Is the pound worth saving?

[Leg of lamb]

Now that 12 members of the EU use the euro, and seem no worse off, does it appear pointless staying out?

[TheHitMaker]

Check with Germany about being no worse off - they are having major problems and trying to work out how to break the 'Euro' regulations having been the country that was most insistant that they were kept to. I still think we should join the Euro, but it is not all perfect!

[WendyW]

Just wait until the new countries join and then see what happens to the Euro

[5029]

We get ripped off every time we try to change currency because we are one of the only countries that has to do it, and therefore they charge us high exchange rates

[lisaj]

I thought the Euro was pegged to the dollar? Whether or not this is true, they've certainly run hand in hand for the past couple of years at least, and we all know how strong the pound is by comparison. I personally have a laugh everytime I go away because the prices are almost the same, but in dollars or euros, and I suddenly have 50% more money that everybody else.

[PaulYukochan]

The problem is that the main control of the economy that the government uses is the level of the interest rate. Within any curency there can only be one interest rate. So the same interest rate would apply in England, Germany, Italy, etc etc. This causes a big problem in regional economies. At present in Britain, some areas have relatively high unemployment, whilst some have almost none, ideally the interest rate would be lowered in areas of high unemployment, but raised where there is near full employment (to stop inflation). Unfotunately, as we all use the pound, the interest rate must be the same, so some areas are left in economic depression. Within Britain, eveyone speaks the same language and it is easy to move around and get a job in another region, so the problem is not so serious. Within Europe under a single currency, this has not been as easy. The clearest example was in the first year or so of the Euro. Spain, Germany, France and Italy 's economies were floundering, especially Spain. All had relatively high unemployment, falling investment, hardly any growth ( near depression) and they needed the interest rates to be very, very low, in order to stimulate their poorly run economies. Ireland however, was near booming, and was suffering from the side effect - inflation. Ireland was in desperate need of higher interest rates, which of course were not forthcoming, the result was price inflation in Ireland. THis is very simplified but it shows how economies whose economic cycles are out of sync find it very hard to exist under the same interest rate - especially when EMU leaders had agreed that they wouldn't use short term tax rises and decreases to stimulate their economies in the place of interest rate controls. It would seem foolish to sacrifice control of the economy just for a few pounds saved on holiday money every year, especially as I don't go away to the EMU zone much anyway :)

[PaulYukochan]

One other argument against the Euro and EU as a whole is that it excludes many of the worlds poorer nations from trading with many of the worlds richest. The EMU will also pressure other countries and regions to form trading blocks and monetary unions. Maybe the South America Monetary Union. Or the South East Asia Monetary Union. IT seems people who are for the Euro often are happy that the Euro will be 'bigger' than the US dollar - maybe some envy of the Americans is a big factor for some countries who miss ( or who never were) being a major world power to want to gang up to form a new one?

[straz]

I think Britain joining the Euro is no the biggest non-event around. The Government is commented to referendum, which it WILL loose. Because the Murdock Media Empire will go into Anti-Europe Propaganda overdrive preying on peoples fears & prejudices. I can see the argument of interest rates being set in Frankfurt not being best tailored to the needs of the British economy however the Bank of England's interest rate policy at present revolves around keeping house prices down in the Southeast of England with very little regards to the rest of the country & what's left of our manufacturing base

[Moog]

I always say look after the pennies and the pounds will look after themselves!

[Leg of lamb]

My my, what a can of worms. I submitted this question partly because I am not wholly convinced one way or another. But what strikes me most with this debate (here or anywhere else) is the level of xenophobia it raises. This is not some Johnny Foreigner we're against but a union of nations that we are an equal member of. The main aim of the EU, from the Treaty of Rome on, was to promote peace and prosperity in a continent that had been at war for most of the past 1000 years. Of course some see the introduction of a single currency and a unified interest rate as going too far. But staying out because we not quite sure if it is going to work, perhaps we'll just wait and see how "they" get on etc etc, stinks of cowardice and mistrust. These other counties are our main business partners and consumers, and I believe we should be sharing the burden and benefits equally. This is not pollyanna thinking but common business sense. Obviously some of the member countries will have economic difficulties sometimes but haven't they always? The EU contains 4 of the G8 i.e. four of the biggest single economies in the world. I would find it hard to believe that a single common currency could collapse and/or devalue to such an extent that the whole institution would crumble. I genuinely believe we need to have a bit more faith and belief in a closer union.

[PaulYukochan]

They werent our main business partners before the EC and EU treaties put the rest of the world at a disadvantage in trading terms.

[louisecheese]

KEEP BRITAIN BRITISH! I SAY