River Wissey Lovell Fuller


February 2002

The Euro

It isn't so much the euro itself that annoys me but the endless talk about it (so here am I adding to it) and, more especially, the very strong opinions expressed by so many, primarily by those against it.

In the correspondence columns of the Pump there have been two or three letters on the subject, all strongly opposed to the idea that we should adopt the euro, and just last month we had a strong attack by Tony Bennett along with a plug for the UK Independence Party. One correspondent drew comparison with the decimalisation of our coinage, but surely no one is suggesting that that was a bad idea? Some opponents that one encounters through the media appear to me to be more emotional than rational.

How can these people be so sure that joining the euro would be such a bad thing? We have managed our own economy in the past but not always with success. Generally speaking, I would guess that we have made worse progress than our immediate European neighbours and, although our economy may be strong just now, I do have the feeling that it is built on sand. The decline of our manufacturing and engineering industries is a serious cause for concern in my view and there is little doubt that the unfavourable exchange rates have been a major factor influencing this decline. Whilst we have continued to plough our own furrow there have been times when sterling swung up and down against the dollar whilst the European currencies remained more stable. Speculators have made fortunes at our expense by gambling on our exchange rates; at times they have actually had the power to manipulate the value of the pound to their advantage and our disadvantage. Sitting in between the two major currencies of the euro and the dollar will make us even more vulnerable. Joining the euro would erase this problem and the problems of exchange rate variations for our manufacturers and could bring about a complete rejuvenation of our industry.

But, say the antis, we would lose control of our own economy; we could no longer determine our own interest rates, it could be a disaster. Perhaps they are right. What puzzles me though is why it is that we are so scared of losing control when the likes of Germany and France do not appear to be worried. Why did they not think it could be a disaster for them?

It is said that joining the euro would be another step towards a federal European state, but some would say 'So what? What's wrong with a Federal Europe?' A Federal Europe could be a super-power to out-super the USA; it could bring security and prosperity to all its people, it would remove all the squabbles that currently go on within the EU and would enable much more speedy decisions, rather than the endless talking shop that we have currently. Adopting the euro may be a step towards a Federal Europe but there would be a long way to go before we got there, with plenty of opportunities to prevent it happening if that was what we wanted to do. I must say that the prospect of a Federal State does have some appeal to me although it would have much more appeal if the EU were limited to our Northern European friends. The enlargement of the EU to include more Mediterranean and Eastern European countries seriously weakens the case for a Federation in my view.

We had a choice years ago to pursue a destiny outside of Europe as a separate island nation. But, in the end, rightly or wrongly we decided to join the EU rather on the basis of a reluctant pragmatism and a realisation that we would probably be richer as part of a common market. But the history of Britain's relationship with the EU is one of missed opportunities, of saying it will never work and then being forced to join later on disadvantageous terms and less able to influence the future of the Union.

I must say that personally I do not know whether or not it would be a good thing for us to adopt the euro. I understand the arguments against and in favour but that does not enable me to come to a conclusion. I suspect that in the end the pragmatic British will decide on purely economic grounds. If the majority become convinced that we will be better off financially if we do join then join, we will. All we need is to be convinced.

Ron Watts

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