The Euro

[Big RICHARD]

Do you believe that tabloid drivvel about being ruled by Brussels? We now feel like we are being imposed on because we're NOT in the European single currency. We haven't got any say because we aren't in. But it might mean Rupert Murdoch sells less papers or make less profit from his papers, so he feeds us this propaganda to chew on!

[spikegifted]

Originally posted by Big RICHARD
Do you believe that tabloid drivvel about being ruled by Brussels?

Yes, absolutely! You and I, and many other members in this forum, are fortunate enough to be open minded about these things and will read about the issues from different sources and arrive at our own conclusion. However, many readers of the tabloids can't be bothered to the little bit of reading and the editors know that. So the 'newspapers' feed their readers with fear and paranoia and they all come out against anything that is not 'British'... Or anything that's 'European'...

The scary part is - when the UK satisfies all five economic tests, there will be, effectively, no benefit nor drawback on joining the Euro - so the referandum will be all down to 'emotions' for some people.

[DaBeeeenster]

You have to love it when the press plug in to good old British xenophobia...

Having said that there are a number of reasonable arguments against the Euro, other than just the emotional "euro-madness" daily mail drivel.

[Saracen]

Originally posted by DaBeeeenster
Secondly, surely the argument of interest rate control could be applied on a micro, as opposed to macro scale. If we want to control the interest rate within the UK as part of the Eurozone, why not control the interest rate within areas of Britain as part of the UK as a whole? Why not set a different interest rate in, say, Blackburn to the one in Chelsea? If a single interest rate can "work" throughout the UK which, without argument, has an enormous variety of economically productive areas, why can it not work on a pan-european scale?

Regional economics is not micro. Micro is looking at the economy at the level of the firm, the production unit. Regional is, I guess, somewhere in-between but much closer to macro than micro.

The problem with setting interest rates at a regional, or local level, apart from the administrative costs, is that mobility is too high. Firms and/or people would simply move. Sure, this is possible at a European level too, and is growing, but is still VERY small compared to mobility within the nation.

The government’s famed 'economic' tests are, in my view, sheer claptrap. They can be judged as having been met any time the government deems it convenient. The main stumbling block at the moment is that every time there is an opinion poll done, about 2/3rd's, sometimes more, of the people of this country don't want the Euro.

Why?

Dunno. But I'll speculate. People are not as naive about what the Euro means as they were about membership of the EEC. Membership of the Euro is, in my view, without doubt the first step in the last stage of a United States of Europe. And that, in my view, is what most of the people of this country don't want. Me included.

Rightly or wrongly, I do NOT want to be part of a United States of Europe. I see no significant advantages to it, and a number of distinctly undesirable elements. Undesirable element number 1 : much more centralised bureaucracy. Goodness knows the management of the EU is cumbersome and unrepresentative enough now, let alone in a United Europe.

Secondly, the benefits of such schemes never seem to get delivered, but the f'ing promises can certainly get broken. Anyone remember the vote on the EEC? What a conjuring trick that was. The government take us in, without so much as a by-your-leave from the people. And then, having got us in, they asked if we want to stay - after we've paid the entrance fees in terms of preparation costs!!!

Which reminds me - another conjuring trick looming on us - Blair's vote. We have already spent billions preparing for Euro membership, yet according to Balir, the final decision will be that of the people.

Cobblers.

If that was the case, we should have been asked before the two-faced hypocrits running the country (and those that would like to be running it, the Tories) committed us to spend those billions. The government (and opposition) have already decided we’re going in – they’re just trying to work out how the conjuring trick will be done this time.

But look at the EEC. The food mountains and wine lakes. The CAP. Fisheries policies. What a rip-roaring success the EEC/EC/EU has been. I have no problems at all with Europe as a trading block. But that vote about staying in the EEC. Those promises I mentioned?

No common borders or passports. No common judicial system. No common currency. No common foreign policy. No common military. And so on. It’s just a trade association. Yeah, right.

The problems with the Euro in and of itself are technical, and as DaBeeenster alluded to, related to interest rates. If we join the Euro, it will curtail our ability to fine-tune our economy because we won't be able to adjust interest rates the way we do now. No, Ben, the UK economy does not stand in isolation from the rest of the world and interest rates do have a relationship with other economic factors BUT, the fact remains, they are the best fine-tuning tool the government has. What are the alternatives? Fiscal control? It's a blunt instrument compared to interest rates, and VERY slow to act as well.

The economic cycles in this country are very different to those of many European nations, as is culture. You referred, Ben, to the German housing market but you know, or should, that the German housing market is VERY different to ours. For a start, the percentage of houses owner-occupied is much smaller. Or rather, mortgage-holder occupied. Which is one reason why I don't want interest rates determined in Europe - I've got one eye on my mortgage payments.

It really makes me laugh when I see some people saying that they'll save money on currency conversions if we have a common currency. The savings a puny compared to the potential costs of an adverse interest rate.

Oh, and by the way, some of my family are German too (from Bavaria). And my wife is part French. And part Irish. I have no illogical, irrational fear or dislike of other European countries or their peoples. My dislike for the Euro is because I see massive cultural differences between various European countries, like the different UK and German attitudes to housing, and buying your own home, and because I therefore see a United States of Europe as an undesirable thing - at least for us to be part of. These underlying differences make it VERY difficult for me to see any significant degree of long-term convergence other than in the very distant future.

My objections to the Euro are, therefore, part political and part practical, and nothing to do with waving the flag, with some jingoistic sense of nationalism or with whose head is on the coins. It's pragmatic.

[Saracen]

Oh, I voted "no" just in case anyone is in any doubt

[DaBeeeenster]

I was about to ask, actually

I'm surprised that the voting is so close (11 no's to 9 yes's at this stage). I would have thought the no's would be a lot higher.

Will post a response to your thread later this evening Saracen when I have more time. Shouldn't you be in that franco/irish/english bed of yours by now?

[Slick]

I wouldn't count the "yes when it become economically viable" as a definite yes. That's what I voted as I'm against it because of the negative economic consequences but wouldn't rule it out for the future if it was in our economic interest.

[DaBeeeenster]

What specifically would have to change in terms of the economic landscape for you to think it viable?

[Slick]

Well I think if the conditions of the UK economy became much more similar to those of Europe over a long period of time than interest rates wouldn't be an issue and neither really would the devaluation problem I mentioned earlier. TBH I can't really see this happening in the next 10 years though as our cultures are so different.

[DaBeeeenster]

Can anyone point me to a concise list of the five economic tests? I've NEVER seen them! People keep talking about them all the time but I have no idea what they actually say.

Slick, which areas of the mainland european economy do you think are dissimilar to the UK?

I dont see what cultures being different has got to do with it

[steve threlfall]

I think that choosing sterling over the euro because of 'what it means' to us its hertitage is the wrong way to decide.

I think that we should have the euro but not until its economically viable.

The fact is that a good many people believe that the only advantage of having a single currency is that they wont have to change their money when holidaying in europe. Some people dont want to change as they enjoy the novelty of using a different type of money on holidays.

It seem unlikely that we will ever get to have the euro, if the decision is put to a referendum at least because there are many many people who want to keep the pound. Im not neccessarly saying that anyone who thinks this is wrong to do so just that maybe not everyone is seeying the bigger picture

[spikegifted]

Originally posted by DaBeeeenster
Can anyone point me to a concise list of the five economic tests? I've NEVER seen them! People keep talking about them all the time but I have no idea what they actually say.

Try here...

[spikegifted]

Originally posted by steve threlfall
I think that choosing sterling over the euro because of 'what it means' to us its hertitage is the wrong way to decide.

I think that we should have the euro but not until its economically viable.

The fact is that a good many people believe that the only advantage of having a single currency is that they wont have to change their money when holidaying in europe. Some people dont want to change as they enjoy the novelty of using a different type of money on holidays.

It seem unlikely that we will ever get to have the euro, if the decision is put to a referendum at least because there are many many people who want to keep the pound. Im not neccessarly saying that anyone who thinks this is wrong to do so just that maybe not everyone is seeying the bigger picture

I complete agree with the 'we should have the euro but not until its economically viable'. Furthermore, we should not even drag the politics of whether to join the Euro until the economic conditions are right.

I don't know why people attach so much of their 'national identity' to its currency. Money is money. You can change it from one form to another. As long as one kind of money is fairly exchanged for another, you're not going to loose out economically speaking. National identity is something you know deep down. To suggest that national identity will be lost due to adaptation of another currency is simply saying that the country is shallow - which is not the case of the UK.

[Big RICHARD]

Spikey - Are you an economist? Your site claims that the 4 out of the 5 economic test targets have not been met, but rarely substantiate these claims with a balanced argument. Would you like to give a balanced argument?

[KraniX]

i'm all for the euro if (for example) the car i want costs 5000 euros in germany, france or the uk. what i can't understand is changing currency but still having to put up with 'rip off britain' as usual.

[Slick]

Originally posted by DaBeeeenster
I dont see what cultures being different has got to do with it

We have different spending patterns because of our cultures and there are lots of differences in markets such as the housing market which acid rainy allready pointed out.

Originally posted by KraniX
i'm all for the euro if (for example) the car i want costs 5000 euros in germany, france or the uk. what i can't understand is changing currency but still having to put up with 'rip off britain' as usual.

Which is one of the reasons I said it would be bad for our economy. It may benefit you the consumer, but it will have really bad consequences on British firms which will eventually affect you when unemployment rises etc and it will cause us to go into further deficit on our B/P.