We should thank our lucky stars we escaped the budding euro-zone disaster

[minestrone]

So why don't we break up into smaller economies? Maybe Oxfordshire should form its own currency, and we'd be able to react quickler, cheaper and without all the socialist northerners, whinging Scots, and London bankers dragging us down.

Of course it'd be a right PITA having to use a different currency to buy coffee accross the border in Bucks, but that's only for cosmopolitan poser wannabes and so can be discounted as not significant.

Seems to me that different currencies and variable exchange rates are a barrier to trade with the very people we trade with the most. That's why I'm in favour. And we don't know how different the current Eurozone situation would be if the UK had been part of it. Maybe the whole Eurozone would be doing better, or maybe we'd have used them to dilute some of our tulipe.

Reasons why people are against the Euro:

1. They have an island mentality and think Johnny Foreigner is inferior.

THE END.

Let's do it, I am moving to Shetland, they will have use for a Mechanical Engineer, 20,000 people owning the rights of oil fields making 20 billion a year for the UK.

[VectraMan]

1. Many don't have experience or knowledge of big vs small organisations - small react quicker, cheaper, and have less competing interests - which reflects on economies as well.

So why don't we break up into smaller economies? Maybe Oxfordshire should form its own currency, and we'd be able to react quickler, cheaper and without all the socialist northerners, whinging Scots, and London bankers dragging us down.

Of course it'd be a right PITA having to use a different currency to buy coffee accross the border in Bucks, but that's only for cosmopolitan poser wannabes and so can be discounted as not significant.

Seems to me that different currencies and variable exchange rates are a barrier to trade with the very people we trade with the most. That's why I'm in favour. And we don't know how different the current Eurozone situation would be if the UK had been part of it. Maybe the whole Eurozone would be doing better, or maybe we'd have used them to dilute some of our tulipe.

Reasons why people are against the Euro:

1. They have an island mentality and think Johnny Foreigner is inferior.

THE END.

[centurian]

I have always understood them:

1. Many don't have experience or knowledge of big vs small organisations - small react quicker, cheaper, and have less competing interests - which reflects on economies as well.

2. Many are swayed by insignificant things, like buying a latte in two different capital cities with the same coinage. Wow.

3. Many like themselves to be seen as cosmopolitan people-of-the-world.

4. A very small minority do so much travelling and movements of money that they have significant exchange costs - a selfish and trivial factor in the grand scheme of things, but understandable from their point of view.

5. Socialists, for whom the single currency is necessary for the EU state.

6. Most simply don't think things through.

But even those that only went on holiday once per year were thinking "Ah, it will save me commission..." and that was their main motivation for thinking it was a good idea.

Never mind that to save about a tenner per year, we would have to give up control of our economy....

Not that we've done a splendid job of managing it ourselves... but I agree with the OP that we would be in much deeper tullip if we were in the Euro right now.

[sasguru]

Do keep up at the back!

http://forums.contractoruk.com/gener...hlight=exports
http://forums.contractoruk.com/gener...hlight=exports
http://forums.contractoruk.com/gener...hlight=exports
http://forums.contractoruk.com/gener...hlight=exports

[BlasterBates]

hmm...

[AlfredJPruffock]

If you surrender the control of Money then you surrender your entire political system - that is why the UK is wise to preserve Sterling.

[Cyberman]

I never understood why anyone ever wanted to join the Euro?

... because most politicians are economically illiterate and also a massive federal government ensures a nice gravy train for those at the 'top'.

[d000hg]

I never understood why anyone ever wanted to join the Euro?

To the average joe, it comes down to a choice between convenience and patriotic tradition. They have no understanding of currency devaluation, but they do like the idea of going on holiday without having to mess about with changing money into different currencies.

[Sysman]

Actually I would like us to be part of the Euro for purely selfish reasons. It would reduce the cost of my doing business and taking leisure time in the rest of Europe without having to arse about with changing currencies which is a complete pain.

Obviously I'm not in any way trying to justify my preference in anything other than selfish terms as I feel no attachment to Sterling at all and I certainly can't justify it in economic or political terms.

WHS. It would have made my life a lot easier (and cheaper) over the years. Currency fluctuations can lose you a market or make the difference between profit and loss in an amazingly short period of time..

[Doggy Styles]

I never understood why anyone ever wanted to join the Euro?

I have always understood them:

1. Many don't have experience or knowledge of big vs small organisations - small react quicker, cheaper, and have less competing interests - which reflects on economies as well.

2. Many are swayed by insignificant things, like buying a latte in two different capital cities with the same coinage. Wow.

3. Many like themselves to be seen as cosmopolitan people-of-the-world.

4. A very small minority do so much travelling and movements of money that they have significant exchange costs - a selfish and trivial factor in the grand scheme of things, but understandable from their point of view.

5. Socialists, for whom the single currency is necessary for the EU state.

6. Most simply don't think things through.

[TykeMerc]

Because deep down they're stupid cowardly sheep who think there's strength in numbers so they can get away with unsound socialist economic policies.

Actually I would like us to be part of the Euro for purely selfish reasons. It would reduce the cost of my doing business and taking leisure time in the rest of Europe without having to arse about with changing currencies which is a complete pain.

Obviously I'm not in any way trying to justify my preference in anything other than selfish terms as I feel no attachment to Sterling at all and I certainly can't justify it in economic or political terms.

[OwlHoot]

.. I never understood why anyone ever wanted to join the Euro?

Because deep down they're stupid cowardly sheep who think there's strength in numbers so they can get away with unsound socialist economic policies.

[Cyberman]

At least one good thing that Brown did was not to take us into the Euro !!!

[BrilloPad]

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

We should thank our lucky stars we escaped the budding euro-zone disaster
Not so long ago, political leaders in the euro-zone looked at the economic disaster brewing in the United Sates with insouciance – and even a touch of schadenfreude.

At long last, those profligate Anglo-Saxons were getting their comeuppance, while the euro-zone, whose financial system had long been more prudent, and whose consumers, on average, had been positively frugal, would sail on serenely.

That was then - in the age of decoupling. How different things look now! The euro-zone is in an extremely deep recession. Q4's 1.5pc quarterly fall in GDP was by far the sharpest since the creation of the single currency. In fact, output has never fallen this rapidly since 1970, and probably not since the war. Euro-zone GDP this year looks like falling by 4pc. Next year, further contraction seems likely.

So why has the euro-zone been hit so hard? There are five different sources of difficulty, with differing importance in different countries. The first is exports. All around the world, trade has collapsed. In the case of Germany, the experience has been made more acute by the country's specialisation in big ticket consumer items and capital goods, both of which have been hit very hard by the financial implosion, and by the country's heavy involvement with eastern Europe, where the financial excesses have been extreme. This region is now plunged into a dire crisis. Overall German exports have already dropped by nearly 10pc year-on-year, while the output of the export-dependent German industrial sector is down by almost 20pc. The moral is that it isn't good enough for a country to be prudent itself. To be really safe, the countries with which it trades heavily have to be prudent as well.

Ironically, given that so many commentators were arguing that the UK was so badly placed because of our greater reliance on financial services and our small manufacturing sector, it looks as though Germany will do worse this year than us – and largely because of its heavy reliance on manufacturing.

Second, although euro-zone average house prices did not rise particularly strongly and consumer finances were not pushed to the limits, this is not true of some individual member countries. Ireland experienced the largest property boom of any country in the developed world and is now experiencing the equivalent crash. Spain was, and is, not far behind.

Third, some parts of the euro-zone are acutely afflicted by the banking crisis pure and simple. Ireland is an egregious case. In some euro-zone economies, domestic banks' liabilities are up to four times the size of GDP and banks have built up exposures to the developing world equal to around 40pc of GDP. Accordingly, with the financial system weakened, access to new finance is difficult.

Fourth, poor productivity and strong wage growth has led the Club Med economies' competitive positions to deteriorate dramatically. As a result, current account deficits have ballooned - to 10pc of GDP for Spain, 12pc for Portugal and 14pc for Greece. Italy's deficit is "only" 3 1/2pc of GDP, but she has other fish to fry. Meanwhile, Germany sails on with a surplus of over 6pc of GDP.

Since the Club Med countries are no longer able to devalue, a prolonged period of wage restraint is the only way to improve competitiveness. But in the non-Teutonic parts of Europe, such restraint does not come easily. As we in the UK experienced in the 1920s, if the exchange rate is out of line with the domestic cost level then you face umpteen years of depression and a debilitating struggle to force costs down.

Fifth, with unemployment soaring and consumer confidence at a record low, even in the countries with a history of prudence, consumers are now retrenching and thereby providing another source of recession.

On top of all this, a fiscal crisis is building. Italian and Greek public debt is close to 100pc of GDP. The markets fear that these governments, along with those of Ireland and Austria, could be forced to default. After all, even before this crisis began, in several cases, government debt levels were at the very limits of acceptability. Now governments face not only the normal fiscal costs of recession but also expensive bank bailouts or nationalisations.

Given all this, it is hardly surprising that there has been talk of one or other member countries leaving the euro. The customary riposte is "how would a country like Italy manage outside the euro?" But I wish someone would tell me how a country like Italy will manage inside the euro.

This gives rise to an acute dilemma for the euro-zone. Worries that the euro-zone authorities are powerless to provide support to a troubled government have been exaggerated. Admittedly, the so-called "no bailout" clause prevents individual governments from taking on other governments' debts. But it does not prevent the European Commission from providing support to a government on the brink of defaulting. Indeed, Article 100 of the Treaty Establishing the European Community explicitly allows the Commission to provide assistance to a government in severe difficulties if it is due to "exceptional occurrences beyond its control". What's more, the EU's monetary affairs commissioner, Joaquín Almunia, has already suggested that the Commission stands prepared to provide such support. Moreover, Germany has indicated that it would back any such action.

In reality, though, the euro-zone is caught between the devil and the deep blue sea. If only desultory financial support for weaker members is forthcoming, and a member government defaults, the implications could be dire for both the euro exchange rate and internal euro-zone cohesion. On the other hand, if massive financial support forestalls such an outcome, how will this play with the burghers of Mitteleuropa? How will it be possible to maintain political support for the euro in particular and European integration in general?

During our recent bout of British gloom, many of the usual suspects were crawling out of the woodwork to make again the case for joining the euro. Now, they say, the exchange rate is right and we should lock it in. Yet they also wanted us to join some while back, when the exchange rate was 30pc higher. The truth is they always want us to join the euro. They must be mad. The issue is not about the right rate, which is changing all the time, but about flexibility.

In the current crisis, we in the UK have two major things going for us: first, we are able to enjoy a competitive exchange rate; and second we are able to set our domestic monetary policy in pursuit of our own interests. Heaven help countries like Italy which have no such way out. We should thank our lucky stars that we have managed to escape the budding economic and political disaster across the channel.
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I never understood why anyone ever wanted to join the Euro?