'Should the UK join the Euro?' poll discussion

PolishBigSpender

M_Thomson wrote: »

Without wishing to sound rude, you can hardly compare the pound which is the 4th largest reserve currency in the world to the Zloty.

Really? The currencies aren't that different - they both belong to large-ish countries, they're both in the EU and they both do a significant amount of business in Euro. Both have also came under sustained attack from investors recently, and the Pound has a long history of being rather volatile.

What makes sense for any proud independent country is to have your own currency, and the right to self govern yourselves in all ways. Which is why the EU and the Euro will eventually fail.

Really? That would be why France and Germany fought three bloody wars in the space of 75 years, then? Obviously proud independent countries love to fight expensive, costly wars against each other.

European integration has stopped all this. Just look at 17th to 20th century history in Europe - and you can clearly see that the one unifying factor is that countries have willingly cooperated in the EU. No-one has been 'forced' and countries can leave at any time - and this is key to the success of the entire project.

You may consider the Euro right for Poland, but it isn't right for Britain. From that way that this recession is going, the one size fits all isn't right for a lot of the Eurozone either.

Isn't right? The Eurozone has started to recover faster than the UK, Euro-using countries in trouble (such as Ireland) have been stabilised by the fact that the ECB will help out if needs be - just look at the state of Iceland and Latvia compared to Ireland to see what the Euro has done there.

Anyway, if the Germans could give up the mighty DM for the cause of European integration to put a stop to all the bloody wars, why can't Britain? Oh...that's because Britain still clings to this misguided belief that the Pound is somehow worth something on world markets.

The days of empire are over, and I suspect many Brits have a hard time coming to terms with this.

bigheadxx

PolishBigSpender wrote: »

Really? The currencies aren't that different - they both belong to large-ish countries, they're both in the EU and they both do a significant amount of business in Euro. Both have also came under sustained attack from investors recently, and the Pound has a long history of being rather volatile.

Really? That would be why France and Germany fought three bloody wars in the space of 75 years, then? Obviously proud independent countries love to fight expensive, costly wars against each other.

European integration has stopped all this. Just look at 17th to 20th century history in Europe - and you can clearly see that the one unifying factor is that countries have willingly cooperated in the EU. No-one has been 'forced' and countries can leave at any time - and this is key to the success of the entire project.

Isn't right? The Eurozone has started to recover faster than the UK, Euro-using countries in trouble (such as Ireland) have been stabilised by the fact that the ECB will help out if needs be - just look at the state of Iceland and Latvia compared to Ireland to see what the Euro has done there.

Anyway, if the Germans could give up the mighty DM for the cause of European integration to put a stop to all the bloody wars, why can't Britain? Oh...that's because Britain still clings to this misguided belief that the Pound is somehow worth something on world markets.

The days of empire are over, and I suspect many Brits have a hard time coming to terms with this.

Go to any country in the world with a pocket full of Zlotys and they will laugh in your face. The fact is that most countries, and certainly most tourist destinations will gladly accept sterling as payment and I imagine would be bemused to be offered payment in Zlotys.

The pound is as far as I can recall fixed against some carribean currencies, ie Jamaican dollar £1 = $100, whereas it does float against the USD.

The Eurozone and UK economies have never been in sync so it is no surprise that the timing of recovery would be different. As for the DM it was not that mighty at the time due to reunification with East Germany.

PolishBigSpender

bigheadxx wrote: »

Go to any country in the world with a pocket full of Zlotys and they will laugh in your face. The fact is that most countries, and certainly most tourist destinations will gladly accept sterling as payment and I imagine would be bemused to be offered payment in Zlotys.

Most tourist destinations? You mean the ones populated by British tourists who willingly pay a premium just to use Pounds? I imagine any tourist handing over Pounds in Krakow would be looked at strangely and asked if they had any Euro or Zloty. Certainly in any Polish tourist destination, Euro or USD are the only currencies accepted apart from Zloty - Pounds are worthless.

Or we could talk about Croatia - in which Pounds would be laughed at, yet many places familiar with Polish tourists will happily accept Zloty (at a premium, of course). Even in Egypt in 'Polish' resorts, Zloty will be accepted quite happily.

Most countries will *not* accept Pounds happily - even Ireland won't accept them these days!

The pound is as far as I can recall fixed against some carribean currencies, ie Jamaican dollar £1 = $100, whereas it does float against the USD.

You're completely wrong. The Jamaican Dollar isn't pegged at all, although it has been pegged in various ways in the past. Without tediously going through lists, even the Cayman Islands Dollar is pegged to the US Dollar as opposed to the Pound - and the Cayman Islands is a British territory! Or even more crazily, the British Virgin Islands uses the US Dollar as opposed to the Pound!

Even some of the other British possessions use the East Caribbean Dollar - which is pegged to the US Dollar.

Or even more to the point - the Bermuda Dollar is pegged at 1:1 with the US Dollar.

So - can you actually give me an example of an independent country choosing to peg to the Pound today?

The Eurozone and UK economies have never been in sync so it is no surprise that the timing of recovery would be different. As for the DM it was not that mighty at the time due to reunification with East Germany.

The point is that the UK has been in recession longer and is struggling more than the Eurozone, yet the UK has to stand as a proud independent country and suffer accordingly.

Your lack of knowledge of history is also interesting, because if you look at the formation of the Euro project - the deal was made between France and Germany in that if France accepted German unification, then they would also have to accept a common European currency. The deal was done and the rest is history, so to speak. Therefore, the DM was perfectly mighty at the time of the agreement.

Just remeber - all it took was a billion Pounds to knock the UK out of the ERM. It's really not that strong a currency

bigheadxx

PolishBigSpender wrote: »

Most tourist destinations? You mean the ones populated by British tourists who willingly pay a premium just to use Pounds? I imagine any tourist handing over Pounds in Krakow would be looked at strangely and asked if they had any Euro or Zloty. Certainly in any Polish tourist destination, Euro or USD are the only currencies accepted apart from Zloty - Pounds are worthless.

Or we could talk about Croatia - in which Pounds would be laughed at, yet many places familiar with Polish tourists will happily accept Zloty (at a premium, of course). Even in Egypt in 'Polish' resorts, Zloty will be accepted quite happily.

Most countries will *not* accept Pounds happily - even Ireland won't accept them these days!



You're completely wrong. The Jamaican Dollar isn't pegged at all, although it has been pegged in various ways in the past. Without tediously going through lists, even the Cayman Islands Dollar is pegged to the US Dollar as opposed to the Pound - and the Cayman Islands is a British territory! Or even more crazily, the British Virgin Islands uses the US Dollar as opposed to the Pound!

Even some of the other British possessions use the East Caribbean Dollar - which is pegged to the US Dollar.

Or even more to the point - the Bermuda Dollar is pegged at 1:1 with the US Dollar.

So - can you actually give me an example of an independent country choosing to peg to the Pound today?



The point is that the UK has been in recession longer and is struggling more than the Eurozone, yet the UK has to stand as a proud independent country and suffer accordingly.

Your lack of knowledge of history is also interesting, because if you look at the formation of the Euro project - the deal was made between France and Germany in that if France accepted German unification, then they would also have to accept a common European currency. The deal was done and the rest is history, so to speak. Therefore, the DM was perfectly mighty at the time of the agreement.

Just remeber - all it took was a billion Pounds to knock the UK out of the ERM. It's really not that strong a currency

Having been to "Polish" destination hotels in Egypt I know for a fact that they do not willingly accept Zlotys and they will do at a premium. The pound is not exchanged at a premium in Egypt, in fact it is still possible to exchange £1 for US$2 at Egyptian airports.

Having also been to Jamaica, it is also the fact that £1 is always exchanged for JD$100 but the value of the J$ will change against the US$. Perhaps you only find these things out by actually going there rather than quick internet searches..

The Euro in itself is nothing to do with German reunification as the ERM existed before the Berlin Wall came down so you are really over simplifying a very complex issue just to make your point.

No one would question that the £ is and always has been a volatile currency but as a small trading nation whose currency was always the worlds second and now third reserve currency then that is to be expected.

I wouldnt expect to be able to spend the £ on the streets of Krakov any more than in Paris, New York or Sydney, that is not the point I was making.

PolishBigSpender

bigheadxx wrote: »

Having been to "Polish" destination hotels in Egypt I know for a fact that they do not willingly accept Zlotys and they will do at a premium. The pound is not exchanged at a premium in Egypt, in fact it is still possible to exchange £1 for US$2 at Egyptian airports.

Yes, I can perfectly believe that they accept Zloty at a premium. Likewise with the Pound being accepted 1:1 for the Euro - it's common sense, yet the tourist is completely screwed.

Exchanging $2 to buy 1 pound is also believable - why wouldn't they offer such a loaded exchange rate? However, it's completely unbelievable to believe that Egyptian airports would exchange 1 Pound for 2 Dollars when the interbank rate is closer to 1-1.6.

Having also been to Jamaica, it is also the fact that £1 is always exchanged for JD$100 but the value of the J$ will change against the US$. Perhaps you only find these things out by actually going there rather than quick internet searches..

Current exchange rates suggest that you can get around 130-ish to the Pound - so no wonder they happily accept 100:1 exchange rates! You're just confirming that they screw British tourists while having to adjust their rates for more-savvy American touists.

The Euro in itself is nothing to do with German reunification as the ERM existed before the Berlin Wall came down so you are really over simplifying a very complex issue just to make your point.

Perhaps you should consult history books and find out just what compromise Kohl had to make to secure reunification in the face of a hostile France and a somewhat not-very-keen Britain.

No wonder the Pound is such a weak currency when her owners are willing to sell her at a vast discount abroad.

bigheadxx

PolishBigSpender wrote: »

However, it's completely unbelievable to believe that Egyptian airports would exchange 1 Pound for 2 Dollars when the interbank rate is closer to 1-1.6.

The duty free shops are priced in dollars $, they convert it to £1 per $2 US so actually a good deal for British tourists.

This is not just about tourist rates anyway. I am sure that the Irish economy would be quite happy to be still pegged to the pound.

At present UK beef exports to France are at a high because of the exchange rate. However UK supermarkets are brimming with Irish beef products. Ireland like France has the Euro so you would presume that importing beef from Ireland would be hugely expensive. However Ireland has been betrayed, as a small nation on the periphery of Europe. http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5140507/Ireland-is-ECBs-sacrifical-lamb-to-satisfy-German-inflation-demands.html

It would actually have made more sense for Ireland to adopt the £ as it would be more protected now than it is within the supposed protection of the EU and Euro.

PolishBigSpender wrote: »

Perhaps you should consult history books and find out just what compromise Kohl had to make to secure reunification in the face of a hostile France and a somewhat not-very-keen Britain.

No wonder the Pound is such a weak currency when her owners are willing to sell her at a vast discount abroad.

EMU was always a long term ambition of the EU in its various formations as far back as the 1960s. It is true that both PM Thatcher and President Mitterand did not want to see a unified and therefore more powerful Germany nor did Gorbachev in the USSR. The British did not want Germany to become the USAs new "best friend" and the French, alarmed that Germany would not sign a treaty with Poland, recognising post 1945 boundaries did not want a more powerful neighbour with a bigger voice in European discussions.

PolishBigSpender wrote: »

Just remeber - all it took was a billion Pounds to knock the UK out of the ERM. It's really not that strong a currency .

The bank of England actually made a profit on Black Wednesday as it sold the huge quantities of sterling that it had to buy that day several years later at a higher price. The same is true of the recently nationalised banks. The government will sell them for a massive profit in a few years time.

PolishBigSpender

bigheadxx wrote: »

The duty free shops are priced in dollars $, they convert it to £1 per $2 US so actually a good deal for British tourists.

That's really not a good reflection on the strength of the pound or otherwise. Some duty free shops, selling at a hideous markup anyway, do not show the strength or otherwise of a currency.

This is not just about tourist rates anyway. I am sure that the Irish economy would be quite happy to be still pegged to the pound.

Really? I don't think so. Any Irish person, if you ask them, would much rather be under the wing of the ECB than being tied to a currency which has repeatedly been under attack in the last 40 years. If the Pound was a better option - wouldn't they have kept their peg to the British Pound rather than tying up with the DM?

At present UK beef exports to France are at a high because of the exchange rate. However UK supermarkets are brimming with Irish beef products. Ireland like France has the Euro so you would presume that importing beef from Ireland would be hugely expensive. However Ireland has been betrayed, as a small nation on the periphery of Europe. http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5140507/Ireland-is-ECBs-sacrifical-lamb-to-satisfy-German-inflation-demands.html

Ireland has been betrayed? That's a classic report from a newspaper which has an anti-EU agenda. It's common knowledge that for the Euro project to succeed, the smaller nations give up their monetary policy in exchange for the security of a stable exchange rate and the ability to be bailed out if needs be. Again, I refer you to the difference in conditions between Latvia and Iceland - and Ireland. Ireland is not economically ruined, whereas both Latvia and Iceland are in all sorts of trouble.

It would actually have made more sense for Ireland to adopt the £ as it would be more protected now than it is within the supposed protection of the EU and Euro.

Again, if it made more sense - why didn't the Irish move back to a Pound peg throughout the 30 years of floating against the British Pound? I think every Irish person knows and realises that the benefits of the Euro outweigh the bad.

Have a look at this archived news report - http://www.nytimes.com/1993/02/01/business/ireland-devalues-its-pound.html

The commonly held wisdom in Ireland is that although the Euro stops them from adopting whatever monetary policy they like, it's worth it in exchange for having a currency which isn't subject to as much speculation.

The bank of England actually made a profit on Black Wednesday as it sold the huge quantities of sterling that it had to buy that day several years later at a higher price. The same is true of the recently nationalised banks. The government will sell them for a massive profit in a few years time.

They may have made a profit, but the point remains that it was possible to devalue the Pound with just a billion pounds in cash. Given that companies such as Ryanair have that kind of money available to them - is it really such a strong currency?

Again, one of the strong parts about the Euro is that it will be incredibly hard to destabilise. The repeated attacks recently on the Pound and Zloty tell you that mid-sized nations cannot defend themselves against currency speculators.

bigheadxx

PolishBigSpender wrote: »

That's really not a good reflection on the strength of the pound or otherwise. Some duty free shops, selling at a hideous markup anyway, do not show the strength or otherwise of a currency..

The prices in these shops are lower than resorts. As the items are priced in dollars then your "savvy" Americans are paying the same price anyway. I am not advocating tourist rates as a reason to keep the £ as this is a line used by politicians to sell the Euro to the masses.

PolishBigSpender wrote: »

Ireland has been betrayed? That's a classic report from a newspaper which has an anti-EU agenda. It's common knowledge that for the Euro project to succeed, the smaller nations give up their monetary policy in exchange for the security of a stable exchange rate and the ability to be bailed out if needs be. Again, I refer you to the difference in conditions between Latvia and Iceland - and Ireland. Ireland is not economically ruined, whereas both Latvia and Iceland are in all sorts of trouble.



Really? I don't think so. Any Irish person, if you ask them, would much rather be under the wing of the ECB than being tied to a currency which has repeatedly been under attack in the last 40 years. If the Pound was a better option - wouldn't they have kept their peg to the British Pound rather than tying up with the DM?

The DM was never the cornerstone of the ERM, currencies were measured against the ECU. As the major currency though it was the DM that currencies were always measured against.

The Irish pound wasnt pegged to the £ after 1979 as the UK remained outside the EMS. There were obvious economic problems in the UK leading upto 1979 because of government economic policy. However the punt maintained more or less parity with the £ throughout the 1980s. The £ has not been under repeated attack for 40 years. Yes a devaluation in the 1960s and other runs on the currency.

Anybody in the UK who wants to keep the pound will also tell you that "Black Wednesday", the day the pound left the ERM, the day of devaluation, is the greatest argument for keeping it. That day marked the first day of recovery from recession, lower interest rates and the ability of the UK to follow its own economic policy. It was the folly of a fixed exchange rate that compounded the UKs economy at that time and is doing the same to countries like Ireland now. How the Irish would love a competitive devaluation now! Iceland, with a 50% currency devaluation and a high reliance on exports has simply bitten the bullet early. Irelands only hope to maintain competitiveness is a real terms cut in wages. We shouldnt just look at todays news and think "oh my god" but look at who will emerge in the better shape in 5 years time. I'm not betting on Ireland. Unemployment is rising fast, public spending slashed, jobs are already going to Eastern Europe (outside the Euro) and wages will be cut in real terms. All for the sake of the Euro and wanting to loosen its ties with the UK which is ironically its biggest trading partner.

PolishBigSpender wrote: »

Again, if it made more sense - why didn't the Irish move back to a Pound peg throughout the 30 years of floating against the British Pound? I think every Irish person knows and realises that the benefits of the Euro outweigh the bad.

Have a look at this archived news report - http://www.nytimes.com/1993/02/01/business/ireland-devalues-its-pound.html..

The fact is that the Euro makes no sense, thats why. The news report simply adds to the argument that the Euro is a bad idea. Had currencies not had to maintain these parities in the first place then they would not have left themselves open to speculators. It makes sense for governments to have the option of devaluation available. The USA would love to devalue its currency at the moment but cannot because of the number of other currencies pegged to it and the retalliatory reaction that would follow.

PolishBigSpender wrote: »

The commonly held wisdom in Ireland is that although the Euro stops them from adopting whatever monetary policy they like, it's worth it in exchange for having a currency which isn't subject to as much speculation.

But the fact is that they benefited from the devaluation of the punt in the same way that the UK did and I am sure they would prefer that option now as opposed to real cuts in income.

PolishBigSpender wrote: »

They may have made a profit, but the point remains that it was possible to devalue the Pound with just a billion pounds in cash. Given that companies such as Ryanair have that kind of money available to them - is it really such a strong currency?

Dont know where you get the £1billion from but the ERM crisis was fairly unique and also demonstrates that the EU and policy falls in line with German requirements. In 1993, German reunification saw necessarily high German interest rates meaning that for the UK to remain within its ERM band, interest rates had to be high here. Most people agree that it was the wrong time for the UK to join in 1990 and the wrong rate. Germany gave far more support to the French Franc at the time than any other currency. [/QUOTE]

PolishBigSpender wrote: »

Again, one of the strong parts about the Euro is that it will be incredibly hard to destabilise. The repeated attacks recently on the Pound and Zloty tell you that mid-sized nations cannot defend themselves against currency speculators.

The best way to protect against currency speculators is to follow a strict, monetarist economic policy as in the 1980s in the UK where the £ increased and stabilised in value against other currencies. Also by not creating schemes such as the ERM which are obviously a target for speculators.

I see no problem with sterlings fall against the Euro because it is helpful to the UK economy and the alternative would be higher interest rates and real terms cuts in income.

[Deleted User]

Just a couple of questions on some comments you made that appear a little confusing:

1. it seems a bit odd to say on the one hand that the 1993 ERM crisis was fairly unique, and on the other to say that it (and news reports on it) add to the notion that the Euro is a bad idea. The Euro wasn't around in 1993, and the 1993 crisis doesn't apply to it, pretty much by definition: the key difference between 1993 and now is that the punt, drachma, lire et al are no longer open to such a speculative attack, as they've been absorbed into the Euro. Even if it did, I'm not sure that a unique occurrence establishes whether something is a good or bad idea. Perhaps you could clarify your thinking on this?
2. is there any real difference between devaluation and cuts in income? The net results would seem to me much the same...?

bigheadxx

Marvin_the_Martian wrote: »

Just a couple of questions on some comments you made that appear a little confusing:

1. it seems a bit odd to say on the one hand that the 1993 ERM crisis was fairly unique, and on the other to say that it (and news reports on it) add to the notion that the Euro is a bad idea. The Euro wasn't around in 1993, and the 1993 crisis doesn't apply to it, pretty much by definition: the key difference between 1993 and now is that the punt, drachma, lire et al are no longer open to such a speculative attack, as they've been absorbed into the Euro. Even if it did, I'm not sure that a unique occurrence establishes whether something is a good or bad idea. Perhaps you could clarify your thinking on this?
2. is there any real difference between devaluation and cuts in income? The net results would seem to me much the same...?

1. The ERM was the pre-cursor to the Euro, currency convergence via the ERM was necessary, supposedly, for EMU to take place. The fact is that if the ERM had not existed then the currencies would not have been put into such an obvious target for speculators.

2. Are you saying that now the pound has been devalued by 30% against the Euro that you feel your income has fallen by the same amount?