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"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!
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