Euro exchange rate at 1.09

Treadmill

Pity the poor British pensioners in places like Spain, I reckon the Euro will be worth more than the pound come summer

iolanthe07

I wonder whether joining the euro is going to be the best option for Britain?

They wouldn't let us in because our debt to GDP ratio is way out of line with Maastricht requirements. May not be a good idea either, as we would have no control over our interest rates. Perhaps we should have joined at the start, but that is academic now.

allthingspink

I'm going away for New Year skiing to Italy. Weighing it up I decided to get euros today at 1.104. I do have a Nationwide card too, and I know that getting cash out whilst you're there tends to be better using that card, as you get it at a 'real bank exchange rate' from the card (or whatever it's called...). Was I right in thinking what with Germany announcing Brown is stupid etc that the euro fall by the 30th will mean my cash exchange rate was better today than what I would probably get on my Nationwide card come New Year? Anyone any opinion on that?

My head hurts, it's all too confusing!

sdooley

iolanthe07 wrote: »

I wonder whether joining the euro is going to be the best option for Britain?

They wouldn't let us in because our debt to GDP ratio is way out of line with Maastricht requirements. May not be a good idea either, as we would have no control over our interest rates. Perhaps we should have joined at the start, but that is academic now.

Our debt to GDP raito is 45%

Germany's is 65%

Belgiums was 120% when they joined the euro

Where we fall down is our current borrowing - which is over the 3% p.a. hurdle of Maastricht - but Germany, Spain, Greece, Italy and others have all breached that limit within the eurozone.

ginvzt

There is also inflation rate - it can't be higher than Mastricht criteria at that time. Does UK meat it as well?

ginvzt

The criteria for joining Euro:

? Which criteria need to be met by CEE countries to join the euro?
Schaefer: The Maastricht criteria apply. They ask for a high degree in price stability: the inflation rate may not be more than 1.5 percent above the average of the three member states with the lowest inflation rates; the long-term interest rate should be no more than two percent above the average of these three countries.

A country has to be a member in the new exchange-rate mechanism system without devaluation for least two years. And finally, the budget deficit should not exceed three percent of the GDP and the national debt has to be below 60 percent of the GDP.

In addition, there are soft criteria such as a high integration of markets, sustainable balance of payments position and observance of unit labor costs and other price indices.

So, GBP meets the national debt criteria - what about the others?

Austin_Allegro

iolanthe07 wrote: »

I wonder whether joining the euro is going to be the best option for Britain?

They wouldn't let us in because our debt to GDP ratio is way out of line with Maastricht requirements. May not be a good idea either, as we would have no control over our interest rates. Perhaps we should have joined at the start, but that is academic now.

But didn't the EEC originally say that Britain wasn't eligible to join - they still let us in in 1973. IMO the UK going cap in hand to Brussels to join the Euro would be a massive propaganda victory for the empire-builders of the EU (and some of their quisling fellow-travellers in Britain) and they would go for it even if we didn't meet the criteria.

iolanthe07

Austin_Allegro wrote: »

But didn't the EEC originally say that Britain wasn't eligible to join - they still let us in in 1973. IMO the UK going cap in hand to Brussels to join the Euro would be a massive propaganda victory for the empire-builders of the EU (and some of their quisling fellow-travellers in Britain) and they would go for it even if we didn't meet the criteria.

You may well be right; but hasn't our Beloved Leader ruled it out for the forseeable future?

tomstickland

sdooley wrote: »

Our debt to GDP raito is 45%

Germany's is 65%

Belgiums was 120% when they joined the euro

Where we fall down is our current borrowing - which is over the 3% p.a. hurdle of Maastricht - but Germany, Spain, Greece, Italy and others have all breached that limit within the eurozone.

That's only the on-balance sheet debt. Add in the unfunded pensions and PFI expenditure and it's over 100%.

sdooley

tomstickland wrote: »

That's only the on-balance sheet debt. Add in the unfunded pensions and PFI expenditure and it's over 100%.

That canard. The German unfunded pension liabilities are many times higher than the UK's - their state pension pays out far more and their Beamter (unsackable senior civil servants) are renumerated at a level that would make Sir Humphrey squeal.

PFI is sometimes held on balance sheet. Sometimes it isn't. It depends on the structure used and the risk transferred to the private sector. There are more areas that should be on the balance sheet - but not all - some relate to future income spending, e.g. on GPs salaries in private contracted suppliers.

You can't bring all committed future expenditure flows onto the balance sheet and call it debt - not if you want to show meaningful statistics - the government has to pay staff salaries next year, that is next year's expenditure and will be met from next year's taxes.