Econ

Loosing their own currency and price rises would probably be a couple of the main reasons that the 'man in the street' might give. In Spain many items at 100 pts went to 1 Euro (66% rise overnight!) that was the first day and prices in general haven't stopped going up since, and not by 2 or 3 pesetas at a time as they used to!

I think people take a lot of pride in their currency, or certainly the british do and I think that is a good thing to be honest.

If the UK went into the Euro then prices in the UK would soar also.
Spain went from being a very, very cheap country to live in to getting very close to UK prices within 6 years on many things, not * all * to do with the Euro but personally I think it has a lot to answer for here.

Veleta

Mind you, if things that were 1 GBP went to 1 Euro overnight that wouldn't be so bad!

You can but dream.

Econ

I wouldn't put money on that!

bigglesworth

A bit of background. Britain has had the same currency and the same legal system for 1000 years. Most continental nations, by virtue of invasion, conquest and marriage etc have not. Many have borders that have only been established in the nineteenth and twentieth centuries. It is a bigger issue for the British than anyone else, because we have absolutely no experience of such a changeover, not even in deep ancestral memories. It is also simply less important for Britain.

Britain is a world trader. Although 50 percent of our exports go to Europe, that percentage has hardly changed despite the expansion from 7 to 9 to 15 to 27 nations. The world market is simply more important than a fading European backwater, and this can only grow. It is long past time that Europe recognised its position as a rapidly declining post-imperial power of increasing irrelevance in the modern world.

Germany, it is true, is a larger exporter, but the overwhelming majority of German exports are to continental Europe. The Euro is simply not as significant for Britain as it is for the European mainland who, because they share borders, do most of their trade with their neighbours. You can run a lorry or a railway wagon from one end of Europe to another without needing to unload it. The same is not true if you have to put your exports on a ship - we see little difference between exporting to France and exporting to China or India.

Then there are the very real practical issues. How can you run a single currency when you have twenty seven Treasuries and twenty seven Finance ministers? Only by EXPLICITLY stating that both political and economic sovereignty rest solely in Brussels. And try getting that past Germany!
Euro fans may believe that they have a single currency but in fact they have a common one, sharing common notes and coins. (If they had the same currency, it would not be possible for the markets to demand 150 pips more for long term debt in Club Med economies than for the Nordic). The notes are guaranteed by the individual member states. There is no ECB guarantee, only a dependent one. (There is already a premium for 500 Euro notes issued by the Bundesbank).

The real test of a currency as a reliable medium of exchange is how it copes with reverses. The current economic turbulence is the first real test of the Euro's viability, and judged on it's performance so far, the omens are not very promising. Sarkozy is busy grandstanding with other peoples' money, Merkel refuses to accept that a common currency demands a common approach to each others' problems, and neither of them seem to give two hoots for Greece Italy and Spain.

(The truly interesting question is how much of a premium the markets would demand for British debt were we already in the Euro? Probably enough to break the system apart without the major reforms necessary to convert a common currency into a single one.)

I agree with many of the cynical comments that this Government (and the next of whatever hue) will try to use the financial crisis to trick the UK into the Euro. I am not sure the other European nations are quite so daft as to want us in, given that our levels of public debt now make Italy look parsimonious.

And underlying it all is the simple fact that as a people we know our government(s) is lying to us and has been doing so for 35 years. What we don't know is WHY? We therefore are deeply suspicious of their motives.

gaelgoir

Wow Bigglesworth! Thank you for such a comprehensive reply.

I happen to agree with most of your obs. I live in Ireland now, and we too are an island nation, more to the West though, so therefore a bit more isolated than Britain, and we don't have a Eurotunnel!

Still, realistically our major export market is Britain, that is why (amongst other more pressing things) we are suffering with the drop in the Pound. Also, if we, and other small nations could have increased our interest rates during the boom years then maybe the current crisis would have been a bit less daunting. If we had also been able to devalue our currency, exports to places like Britain would have been so much easier financially.

Lots of food for thought. Still, I love going anywhere in the Eurozone with my euro in my pocket and my credit card statement and ATM withdrawals with no extra charges. I can also compare prices in my own country instantly with those in Eurozone. Not the very best reason for the Euro, I know, still not a bad one either!

steviedeluxe

I'm not sure I follow your argument here. In the UK it's quite possible for someone living next door to someone else, being charged a different rate on their credit card or overdraft, according to their personal financial circumstances. They still earn (and pay out bills) in the same currency though.

Actually this is one of the better arguments for a single currency. I wish the "for" brigade would come out with better arguments instead of the "the pound is falling let's join the Euro" one, which doesn't convince me at all. Going off at a slight tangent, I've heard that Northern Ireland shops are now stealing/enticing all the Irish shoppers from south of the border (exchange rate plus VAT fall). It must be very precarious running a shop within driving distance of the border - a change in exchange rate could put you out of business overnight.

Lionda

Hey......don't catagorise

steviedeluxe

Actually I think he's repeating an earlier quote on these boards. someone tried to claim that it's the Spanish who have no concept of saving.

vox populia

You scaremongers!!
Been a Financial Advisor 25 years, good times bad times, Worked currencies investments ect got the T-Shirt, let me explain, INFLATION IS FALLING, SALARIES ARE STILL RISING, HOUSE PRICES HAVE NOT FELL TO THE PROJECTED FALL, BARGINS IN THE SHOPS LIKE NEVER BEFORE, So while it may not be all jolly, it may be a time to be a little less melancholy!! The €URO will come back because, firstly, the sterling would never be devalued to Parity or convert to another currency due to Imperial reasons and secondly, Germany the Strongest economic country in the Eurozone have made it quite clear that dealing with the pound sterling would be totally unacceptable, they can be very stubborn you know! Having worked in a Bank in Hamburg!!! Keep the faith, Ombhama U.S.A. WILL sort all economies out and then everyone can use thier credit card again!! Whats the problem?

jdr

Yeah right. ;-))

vox populia

JDR, You say right?€ are you agreeing with one??€?

Beachcomber

I, for one, have yet to agree with any financial advisor I have ever met. As far as I am concerned they come marginally higher that a lawyer in the hate list.

A financial advisor is someone who takes your money and invests it until it is all gone.

poshnbucks

A stockbroker is someone who takes all your money and invests it until it's all gone.' Woody Allen................hmmmmmmm no credit given

poshnbucks

http://www.timesonline.co.uk/tol/mon...cle5336573.ece

jdr

No, I said that meaning, I wish it is just as simple as you say. ;-)