UPDATED: Bad Bad Bad I Tell You! (The Euro)

Member Name: delawney

Product:	The Euro
Date:	26/01/02 (33 review reads)
Rating:

Advantages: Easier to travel abroad

Disadvantages: Loss of control over interest rates

OK, I know the Euro is a really boring topic, but it is a really important issue. This could change your life forever. For the WORSE. Don't be apathetic - if they have a referendum, make sure you vote no!

The Euro is a really, really bad idea and I really find it quite scary that the government of this country would even consider it. No, I'm not a raving Tory (quite the opposite, in fact) or some sentimental "pound lover", I've just given it a lot of thought, and quite frankly the whole idea scares me.

So why? OK, I am trying to be balanced, and I can see there are potential benefits:

* the Euro would reduce exchange risk exposure - but only within the Eurozone

* it is argued that the Euro would increase political and economic stability, as presumably governments will have to work together through the European Union to decide Eurozone-wide economic (and other) policy

* the Euro would minimise transaction expenses between countries in the Eurozone

* there would be greater price transparency between Britain and the rest of Europe ('rip off Britain' would be far more obvious)

* all these factors could contribute to an increase in economic growth, and arguably with that will come more jobs, better prospects and more money.

* it will be easier when you go on holiday within the Eurozone!

Given all these plus points, why am I so worried?

The main concern is that joining the Euro would entail our most important economic decisions being taken from central Europe. Most importantly this would include the setting of interest rates. It is very difficult to set the optimum interest rate level for any large area - even within the UK itself, different levels of interest rates will be beneficial to different communities at any one time. Broaden the picture and imagine the interest rates being set for the whole of Europe, and you could find yourself in the p
osition Ireland is in, where they desperately need to decrease interest rates, and they can't because they're tied into the Euro.

This problem can only get worse if the European Union membership is widened, and countries with far less stable economies than our own are allowed to join the Euro.

Economic decisions are best taken on a smaller scale.

There is much comment that the Euro would be good for British manufacturing industries. There may be some truth in this argument, but surely we have to consider the economic interests of the country as a whole (where the manufacturing industry is, I believe, not the dominant industry) rather than one specific sector. Furthermore, a significant proportion of the manufacturing industries transactions are with countries outside the Eurozone (in particular the US) and thus the Euro would have no effect here - indeed, it could even be detrimental to us - I can't see the Americans liking it much.

The move to the Euro is a dangerous step towards surrending to the interests of global business. The loss of control over the economy by individual governments and countries leaves us open to influence by global business (an we all know how moral they are), especially as we move into a more global-market-orientated world. In fact, it could be argued that large, multinational corporations already exercise a significant amount of control over individual governments, and that moving into the Eurozone will only serve to increase this risk.

The entry criteria for the Euro are very challenging, and it is doubtful they have already been met by all the countries already participating in the Euro (e.g. Greece). This is particularly concerning when you consider the possible entry into the Eurozone of countries with less stable economies, such as those in Eastern Europe.

The UK has had a long period with a relatively stable economy. We are starting to see the benefits of this,
such as reduced inflation and low levels of unemployment. Do we really want to risk this by joining the Euro?

Although it is true the Euro will help minimise exchange rate risks, this will only be true within the Eurozone. The problem will still arise for trading with countries such as the USA, which still account for a significant proportion of UK business.

It may also be true that membership of the Euro will facilitate growth, but this is not necessarily a good thing. Accelerated economic growth can encourage the "grow at any cost" mentality exhibited by many multinational organisations and as such may well have a detrimental effect on human rights, the environment.

The conversion costs of changing over to the Euro will be high. It is also the perfect opportunity for businesses to sneakily increase their prices, while people are still confused about how much their currency is worth.

Just my two-penneth worth. Just hope it stays a that way and doesn't become a two-euro worth!

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