As Britain breaks from the European Union, the globe worries that other European nations will break away. I traveled in Europe in the 1990’s before the formation of the European Union. Doing business in Europe was chaotic and complex before the Euro, and returning to that more isolated approach wouldn’t benefit people in or out of those countries.

Currency

Western Europe was comprised of 22 countries before the Euro. Each country managed its own currency. If I planned to visit France, Italy, and Spain, my wallet and pockets were full of franc, lira, and peseta paper and coins. Credit cards were not readily accepted. Each currency offered a different value to the dollar depending on the strength of the local economy. Currency values tended to be volatile, making it difficult to buy and sell products.

Border Checks

Before the Euro there were border passport checkpoints at each country. If I were traveling by car from France to the Netherlands, my passport and visas were checked before entering Belgium and the Netherlands. Travel and commerce were slowed as long queues of passenger vehicles and delivery trucks waited for these checks at each border. Since there were multiple routes entering any country, the governments needed to build and staff costly border checkpoints at each entry point.

Inflation

Europe was a costly place before the Euro. Each of the 22 nations negotiated individual trade agreements with the United States, Japan, and other countries. Only Britain and a divided Germany possessed enough leverage to gain a reasonably fair trade agreement. The remaining countries paid more for imports and gained less on exports when dealing with other major countries. Within Europe, intrastate trading faced similar problems. The strong preyed on the weak.

Contracts

Large multinational corporations managed independent subsidiaries in each European country before the Euro. If an American company worked with a multinational company on an agreement to sell products throughout Europe, eventually the terms of each individual European country would be negotiated into the contract. Currency rules and other country laws needed to be represented. It prolonged contract negotiations. Managing the contract was complex as individual currencies fluctuated, impacting prices, costs, and profits.

After the Euro

After the Euro, the European Union became the second largest economy in the world. The Euro is the primary currency, although Britain, some Scandinavian countries, and Switzerland also maintained their own currencies. The Euro is simpler and more stable than individual currencies. Most border crossings disappeared. My passport was checked upon arriving in Germany, and then I could visit a dozen countries without it being re-checked. This expedited travel and commerce. The European Union held its own when negotiating trade agreements. This reduced inflation. An American could negotiate a European-wide contract with greater simplicity and ease.

Brexit & Beyond

Britain’s exit from the European Union was an emotional decision by UK voters. Despite their desire for more autonomy, Britain stands alone a globalized world. Before France and others consider leaving the EU, they should remember the costly and complex environment before the European Union. It may be easier to fix the major problems, within the alliance, than to end it. No one really wants to go back to the days before the Euro.

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