Euro - Not now but soon Jun03

"Should we scrap the pound and adopt the Euro?" I asked passers by on the high streets of our towns and villages throughout Suffolk and Essex.

I was met with: "Don't know mate, not given it much thought!" "Why should we have this phoney Brussels money? I'm happy with the pound." "Never in my lifetime." "It's good for holidays - you can use it in Spain, France and all over the continent." "I think Blair wants it but Brown says no." "If it means cheaper mortgages then let us have it."

The British public, one of the most literate and well-informed in the world, has been denied a genuine public debate on the pros and cons of adopting the Euro. Most people in Britain today are against scrapping the pound but Prime Minister Blair chooses to ignore public opinion. He is allowing Chancellor, Gordon Brown, to decide if and when the UK will meet the five economic tests.

The economies of the 12 Eurozone countries did not "meet" or "converge" when they adopted the Euro. Belgium and Italy continue to breach the maximum limits of public debt as a percentage of GDP. Germany, suffering from high unemployment, would benefit from a lower Euro interest rate. This same Euro interest rate is inflationary for Ireland and Portugal. The significantly poorer and relatively unstable economies of the ten new accession countries also fail to meet the criteria for joining the Eurozone, yet they will adopt the Euro soon after they join in June 2004.

The Treasury's analysis on non-compliance of Gordon Brown's five economic tests has been presented in millions of words on hundreds of tons of paper.  However, interpretations of past data by economists cannot offer an accurate prediction of how the UK economy will fare if it adopts the Euro now, or at any time in the future. Gordon Brown has no magic wand that he can wave to determine when and for how long the UK economy will "converge" with the economies of major countries like Germany and France.

The economic tests are presented as a smoke screen by Blair and Brown to buy time to reach a political settlement. It seems that Blair will have his Euro if he offers 10 Downing Street to Brown. The Euro will be a political decision, driven by personal ambitions, made irrespective of British interests. It will not be an economic assessment, but an historic compromise of Blair and Brown that will abolish the pound, adopt the Euro and irretrievably tie us to the European umbilical cord!