Political integration is necessary to create single world currency: Nobel Prize Laureate

Business Materials 11 March 2009 17:03 (UTC +04:00)

Kazakhstan, Astana, March 11 / Trend , K.Arinova/

An idea to create a single world currency as way out of the global financial crisis is too important, but first it must be examined and studied, the European Bank for Reconstruction and Development (EBRD) Ex President Jean Lemier said at a news conference on the second Astana economic forum entitled "Eurasia's economic security in global risks system".

Kazakh President Nursultan Nazarbayev sounded this idea at the forum. The president said it may be called as Euras or Eurasia instead earlier offered "altin". Nazarbayev offered to form a working group to design a strategy of creating single world currency.]

"It is necessary to examine this idea, because it leads to solution of many issues, including monetary-loan policy and exchange rate policy," Lemier said. "Moreover, I know some countries are taking relevant steps to ensure stability."

Creating euro may be an example for this idea, the EBRD Ex-President said. "If Eurozone did not exist, the current crisis would seriously influence on the European countries," he said.

"We can observe forces attracting to euro in neighbor countries," Lemier said. "Monetary-loan stability is a key parameter for people in the Eurozone."

American Economist Edmund Phelps considers Nazarbayev's idea to create a single world currency as too intriguing. Edmund Phelps awarded the Nobel Prize in Economics for "Analysis of Intertemporal Tradeoffs in Macroeconomic Policy".

"I agree with Mr. Lemier that the idea requires deep study," Phelps said. "I think at least regional currencies should be created instead the current 166 national currencies and this is giant step toward this idea [...] that the single world currency must exist."

It is impossible to create the single world currency without political integration, Nobel Prize Laureate for Economics Robert Mandell believes.

"I do not consider it is politically possible that all nations will refuse from their currencies and that the single currency should exist," Mandell said. "Dollar is the world's giant currency, but nobody refused from their currencies and uses dollar."

Mandell said that it would be unrealistic to think the single world currency will exist.

"If we create the single currency, in this case, countries will use at an international level and without refusing from their currencies," Mandell said. "I support the single world currency idea only through such an approach."

"It is possible to do the same which the European Union did," Mandell said. "The EU created the single currency for some European countries."

But it would be possible to do so without political integration and there is not such integration in the whole world, Mandell noted.

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