Question for our UK posters...

[Throntar]

I was reading in the local newspaper this AM that Blair won the election in a landslide.

One of the things that the article stated was that immediately thereafter, the "sterling" fell upon fears that the UK would move to the Euro. Here's the question:

Why is there so much opposition in the UK (the article stated that 75% are opposed to it) to a move to the Eurodollar?

Please keep in mind that I'm from the US and don't have even a little bit of an understanding of the issues involved. Wouldn't a common currency promote greater freedom of trade...or at least ease of trade?

Thoughts?

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Now where did I leave that doughnut?!

Originally posted by Throntar: I was reading in the local newspaper this AM that Blair won the election in a landslide. One of the things that the article stated was that immediately thereafter, the "sterling" fell upon fears that the UK would move to the Euro. Here's the question: Why is there so much opposition in the UK (the article stated that 75% are opposed to it) to a move to the Eurodollar? Please keep in mind that I'm from the US and don't have even a little bit of an understanding of the issues involved. Wouldn't a common currency promote greater freedom of trade...or at least ease of trade? Thoughts?

Eurodallar LOL, thats a Hirecar firm

Well one reason not to go to the Euro is that all monetary control moves from the member states lose control of their own money issuing etc, wich is any good economist will tell you is an important tool in regulating economies. This is true when an economy is in slump, the governments via their central banks can lower the value of their currency, making exports cheaper to foreign countries, thus generating demand for goods/service and hopefully kicking the economy out of the slump.

Also on a more practical note when the UK went decimal, all prices rose as prices always get rounded to the next highest decimal value, eg. goods cost that went £3.56 from pre decimal would be re valued to £3.99.

In addition prices will stabilise across Europe, but at the highest levels, since Europe will all be able ot buy at the same price, it will be difficult for them to look abroad to get cheaper imports. Shipping from the US cripples European purchases from there.

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Holy Avenger of the OHF and part time Pinguindiebjäger

[antonius]

I'll field this one...

The Euro is bad. Within the eurozone there are a dozen different countries with different economic cycles.
1)Changing interest rates for the whole lot will affect them all in different ways - some good, some bad. Nothing can be done to manipulate the "local" economies.
2)Different countries have different ways of handling currency. How many Italian Lira?
3)The UK currency is still linked more to the US$. Recent complaints about the strength of sterling are utter rubbish - I remember the US$2= £1 days. The euro is a weak currency.
4)Single currency inevitably leads to single policies such as greater tax harmonisation. The French complain that Britain's corporation taxes are too low, giving UK companies an "unfair" advantage.
5)Greater world trade is the answer NOT localised trading blocks.

Probably a few more as well. Part of the problem is that the government lies about it all. It will happen without people noticing until it's too late.

[antonius]

Just noticed something...

Your local paper said 75% opposition? Our press insisted that Europe was only a minor election issue and even then some people are in favour of joining, making actual opposition minimal.

People I know who are vehemently opposed to the idea of a single currency still voted for a party who will take them into it. That's democracy for you.
(And I'd rather have Bush than Blair)

[Donut]

The figure of 75% is probably incorrect. The question asked was something like 'Do you think we should join the Euro?' 75% said no but within that 75% there are a number of groups. Many (including the Government) don't want to join until the economic indicators show that it is the right time to join. Others don't want to join but feel that, in the long term, we will have to if we are going to have any influence within Europe. Of those who are totally opposed to entry the fear is that we will lose control over interest rates and that decisions on British fiscal policy will be left in the hands of German and French politicians. Of course many people just have an emotional attachment to the £ as a currency.

The case for the 'yes' vote has not really been made yet, business and political leaders are pushing for membership and I think that we will join within the next few years. The phrasing of the referendum question will be very important.

Yesterday's election was the most boring in living memory. Only 59% of people voted, the lowest turnout since 1918 and William Hague (who resigned this morning) became the first Conservative leader since Austin Chamberlain in 1920 to fail to be Prime Minister whist in office.



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Save Chip - Don't let Sarah win!
Official Titterer of the Laughing Hyenas

[antonius]

Hague was only leader because Portillo lost his seat last time.
The 75% is incorrect (it's probably near a 50/50), but the fact it gets reported as that is significant.
The referundum will probably be phrased
"should we join a) now or b) when we meet the conditions?"
Of course, no-one knows the conditions except those who will make the decision.
(as in - oh, we've already met them - shock!)

Well I dont want to join but if we are going to best to join sooner and get it all over with quickly, save syears of financial upheaval. BTW if we do go for Euro all vending machine wil be obsolete :O

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Holy Avenger of the OHF and part time Pinguindiebjäger

[antonius]

If people don't want to join something should be done. No sensible debate has ever been held on this subject. Any referendum will be flawed because the party in power has a pre-stated preference. It's not inevitable because it's good, rather because no is able (willing?) to stand up to it. A political party which attempts to raise the issue gets labelled as rascist little-englanders and people vote for whichever _party_ (and how many people even know the name of their own MP) Rupert Murdoch tells them to.

[Moridin]

Why the UK won't join the Euro

1) The Pound Sterling is still a very strong currency and widely used as a medium of exchange in international trade
2) Like it was stated. To convert to the Euro requires you to give up 'local' policing of economic matters. While in the long run, a centralized government for all of Europe will be good, in the short run it causes economic turbulence and since most people look short term, this is what they see
3) The English, like everyone else, are very nationalistic. The idea of giving control of their currency over to say the Germans or French is not a pleasant one.

IMHO I don't think the UK will join the Euro until one of two things happen. The Euro gains ground and stabalizes against the dollar, or the pound loses ground against either the Euro or dollar. Otherwise it would be unwise to give up such a strong currency in favor of a relatively weaker one.

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Ever wonder if illiterate people get the full effect from alphabet soup?

[Throntar]

Thanks for the insights guys...

I guess I wouldn't be too happy about it if a conglomeration of countries tried to tell me that I couldn't use the USD, so I can understand the sentiment...

I read that 75% figure in the St. Louis Post-Dispatch yesterday (Pulitzer-owned paper). I thought that it came off of the AP wire, but I can't find the friggin' article on AP today. I thought that seemed a little high.

It said something like...

---Although Blair has won re-election, his push to move to the Euro will not be an easy path. Although he favors it, he still has to convince the other 75% of the UK that it is a good idea. (The poll was conducted by Gallup, I believe)---

Please understand that I am paraphrasing here. If I can locate the article online, I will post the link.

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Now where did I leave that doughnut?!