COLLOQUIA - Economic History of Europe
Mr. Paulo Colini
Date: 7 December, 2010
Last week's proceedings at our B School were punctuated by a pleasant surprise for students and faculty alike, as Mr. Paulo Colini of University of Trento, Italy visited Amrita School of Business as part of student exchange program. Part of the Student Exchange Program that ASB is part of, University of Trento is one of the most prestigious universities in Italy and Mr. Colini has headed the university now. An economist turned administrator, we had an exclusive chance to have an interaction with this distinguished member of the international teaching fraternity.
With the crisis in Ireland on centre stage in the economic world, the students were curious about the happenings and the economist from the European Union had all the answers for us. Mr. Colini discussed the origins of the Euro and why and how the European government felt, recognised and implemented the idea of a common currency. He described the chain of events from when the common currency idea was theorized in January 2001 and when it was introduced in about a year's time.
Mr. Colini explained the risks a country faces when it adopts a common currency, how monetary and fiscal policies need to be tailored as the country cannot tweak interest rates or inflation to suit its needs as the authority now did not rest with them. Now the discussion turned automatically to the Greek and Irish crises as Mr. Colini explained what challenges each economy faces now. As an example of a country's economy failing due to chronic financial mismanagement, Mr. Colini cited Argentina's hyperinflation woes as an example, where prices for goods sometimes changed four times in a single day.
Mr. Colini now explained the nuances of the European Union's currency policy, their rules and regulations, the fiscal policy measures that were devised exactly for such situations as the Irish crisis and how Germany was reluctant to join the Union. It is mandatory for a monetary union to have a common currency; he explained and added that the Irish had actually been one of the earliest to benefit from the Unionisation.
As the discussion went into the final phase, there were a lot of questions and Mr.Colini patiently answered them all, as he explained how the European Union was one country when it came to international debt and that it will take time for the Euro to gain as much popularity on the international market.
It was a great experience for the students and the recognition of the fact that he took the time off to have a session with us was evident on young faces.
By - Sairam Krishnan