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"The British Government made a major mistake in not joining the Euro at its outset" Do you agree?

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Introduction

"The British Government made a major mistake in not joining the Euro at its outset" Do you agree? With the beginning of the EMU project in 1999, the British government decided it best for the country to remain outside this controversial and arguably risk bearing project. Many have criticised this decision as part of the ongoing saga whereby the UK remains outside a European project and eventually seeing the benefits decides to join. This was the case with both the economic community and the ERM and when we did join the structure of the project had already been established. However the clear failure of the ERM on white Wednesday, reflecting in essence the failed preparation for monetary union, illustrates how volatile such a project can be. The UK government lost billions of pounds worth of foreign currency reserves in the ERM project and it should never make the same mistake again. Furthermore, the economic community project has not been anywhere near as successful as predicted. With the loss of our free trade with our Commonwealth partners, the UK effectively sacrificed the last remaining threads of not only our cultural history with those nations but our sense of dignity in supporting those nations economically that once made the UK a great power of the world. Now we are effectively stuck inside the European project with a common external barrier to all imports from the rest of the world, that not only raises the price of goods for consumers but has effectively placed Europe in a status of Nazi style "self determination". ...read more.

Middle

Looking ahead, the study finds that the UK economy would be far more vulnerable inside the Euro to shocks in consumer confidence affecting the housing market also and the inadequacies of a proper interest rate to combat these effects would cause potential deflation and higher unemployment. The EMU does however have its supporters, Some believe that with over 50% of our trade within the EU the benefits to business from the single European market would be maximised. It is true that transaction costs would no longer exist and it is estimated that the UK could save around �3.6bn at today's prices. The EMU would also provide a further boost to trade and investment by removing exchange rate uncertainty. The Euro may also ensure that foreign investment continues to flow into the UK. This is especailly so from the likes of far eastern countries such as Nissan and Toyota who threatened to move to the European mainland unless the UK adopted the EMU. However on the outside of the Eurozone the UK has still managed to retain its leading position as top country for foreign investment. It may be far better to be on the inside of decisions about European interest rates, that inevitably affect us being a part of the European market. As Lyndon Johnson former US president once said, "It is better to be on the inside pissing out than to be on the outside getting pissed upon!" ...read more.

Conclusion

"In a society that is and wants to be democratic, you cannot give an important policy instrument to a group of un-elected technocrats and not have them be open and accountable", Professor Willem Buiter, former member of the Bank of England's Monetary Policy Committee, Sunday Times, 23 April, 2000. "There's no way that the rest of Europe wants to be standardising all the income and corporate tax rates across Europe", Tony Blair, Helsinki Summit, November 1999. "Just 6 months before the European Unions biggest expansion the 10 newcomers are still mostly corrupt disorganised and alarmingly ill prepared for the cold blast of market competition" "The process of monetary union goes hand-in-hand, must go hand-in-hand, with political integration and ultimately political union. EMU is, and always was meant to be, a stepping stone on the way to a united Europe." Wim Duisenberg, President of the European Central Bank, November 1999. All this talk of the single currency, and harmonisation begs one further question. Why is there no talk of a single language? This would make it even easier for trade etc? The obvious choice would be English - but I can't see the French or Germans allowing that! Some people seem to genuinely believe that we should join the euro simply to avoid the hassle of changing money when we go on holiday. What is the problem? When abroad you go to cash machine, remove card from wallet, enter PIN, enter amount, and hey presto euros. If people don't like the USA's world domination plans then a strong, united Europe is the way to stop them. ...read more.

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