Britain will come out of this recession before Euroland...

[Doggy Styles]

Hmm not sure. You forget that after Switzerland UK is the next place where the world puts there cash [legal or not].

Euro has its own issues - I mean look at Germany, France etc etc all going down the pan. What can they do to save themselves? There are no benefits that they can take to stop their economic decline - so why would be want the Euro?

Take no notice of AtW. He thinks of the euro as a comfort blanket - a typical 'follow the herd' attitude of, if we go down, we all go down together.

He's got no economic case for why it would help us, or Europe, except for grabbing some of Germany's reserves and I'm damn sure they'd let us do that!

[AtW]

Euro has its own issues - I mean look at Germany, France etc etc all going down the pan.

So France is going down the pan eh? Who is going to be building nuclear reactors in this country? Who is owning utilities now? Who is buying train companies? Hell, even India now owns car manufacturing in this country.

UK is in no position to afford luxury of its own currency in these conditions - it is rapidly becoming the economic equivalent of Italy of Europe, only climate is worse.

I suppose when pound falls well below euro (and keeps going down) local people might warm up to the idea

[DimPrawn]

So France is going down the pan eh? Who is going to be building nuclear reactors in this country? Who is owning utilities now? Who is buying train companies? Hell, even India now owns car manufacturing in this country.

UK is in no position to afford luxury of its own currency in these conditions - it is rapidly becoming the economic equivalent of Italy of Europe, only climate is worse.

I suppose when pound falls well below euro (and keeps going down) local people might warm up to the idea

simple solution. When £ hits parity with Euro, government sends every household in the UK a permenent marker pen, cross out the £ symbol and stick in the Euro symbol.

Sorted.

[AtW]

simple solution. When £ hits parity with Euro, government sends every household in the UK a permenent marker pen, cross out the £ symbol and stick in the Euro symbol.

But what about coins?

[BlasterBates]

The trouble is too much is made of a currency. A central bank doesn't shove a currency up or down or rates to suit a government policy, because if it did you soon end up with bigger problems than you want to solve. A central bank merely puts up rates as low as possible to keep inflation under control.

So what are the benefits of the Euro.

Well the dollar and the Euro are reserve currencies so consequently the rates needed to keep inflation under control are lower over the long term. This is because a large economic zone is much more self sufficient than an individual country which easily stokes inflation when its currency drops, also there's more confidence in it.

The second key advantage is exchange rate risk is reduced particularly as most of UK exports/imports are actually in the EU. This risk is an additional cost to UK business.

So the benefits are exchange risk costs lower, interest rates lower over the longterm. That's good for business.

[Purple Dalek]

You heard it here first. The falling pound is excellent news for the manufacturing sector which at 16% of the economy is twice the 8% of the financial sector. Britain's huge amount of public sector employees will keep demand at a highish level and the laid off financial service employees who are generally highly educated will find employment in the global economy.

Welcome to the dynamic, post-industrial economy. I really pity European manufacturing economies like Germany - this crisis will mqake companies like BMW and VW offshore manufacturing at a huge rate to maintain profitability.
Boomed!

This is why I love this forum so much. The sheer level of lunacy the trolls exhibit. None of that 'ya boo sucks' you get from them in so many other places.

[AtW]

The second key advantage is exchange rate risk is reduced particularly as most of UK exports/imports are actually in the EU. This risk is an additional cost to UK business.

This is very important for investment decisions - if someone wants to setup in Europe why put money into high tax UK with currency swings of +/- 25-30% when you can invest in Ireland with low tax and euro?

[DodgyAgent]

So France is going down the pan eh? Who is going to be building nuclear reactors in this country? Who is owning utilities now? Who is buying train companies? Hell, even India now owns car manufacturing in this country.

UK is in no position to afford luxury of its own currency in these conditions - it is rapidly becoming the economic equivalent of Italy of Europe, only climate is worse.

I suppose when pound falls well below euro (and keeps going down) local people might warm up to the idea

What I find so fascinating is that here we have some foreigner who has chosen to come and work in the UK (as opposed to his beloved France or Germany) and enjoy a lifestyle far and beyond what is clearly available elsewhere and then have the gall to to tell us that we should join the Euro on the basis that everyone else is a member.
Does it not occur to "him" that maybe the reason he is here in the first place (our immigration policies, abundance of jobs and International language) exist prcisely because we are NOT part of the Euro, and by being outside of the Euro not only can we deal with our own problems but we can also set our own rules with regards to employment law, immigration and our relationship with the USA.

Thank you Roger Bootle who explains quite eloquently why Britain should not join the Euro

http://www.telegraph.co.uk/finance/c...than-ever.html

First, the recent fall in the exchange rate has taken the pound to a competitive rate which it would be advantageous to lock in.

The current rate is 15pc below that seen on the day the euro was created in 1999, 14pc below the rate ruling when the Treasury last assessed the five entry tests in June 2003 and 20pc below the rate of two years ago.

Second, the recent sharp swings in the UK's exchange rate have supported the idea that as a medium-sized economy, during periods of global instability the UK's exchange rate is always going to be susceptible to volatility. The euro would be a safe haven.

Third, the recent problems in the UK's banking system have highlighted the potential perils of having financial liabilities that dwarf the size of the economy.

The UK is like a gigantic hedge fund. If we were to adopt the euro, we would secure the backing of the European Central Bank and the fiscal power of the whole euro-zone.

There is something in all of these arguments, although not much in the last one. I cannot see other eurozone members being keen to pour resources into supporting the City of London in a banking crisis.

Moreover, there are two strong counter-arguments. First, joining the euro would require the UK to hand over the responsibility for setting interest rates and other forms of monetary policy to the ECB.

It sets euro monetary policy to achieve economic objectives for the eurozone as a whole, not for individual member countries. Our economy is very different from the eurozone average. Consequently, for much of the time, euro interest rates would be wrong for us.

Moreover, although the ECB has, on the whole, done a pretty good job, it has displayed marked characteristics which may be very unhelpful in current circumstances.

During its 10 years of existence, it has regularly been slower to respond to events than other central banks and less willing to change interest rates as aggressively.

And just think how bad things would be now if the UK had adopted the euro at its formation in 1999, as the europhiliacs then urged.

Our interest rates would have consistently been nearly 2pc lower than they in fact were. The result would have been an even bigger bubble in our housing market, leading to an even larger collapse and a deeper recession.

Second, it is all very well saying that the pound is now at a competitive level, but if we had already joined the euro the pound would not have been able to fall to this level.

And if we were to join it now, it would not be able to fall in future recessions – or to rise, if circumstances so required, as, believe it or not, some day they might. The simple fact is that there is no right exchange rate for all seasons. The key is to retain flexibility.

Without the recent 20pc fall in the pound, the UK's recession would be much deeper and much longer. The ability of a more competitive exchange rate to boost activity is even more crucial when the capacity of lower interest rates to stimulate demand is impaired
by the banking crisis.

Consider the plight of Italy. In time-honoured fashion, it has allowed its costs and prices to rise faster than the eurozone average.

The result has been a massive loss of competitiveness, both inside and outside the eurozone. Traditionally, Italy got out of this sort of mess by devaluing. Now it is stuck with having to grind its relative costs down through the effects of depression.

It is all very well saying that a lower exchange rate imposes no discipline and the virtuous path is to suffer. For Italy, the virtuous path could be the road to disaster. If we were in the euro, that could be our fate too.

The key reason why the UK emerged from the Great Depression of the 1930s earlier than most major economies was that it left the Gold Standard early, and subsequently enjoyed a significant boost from a lower exchange rate and lower interest rates.

Similarly, the UK managed to shrug off the recession of the early 1990s only because the exchange rate fell sharply and we were able to set our own interest rates after the pound was ejected from the Exchange Rate Mechanism in 1992.

The urge to throw in our lot with the continentals and let those nice, clever chaps in Brussels or Frankfurt manage our affairs strengthens whenever we experience one of our periodic bouts of national depression and loss of self-confidence.

The drive to join the EU in the first place originated in this way, and so did our membership of the ERM.

We are now passing through another cycle. Until recently, we suffered from national hubris – the end of boom and bust; our marvellous fiscal rules; our wonderful MPC; our outperformance of the continental economies leading to gross over-confidence, to the point where the Prime Minister took glee in lecturing our European friends on how to run their economies. Then disaster.

It is now surely clear that the Treasury, the Bank and the Financial Services Authority have made a gigantic Horlicks of managing our economy.

They, and we, are bound now to suffer from a deep depression of mood as well as economic performance. In such a frame of mind it is unwise to take radical decisions. The wise thing to do is to carry on until the mood lifts.

As one of those who was not taken in by the Brownian delusion of economic transformation, and has not experienced the associated yo-yoing of moods, let me say this: the eurozone is not going to have a picnic either.

Indeed, the strains will be intense and it is far from obvious that the ECB will be as imaginative and urgent as the Bank of England in seeking cures.

Grim though things will be here, eventually they will get better. Out of the debacle of the ERM exit, came a period of genuinely successful UK economic management and good economic performance.

It can happen again – provided that we retain control of our own affairs.

[AtW]

What I find so fascinating is that here we have some foreigner who has chosen to come and work in the UK (as opposed to his beloved France or Germany) and enjoy a lifestyle far and beyond what is clearly available elsewhere and then have the gall to to tell us that we should join the Euro on the basis that everyone else is a member.

There is freedom of speech in this country that I love very much.

This means that I am entitled to an opinion just like you are and I don't like people who tell me that I for some reason can't exercise this base human right (current laws for which came from Europe by the way).

Does it not occur to "him" that maybe the reason he is here in the first place (our immigration policies, abundance of jobs and International language) exist prcisely because we are NOT part of the Euro

Euro has got nothing to do with it. I came to this country even before Euro was created.

The choice of UK was in a way random, it had to be English speaking country so it was either to be UK/Canada/USA. UK was closest and I was lucky to be in exchange program (UK Uni was paid good price for it).

In any case I don't see any link between me either immigrating to this country or being born here on things that are in best interest of this country - I believe being in euro is better for UK and the case for it is becoming stronger with every pound fall.

--

I am actually FOR UK keeping control of its borders, ie not joining Shengen - this is on the grounds of geographical position of UK that makes it useful additional security measure.

[BlasterBates]

Well it will certainly be interesting to see how the UK gets out of this one. I fear those that hope that major international corps, such as Ford, GM or Bank of America will be throwing millions of pounds into Britain, because the pound is devaluing maybe sadly mistaken. In fact one begins to wonder whether the economic miracle after Britains ejection from the ERM was a miracle or just a giant Pyramid scheme, that happened to get going at the same, due to the "Big Bang" in 1988. The UK's economic success looks decidely "frothy" and lacking in substance.