Should the UK ditch the pound and adopt the Euro ? Poll Discussion

eddmac2

If we were to adopt the euro in the UK, prices will immediately increase, as they did in all the eu countries that adopted the euro. But when things settle down, it will be earier to compare and purchase items on an even footing all over europe.

Some people don't like being a part of the EU and do not like any further integration. But the fact is we are here and we cannot go back so lets make the best of it. Keeping the pound has been fostered upon us as being patriotic but all it does is shore up the rip-off Britian industry.

I worked in Sweden a few years back when they voted not to adopt the euro. Denmark followed their lead. Both these countries are much worse, price wise, than the UK but these people in their ignorant bliss, travel in droves to towns in other EU countries, to stock up on items that are too expensive at home.
How many of the UK holiday makers, driving to the continent this summer, will pack a car full of goods to take home?
We need a level playing field for comparing goods and services. The pound only protects the rip-off Britian culture. People can still demonstrate and value thier patriotic identity in many other ways. Adopting the euro did not adversely affect the national identity of any other european.

Bird123_2

I agree totally, keep the pound!!!!!!!!!

GregJK

Because its not simply a question of holidays. If it was we could all vote for it.
The biggest effect is on inflation and mortgage rates and we would in effect be governed by the problems of other countries.
Countries that have very different problems - like Greece Poland.
So, vote NO to keep control of our own economy.

bankersmug

That's another white elephant - this concept of rip-off Britain. This is fuelled by people going abroad on holiday, find things like beer,wine eating out and look in the windows at local property prices and they then deduce that Britain is a rip-off because it's not as "cheap" as at home.

While things such as property and are undoubtedly are expensive here this is largely due to us being a small island where demand outstrips supply.

But they are not earning the local wage, paying the local utility bills or the local taxes.

To put the boot on the other foot, I had some Slovenians to stay a few months ago. They had heard it was a rip off here. One thing that surprised them was how cheap our electronics are here - I've been emailed a shopping list of electrical goods to take there when I drive across in July!

But back to the main point.

I am very much a pro-European, consider myself European, but am anti-Euro.

Neil argued that we'd still have taxation to control spending. While that's true and it does have its place, it can be a very clumsy instrument to use, and is not as an effective way of inhibiting peoples borrowing and encouraging saving.

eddmac2

Thanks for your reply. I have had no experience of the 'new countries' like Slovenia and I'am not sure what impact they will have but I bet it is manageable.
I read in the newspapers many years ago that the phrase, "rip-off Britian" was created during the late 1990's, by people that left the UK to work abroad and then, coming back home, seen the difference on how far their 'money went'. I can tell you from my experience, not as far.

My thoughts are based on the following criteria. In the last 10 years I have spent 2 years living and working in the USA, 6 months in Scandanavia and have just completed 2 years in Germany. In between these periods abroad, I have worked in various towns in England, Scotland, Wales and Northern Ireland.

My views, as well as probably all the other contributors here, are instinctive and or subjective. It would be good to hear debate from sound economists.
But like Scandanavia, in Britian the issue would appear to be nationalistic not economic.

THoy_2

Big_O wrote: »

As someone already mentioned, two words: Interest Rates. If we were to koin the Euro, interest rates would be set by the ECB, which sets them for the European average to keep inflation under control. Now, this is dominated by the German economy, and to a lesser extent, France, which have traditionally had lower rates of interest than Britain (under the Franc and the old Deutsch Mark) and therefore the Eurozone has lower interest rates than the UK - currently 4% as opposed to 5.5%. That's a whole 1.5% LOWER than the UK. Now, imagine what would happen if the UK was in the Eurozone with that rate. Well, for a start it would make the current house price situation look like nothing - they would have spiralled even higher and BTL would have been even more widespread. There's also a good chance that teh old boom-and-bust cycles would have returned - except with no way to control them

In short I think the economy destroying interest rates that would put many people out of work outweigh the benefits of not changing currencies for holidays.

Incidentally, the company I work for has more issues with the dollar tehn the Euro. Joining the Euro wouldn't make a blind bit of difference to them as the Euro/Dollar exchange rate would replace the Sterling/Dollar exchange rate as teh issue. Joining the dollar would be in their interest though! :rolleyes:

..

Well sum1 has a grasp of GB economics !!
Wait for the outcry if inflation soared away ( which it would ) if we had lower interest rates..and in all things..not just house prices !

Good thoughts from this contributer.....

andrewbolt

I'm always amused by this 'we wouldn't have control of our interest rates' argument, as if 'we' meet the Prime Minister in the pub every weekend to tell him what we want done about interest rates.

'We' have a single explicit control - our election vote. I don't know if anyone ever votes purely because they believe that their best interest will be served by one party's ability to set the interest rates appropriately.

There seems to be an assumption that non-elected bureaucrats have no idea about how interest rates work, compared to people elected on their ability to smile charmingly.

lindseykim13

no i dont see why we should, this is our country, our pound and if other countries/nationalities dont like it, tuff. We have already adapted this county enough to suit other nationalities let us keep one british thing! I dont get this country, we have pollish coming over to work, no problem, but i know alot of british people who are having to learn pollish to communicate with them in the work place, now shouldnt they be learning our language?

Vampgirl

andrewbolt wrote: »

There seems to be an assumption that non-elected bureaucrats have no idea about how interest rates work, compared to people elected on their ability to smile charmingly.

Thats not the point that's being made. The point is that the ECB set a single rate for the whole of the Eurozone, and one rate doesn't necessarily suit all the varied economies under that umbrella. Whereas the BoE sets the rate specific to the needs of the UK economy.

mrkhtn

The problem I have with the level playing field argument is that it does not realy aply to day to day life for the average joe on the street. Who really cares if the price of cornflakes is displayed in the same currency here and in Germany / France etc. You will still have to trip to the supermarket up the road to buy your essentials every week. It might be easier for you for 2 weeks in 52 when you go on your hols but I cant see the average booze cruise turning into a weekly grocery shop somehow. And no one will ever make me believe the prices in the shops wont be 'rounded up' if we swap to the euro. They will. There is a direct cost to business when a currency changes - new tills, staff training etc. Guess who pays. We would!

If the UK adopted the Euro, the ability to set interest rates would be removed from the Bank of England and transfered to the ECB, who set the rate for the whole of the eurozone. The rate is set there to steer the eurozone economy, not that of individual countries. What would happen if the lower interest rate in europe came here. More disposable income in your pocket...rising inflation...firms winding up...redundancy...BANG! One shot to hell economy but, and its an important but, no way of fixing it as we could not control our own interest rates.

Also, in response to the local taxation method of controling inflation. This might work but show me a career politician who would use taxation in this way. The reason our tax system operates as it does 'on the sly' and not up front and open is that the British have an almost pathalogical hatred of paying tax and have a tendancy of creating merry hell if they think they are being taxed to much (who remembers the poll tax? / fuel protests?).

We all know we are being taxed a lot but as its all done hush hush we just grumble and get on with it. Would that be the case if taxation was brought into awareness in the same way the interest rate decision is now?

And what would happen if a terrible interest rate decision (for the UK) was imposed from abroad?

I honestly believe the only reason our government isnt seriously under pressure to withdraw from europe altogether is that as a general rule, the brit public dont have a clue how much europe actually costs us in relation to its benefits. Taking us into the euro would bring a lot of information into the public awareness the political movers and shakers desperatly dont want you to know as they know the fall out from a general public awareness would totally wreck all their efforts so far.

For the average joe, the political rulers and business in general I can see no benefit for us adopting the euro. Its really easy to see the downside for all concerned.

I believe we should be in europe. I dont for a second believe we should scrap the pound.