of the euro ended a discrimination that resulted from revaluations of the D-Mark and as a consequence thereofreductions of the prices used in Common Market Organisations in national currency. It is shown in the contribution that this argument does not stand a critical scrutiny. In the long run real agricultural producer prices in Germany did not evolve differently from those of other EU-member states. Monetary risks vis-à-vis member states participating in the Monetary Union ceased to exist. Changes in trade flows between these countries caused by exchangerate variations as those experienced by Germany with her exports to Italy as a result of the Lira devaluation of spring 1995 have now become impossible. The introduction of the euro has made competition more transparent. Critics consider it a great risk to establish the Monetary Union at a point in time when the EU is still far from having achieved the status of an Economic Union or a Political Union. After the exchange rate has ceased to be available as a means of adaptation to internal and external shocks and because of the limited flexibility of product and factor prices the only means of adaptation that remains may be employment. This may induce the demand for an employment oriented monetary policy or for financial transfers to the regions primarily affected by monetary measures. A failure of the Monetary Union can not be ex cluded but the probability that it may happen is limited.