European Currency

[suityou01]

That's odd, because the last time I looked the pound was worth considerably more than the dollar, and more than the euro.

The macro-economic forces on the euro mean it is doomed to fail unless there is complete fiscal and monetary unity. In other words one, basically country. That will only happen if it is forced on people because poll after poll in most EU countries shows there is no majority appetite for that. And if you look at what is happening in the EU.....that is precisely what is being attempted.

And if you don't believe me, compare Ireland to Germany. Ireland is virtually bankrupt, has no liquidity pretty much anywhere and is desperate for near zero interest rates. Germany has been running a buget surplus so does have available liquididy, and zero interest rates would weaken their economy further.

And yet there can only be one interest rate. And since the EU is basically a franco-german club, the interest rate is set to benifit the german economy so countries like Ireland can whistle.

Now does it make sense why the (thankfully - still) majority of people want nothing to do with the Euro?

Ireland is also the only Country left in the EU that has not ratified the Lisbon treaty. Once they ratify it, their economy will improve.

HTH

[stackpole]

Because of course the people in charge of our currency are doing such a fantastic job. Nobody can say with any certainty how the recession would have panned out for Britain if we had been part of the Euro all along. We might have lost control of interest rates, but then maybe our currency would still be worth something.

That's a hollow argument. Governments come and go, in Europe as well as the UK. Some will handle it well, others badly.

The important thing is to stand or fall by our own decisions, so that we cannot blame anyone else. And if our government handles our economy badly we can vote them out, as we will be doing soon.

However, we cannot change the European Commission, they aren't even elected. And nor would the UK have much influence on European fiscal policy. With 20+ other countries involved, it would be impossible. We'd just do what we're told.

I'm not happy with that. The UK must have the ability to run its own economy as it sees fit, for its own circumstances and priorities.

I don't claim to understand economics, but it seems to me that fluctuating currencies are a barrier to trade, and having a barrier to trade with your major trading partners is fool hardy at best.

If Europeans didn't want to trade with us they wouldn't. Fluctuating currencies are a two-way street - sometimes a movement hampers a deal, sometimes it helps it. But if fluctuating currencies are all you are worried about, you can run your business in euros, as someone above says they are doing. Or whatever other currency.

[VectraMan]

That's odd, because the last time I looked the pound was worth considerably more than the dollar, and more than the euro.

You know that's nonense. If we'd joined back in 2000 when the £ to Euro was more like 1.6, our currency would now be worth much more than it currently is.

And yet there can only be one interest rate. And since the EU is basically a franco-german club, the interest rate is set to benifit the german economy so countries like Ireland can whistle.

The flaw in that argument is that the Euro couldn't fail to be heavily influenced by an economy as large as the UK joining. You can't hold up the current position as evidence we shouldn't have been a part of it because the current position would have been radically different if we had been part of it.

If Europeans didn't want to trade with us they wouldn't. Fluctuating currencies are a two-way street - sometimes a movement hampers a deal, sometimes it helps it.

I'd say instability always harms trade. An exporter might get a temporary boost in demand because their currency has fallen, but they than have a problem of being able to meet the demand. They can't take on new workers, build a new factory or whatever because the boost is temporary and completely beyond their control. Next month on a whim of the currency traders, their product is now suddenly much more expensive abroad and there's no demand.

And a British company can't operate in Euros, unless it can negotiate with all its workers to be paid in Euros (pretty unlikely) and all its suppliers to operate in Euros. The only sensible solution to all this is move your factory to somewhere within the Eurozone and make your British workforce redundant.

But as long as we have control of our interest rates.

[expat]

Perhaps it's slightly balanced out by the Barnet formula that gives every person in Scotland an extra grand a year.

Like the EU rebate to the UK?

But the EU rebate is just a way of giving back to the UK a part of its contribution, which otherwise would be higher than it should.

But the Barnett Formula is just a way of giving back to Scotland a part of its contribution, which otherwise would be higher than it should.


I've got you there: the parallels are overwhelming. Only gross stupidity will get you out of this argument. Hmmm

[HairyArsedBloke]

Give the sweaties that horid mucky oil stuff, tell 'em to give us back our nuke's, and make them go it alone.

That'll learn 'em.

[Cyberman]

Because of course the people in charge of our currency are doing such a fantastic job. Nobody can say with any certainty how the recession would have panned out for Britain if we had been part of the Euro all along. We might have lost control of interest rates, but then maybe our currency would still be worth something.

I don't claim to understand economics, but it seems to me that fluctuating currencies are a barrier to trade, and having a barrier to trade with your major trading partners is fool hardy at best.

You certainly do not understand economics and the implications of losing control of our currency and interest rates. Any problems with the economy have been due to an incompetent government and not the pound.

Having the pound is no barrier to trade as has been shown over the past few years as we have continued to trade with no restrictions due to our currency. Meanwhile, I suggest you watch the demise of Ireland etc due to being locked into the inflexible Euro.

[Cyberman]

Ireland is also the only Country left in the EU that has not ratified the Lisbon treaty. Once they ratify it, their economy will improve.

HTH

That has to be the most illogical reasoning of the day !!

[HairyArsedBloke]

Meanwhile, I suggest you watch the demise of Ireland etc due to being locked into the inflexible Euro.

Er, wot?

[expat]

Give the sweaties that horid mucky oil stuff, tell 'em to give us back our nuke's, and make them go it alone.

That'll learn 'em.

Look'ere, HAB, I'm baiting Cybertwat, don't take it personally, OK?

[Cyberman]

Er, wot?

Yep. The situation of being locked in the Eurozone means that Ireland's abilities to extract itself from worldwide recession are extremely limited. No control over interest rates and also a strong Euro, while the UK has been able to weaken the pound to increase its international competitiveness and reduce interest rates much earlier and more dramatically to boost the economy at home.

Thus, we are at least seeing a few 'green shoots' while Ireland certainly is not.