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Letters to the editor



15 June 2000

I would like to know if the Canary Islands (part of Spain) are joining the European Union.
I hope you can send me a answer.

Greetings from Roy van Eijsselsteijn from Holland / the Netherlands

Dear Mr van Eijsselsteijn,

Since they are part of Spain, they are already part of the EU. In this respect they are unlike the Channel Islands, for example which are are not part of the EU and have many aspects of separateness from the UK, of which they are 'Crown Dependencies'. The Canaries are 'autonoma' but this does not mean they are tax havens for example; they are provinces of Spain, like all other regions of Spain, rather like the 'laender' in Germany.

yours sincerely,
Patrick Minford
 
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22 May 2000

Dear Prof Minford,

I am very impressed with your site and was wondering could you help me with a problem.  I am doing my disseration on the declining Euro, Britains position and the dented national pride of France and Germany who had pinned their interests to it.  Could you please point me in the direction of finding info re these subjects, thank you,

Richard Keenan,
 

Dear Mr. Keenan,

thank you for your kind words. On the 'conjuncture' and analysis of the outlook and recent developments, you can find our latest commentary and forecasts on 'The Euroland economy' section. I also wrote a piece in the Telegraph on the euro's decline (published April 10) which you can find under my Telegraph articles section. There are related Telegraph pieces going back, about the same structural problems that are causing the euro's decline.
yours sincerely,

Patrick Minford
 
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9 May 2000

Dear Prof.Minford,

I was intrigued by your suggestion yesterday that Ireland might introduce a 'floating' tax on the purchase of punts to alleviate its current policy dilemma - how would this work? In addition, would it not contravene EU rules on (the elimination of) exchange controls?
Regards

Adam Slater

Dear Mr. Slater,

Thanks! My suggestion would be a way of slowing down the economy in the same way that a higher exchange rate does. It is not exactly an exchange control measure; rather it is a tax/subsidy arrangement. If it is to mimic a floating rate then it should be a tax on foreign inflows and a subsidy on foreign outflows. The Swiss operated a tax along these lines some time back - on the foreign inflows only. I hasten to add I think it is a bad idea. The EU could indeed challenge it; but of course there is the question of how one deals with asymmetry in a one-interest-rate zone and it is a moot point whether a) they would in practice challenge a country that was doing its best to stay in the euro b) the European Court would rule it as an infringement of control rules. The Irish situation is unprecedented - a massive degree of asymmetry in a self-governing country. They would be better off leaving the euro than doing any such thing. But if they will or can not, then they could be forced to some such desperate measures.
yours sincerely,

Patrick Minford
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9 May 2000

Dear Prof.Minford,

I was intrigued by your suggestion yesterday that Ireland might introduce a 'floating' tax on the purchase of punts to alleviate its current policy dilemma - how would this work? In addition, would it not contravene EU rules on (the elimination of) exchange controls?
Regards

Adam Slater

Dear Mr. Slater,

Thanks! My suggestion would be a way of slowing down the economy in the same way that a higher exchange rate does. It is not exactly an exchange control measure; rather it is a tax/subsidy arrangement. If it is to mimic a floating rate then it should be a tax on foreign inflows and a subsidy on foreign outflows. The Swiss operated a tax along these lines some time back - on the foreign inflows only. I hasten to add I think it is a bad idea. The EU could indeed challenge it; but of course there is the question of how one deals with asymmetry in a one-interest-rate zone and it is a moot point whether a) they would in practice challenge a country that was doing its best to stay in the euro b) the European Court would rule it as an infringement of control rules. The Irish situation is unprecedented - a massive degree of asymmetry in a self-governing country. They would be better off leaving the euro than doing any such thing. But if they will or can not, then they could be forced to some such desperate measures.
yours sincerely,

Patrick Minford
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17 April 2000
Sirs,
I am a student carrying out a research project on QMV. I have got a lot of information from your site, but I am finding difficulty in finding Appendix 4 which lists the allocation of votes under this system and the weighting system used to determine. Could you possibly point me in the right direction or send me these details by e-mail. I have found your site the most informative of all the UK sites I have visited, and I shall certainly recommending it to all involved in this type of study at the Institution I attend.
Yours respectfully,
Gerry Sherlock.

Dear Mr. Sherlock,
Many thanks for your kind words. We will make sure these appendices are placed on the page shortly. Meanwhile, QMV votes are as follows:
Germany,UK,France, Italy, 10 votes each; Spain 8; Netherlands, Greece, Belgium, Portugal 5 each; Sweden ,Austria 4 each; Denmark,
yours sincerely,
Patrick Minford,
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7 April 2000

Dear Mr Minford,

I recently had a letter published in the Telegraph responding to Austin Mitchell's statement recently that the £ was over-valued. He was stating that the government should do something about interest rates, but I suspect that he was also wanting to say that we should join the single currency.

In my letter I said that the £ was not over-valued, but the Euro was weak (due to over-regulation, social costs and anticipation of enlargement to include weaker economies of Eastern Europe) and that the £ broadly followed the US dollar.

Austin Mitchell did write to me saying I was wrong.

If you have a moment I would be grateful if you could give me your view of  the £ v euro's position at the present. It is clear that the declining value of the euro must be causing some pressure on competitiveness and the arguments must increase for us to join. But to me (a euro-sceptic and definitely against joining both on economic and political grounds) it seems that a continually weakening euro cannot be a desirable currency to join even if their increasing price competitiveness (as a result) puts pressure on British industry, but as a campaigner I might be hard put to find the argument for staying out if company's started to fail as a result (the BMW/Rover debacle has already been used to justify our joining).

What are the arguments for staying out if industry is affected. I suppose the USA and other parts of the world should also join the single currency for the same "reasons". Surely there must come a point where the euro's decline must cause some sort of crisis to the Euroland 14 (import costs must be going up dramatically for instance and they cannot produce everything they need).

Of course the reverse argument, - if the pound was declining, - would mean British industry would be more competitive and therefore we should stay out, but they would argue then we should join!

There must be an economical logic to all this. To me it would seem that the time has passed when the individual currencies (franc, mark etc) should be floated relative to the euro to restore stability, but of course politically, at the moment, this would not be allowed to happen.

David Barnby
Witney in a Sovereign Britain

Dear Mr. Barnby,

Thanks for your note. As it happens I have just penned a piece for the Telegraph on this very issue; it is due out either this or next Monday. Austin Mitchell is by the way very anti-euro- he is one of the Labour Safeguards people. He is also very anti a high currency but he is only arguing for much looser monetary policy in effect.

In a nutshell your point is correct that the euro being weak is the main issue; we are strong because Europe is weak and behind in the new service industries. This is semi-permament now. You ask whether it means we should join the euro to save dying industries like Longbridge. Not really; if they are dying, that's it. The new service industries are replacing them. That is good and means the economy growing and getting richer by accepting change. If we joined it would in any case be at current exchange rates because the rules say you must be 'stable against the others for two years' in a sort of ERM. As the MPC cannot loosen monetary policy to force sterling down for fear of inflation, there we are at these levels. If we joined it would be at them- no 'solution' for Longbridge there. So it cannot be an argument for joining the euro.

What has happened has shown the huge difficulties of the UK joining. Due to these Gordon Brown and the Treasury are extremely sceptical- even though they will not rule it out.

yours sincerely, Patrick Minford
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5 April 2000

The following was posted by a contributor on the Eurofaq discussion group. Is there any factual basis to it? If so could it be publicised with additional evidence?

Barry Johnson
Llangibby, Monmouthshire
 
<Begins>
What I heard as the reason for the Euro's continuing decline was that defacto money printing in Ireland (where there are negative interest rates and an estimated money supply growth of 40%) was having a noticeable effect. The quantity of money is growing so rapidly in Ireland that they can afford to buy imports from outside the Euro zone (i.e., GB and US, the overwhelming majority of their economic activity) in ever greater quantities in spite of the decline in the Euro, as their purchasing power has risen far faster. This effect will carry on until Ireland threatens price stability in the Eurozone, which might be some time. It is also born out by the economic recovery in France, in spite of even higher taxes & the 35 hour week, when al things being equal they should be job reducing measures. Irish Euros are simply filtering through and inflating their economy too. In about 2 years time the current Irish cash-creation will have worked through and they will need some very high interest rates to deal with it - just as Germany is recovering.
<Ends>

Dear Mr. Johnson,
Ireland is having a huge problem with inflation inside the euro. But although these money numbers are correct as far as I know, the size is too small to affect the whole euro area. If enough other countries overheated in the same way (Spain/Portugal/Holland and so on) and they are threatening to do so, then there would be a general inflation problem for the euro- which is another way of interpreting the writer's remarks. Clearly the ECB must take action to raise interest rates before then. But this could be very unpopular in Germany and Italy.
yours sincerely,
Patrick Minford
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4 April 2000

Dear Professor Minford,

I have heard about the Rotterdam effect which I understand over-estimates our dependence on EU trade because Rotterdam is used as a gateway to the world.

Can you please point me to a good source of information on this subject. I tried Business for Sterling but nothing came back. Also how can I confirm that when our net EU contributions are taken into account the real tariff on our exports to the EU is in effect 5.7% & not really zero. Is it true that the US only faces a rate of 3.6% & exports more to other EU countries than the UK does. I got the following info from kc3.co.uk - Commerce section:-

<begin>
The USA exports more to the other EU countries than does the UK. It achieves this through a tariff barrier of 3.6%. Although the UK's exports to the EU are ostensibly tariff-free, if the cost of membership, or NET budget contribution (£5.5bn), is averaged over the total value of our exports ($142bn) then it is equivalent to a tariff barrier of 5.7%. If the net budget cost were instead returned to UK companies as a tax reduction allowing our prices to drop then we would still be better off paying the 3.6% tariff. As a member of EFTA there would be free entry of our goods into the EU. We would also be able to negotiate favourable terms with the USA, our largest export customer, as a member of NAFTA. (Eurofacts 3/3/00)
<end>

Is this stuff reputable & safe to use? You see I'm writing a letter to the Times to combat a letter sent on the 28th March by LibDem MEP Mr Christopher Huhne who was banging on about how dependent we are on EU trade. I'm dubious of that. The letter printed under his that day was mine.

Regards,
C.A.Yates(Mr)

Dear Mr. Yates, You are right about the Rotterdam effect. The best source for calculations of the effect on trade and investment is work by Ian Milne which can be obtained from the Global Britain site and the June Press- see in particular his booklets on UK trade. The point about the tariff-equivalent of our EU contribution is not really quite accurate. It is true that we pay this contribution and it is a cost to our taxpayers. However a tariff is a protective addition to the price of a good sold; and the EU contribution is levied as a proportion of GDP, it does not change with the extra amounts we export to the EU. Hence it does not act as an extra cost induced by the sale.
yours sincerely,
Patrick Minford

Dear Mr. Yates, Subsequent to my letter to you, Ian Milne has written with the exact reference where you may find the calculation on the Rotterdam/Antwerp effect. It is Table 25 on pages 30 and 31 of his Global Britain pamphlet in October 1999 'UK Trade in 1998 and growth 1992-98'.
yours sincerely,
Patrick Minford
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25 March 2000

hello
 
I would like to ask a question instead of making a comment. I will be very glad if you could spare your time.
 
How would the decision to fix the euro with regard to the US dollar or the Yen, or allowing it to float, affect monetary and fiscal policy in the Euroland?
 
Thank you
 
YILDIRIM

Dear Mr. Yildirim,

Thank you for your letter. Fixing the euro against the dollar would have the sort of effects discussed in the 'European Monetary Union- a bibliography' section of the site; fixing the exchange rate is like having a monetary union except that it is easier to undo than leaving a union. It means that monetary policy is no longer effective- the value of the euro to the dollar would be paramount to policy so interest rates would have to be kept in line with dollar interest rates. Hence US monetary policy would in effect govern conditions in the euro-zone.

This would greatly increase the difficulties within the euro-zone since the euro business cycle is quite a lot different from that of the USA; so few if any euro countries would be happy with the setting of interest rates according to the interests of the USA. At least at present euro interest rates are set for the benefit of the average of these countries, so those close to the average are content. So fixing the euro to the dollar would cause trouble inside the euro-zone with the acceptability of the euro.

In short it is most unlikely that the euro would ever be fixed to the dollar; and the same arguments apply to fixing to the yen.

Were these currencies fixed to each other we would have to have conditions suitable for a world currency; again the Bibliography suggests that this means very considerable flexibility in labour markets to act as a substitute for the effects of different monetary policies in stabilising economies.

yours sincerely,

Patrick Minford

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17 March 2000 (translated into English below)

Sehr geehrter Herr Minford,
 
besten Dank für Ihre Antwort. Es freut mich, daß ich Ihnen in deutsch (österreichisch) schreiben kann. Da mein Englisch leider nicht so gut ist, ist dies für mich eine große Erleichterung. Bitte Antworten Sie aber unbedingt auf Englisch, denn meine "Faulheit" soll nicht ganz so weit unterstützt werden. Aber Englisch lesen und auf Deutsch übersetzen ist halt wesentlich einfacher als von Deutsch auf Englisch.
 
Ich bin 58 Jahre alt. Lange schon ist es her. Mit 17 Jahren habe ich Ihr schönes Land bereist. Per Autostopp. Durch ganz England bis zum letzten Haus von Schottland und retour. Ja, damals mußten wir (wir waren zu zweit unterwegs) noch 2 Pfund Sterling für die Überfahrt von Ostende nach Dover bezahlen. Das Pfund war damals noch ca. ATS 70.-- wert. 1 Pfund waren bekanntlich noch 20 Shilling und 1 Shilling noch 12 Pence.
 
Aber nun zum "Problem" Euro. Sie haben vollkommen recht mit dem was Sie schreiben. So "dumm" würde die EU natürlich nicht sein, falsche Umrechnungskurse (Dollarkurse) zu verwenden. Das wäre ja sofort aufgefallen und es hätte ein allgemeines Aufschreien gegeben. Der Fehler liegt in den ECU-Währungsanteilen.
 
Ich mache Ihnen einen Vorschlag:  bitte gehen Sie im Internet auf www.liberale.de/
klicken dann links auf
.....................Diskussion...............(Diskussionsthemen erscheint)
mit der rechten Bildlaufleiste runterfahren bis auf ..........Börsencrash - Die Seifenblase platzt ! (23.02.2000) - klicken -
runterfahren bis auf ............Ältere Beiträge............ klicken
dann sehen Sie meine diesbezüglichen Beiträge und zwar:
Re: Krach vertagt (Ernst, 29.01.2000   10:23).........klicken
Re: Wilhelm:EURO: Darum ging es ja nicht (Ernst, 01.02.2000   03:05)
Re:         d e t t o                                            (Ernst,01.02.2000   19:07)
Re:         d e t t o                                            (Ernst,05.02.2000    02:37)
wenn Sie den ersten Beitrag gelesen haben, am besten dann unten einfach
immer auf ......... Folgender Beitrag ........klicken, bis Sie zu den
entsprechenden Beiträgen kommen

geschafft? Gratuliere!
 
Meine Beiträge in diesem Forum, haben nichts mit meiner politischen Gesinnung zu tun.
 
Es würde mich freuen, wenn wir noch weiter diskutieren könnten. Wie gesagt, 2 x 2 = 4, politisch könnte man sagen 2 x 2 = 5 aber es wäre und es ist falsch (ein Betrug). Der wahre Wert des Euro dürfte knapp bei ATS 7.--, also bei ca. 1 DEM liegen.
 
Mit freundlichen Grüßen
Ernst Berger
 

Dear Mr Minford,

Thank you for your reply. I’m pleased that I can write to you in German. It is a great relief for me as, unfortunately, my English is not that perfect. However, I would like you to reply in English because my “laziness” should not be supported too much. Reading in English and translating into German is much easier than the other way around.

I’m 58 years old. A long time ago, I was seventeen then, I travelled through your beautiful country – hitchhiking – the whole country until the last house in Scotland and return. At that time the ferry fare from Ostende to Dover was £2. The pound was then worth 70 ATS. One pound was 20 Schilling and one Schilling 12 pence.

But now to the Euro “problem”. You are perfectly right. The EU can’t be that “stupid” to use false exchange rates (against the dollar). That would have caught everyone’s eye immediately and would have caused a public outcry. The mistake is to be found in the way the units of national currencies in the ECU basket were determined.

 My suggestion is the following: please go on the internet to www.liberale.de/ ….click on ……….Diskussion………..go then to
 ………..Boersencrash – Die Seifenblase platzt! (23.02.2000)
Re: Krach vertagt (Ernst, 29.01.2000 10:23)
Re: Wilhem: Euro : Darum ging es ja nicht (Ernst, 0102.2000, 03:05)
Re:  detto  (Ernst, 01.02.2000  19:07)
Re: detto  (Ernst, 05.05.2000  02:37)
If you have read the first article than you simply go down to …..following article……and click until you reach the articles mentioned above.

You are done, congratulations!

My contributions to this forum are not influenced by my political convictions.

I would be pleased if we could continue our discussion. As I said: 2x2=4, politicians could say 2x2=5 but that would be wrong (a betrayal). The real value of the Euro should be approximately 7 ATS or 1 DEM.
 

Yours sincerely

Ernst Berger

Dear Mr. Berger,
Thank you for your letter in German which we have translated.

The problem you are concerned about is how the weights were decided for each currency in the ECU. (As I explained 1 Euro= 1ECU). You are right that this is not exactly clear. If you turn to the encyclopedia on this site you will see that the weights were determined principally by relative GDP adjusted for their share in intra-EEC trade. As far as I know the EU has never published an exact account of how this adjustment was done (the latest in 1993).

As you will know the ECU was fixed in terms of a fixed amount of each currency. It steadily fell in value relative to hard currencies like the DM and the dollar because of the devaluation of the lira, peseta and escudo particularly which formed a fixed proportion of the ECU 'basket' of currencies.

However the value of the Euro in terms of DMs or Schillings is unaffected by the ECU basket. The reason is that the DM/Schilling were moving freely against all currencies and also the ECU (apart from the efforts within the ERM to stabilise EU currencies) until 01/01/99, so their value against the Euro was set by the market (their market value against the ECU).

Therefore what you have today in the value of the Schilling against world currencies like the dollar or pound is the effect of market forces, not EU bureaucrats. The Schilling has fallen in value because before 1999 the DM fell against the dollar; and after 01/01/99 the Euro has fallen another 20% or so against the dollar.The cumulative fall of the DM against the dollar has been one third- ie now you can get one third less dollars per DM than in 1995.

So there is no conspiracy- just market forces as markets have decided that DMs/Euros needed to be cheaper during the past five years.
 
yours sincerely,
Patrick Minford
 
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14 Mar 2000

Dear Sirs,

at first I beg you pardon for my English. Please let me know if some is unintelligible for you.

My meaning is:

the rates of exchange from the EUR (Euro) currency are the greatest manipulation (swindle) of the last years. I mean the determination of value by the installation. (so 1 EUR = IEP 0,787564 - 1 EUR = DEM 1,95583 - 1 EUR = ATS 13,7603 and so on). These rates are much too high. These rates are a lie to all citizens (with the exception of a few people, who lie to themselves). The statement (public announcement) of the correct calculation of the EUR from the side of the authorized departements by the EU (Austria is included) is not (was not) democratic and only comparable with procedures in a dictatorship.

Do you know anyone who knows how the EUR is correctly calculated (must be calculated by the installation)? I mean a complete calculation (demonstrable and so someone can revise). Accentuation to complete, because imperfect knowledge is noted.

If yes, please give me these informations. If not, I think, you should be thoughtful and perhaps I can help you to find the truth. Please give me an answer about it.

Why I'm writing to you? There are more motives.

  1. because the Austrian Chamber of Commerce puts out my critical subscriptions in her discussion tribunal
  2. in Austria I can't find a newspaper, an organisation, a journalist or anyone else to make a discussion about this problem, till today.
  3. I want many people to learn the truth about this problem.

I am not fundamentally an enemy to the EU and to the EUR, but I am for honesty and fairness.

At least I'd like to aks you if you could probagate this mail to all the other interesting groups (including newspapers and so on) in England or have I to do it?

Best regards

Ernst Berger, Traun (by Linz on the Danube)

Dear Mr. Berger,

Thank you for your letter. I am not entirely sure what you are driving at. The method used to determine rates per euro was essentially as follows:

  1. the euro should be worth the same on Jan 1 1999 as the Ecu
  2. the bilateral exchange rates of each currency in the euro should be the same as in the period of about a year before that date. (During this period it was the aim of the Excahnge Rate Mechanism to keep them stable relative to each other withing quite narrow bands).
This method was approximately carried out. I am puzzled what you find wrong about it, maybe what concerns you is the fall in value of the euro since January 1 1999, which has been about 20% against the dollar.

yours sincerely,

Patrick Minford

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13 Mar 2000

Dear Mr Minford

I'm doing a project on why the EU exists and was wondering if you could the following for me.

Explain why the EU and EMU systems exist, and answer this question: Why do countries want to join the EU?

This would be of great help to me.

yours sincerely,

Scott Hollins.

Dear Mr. Hollins,

For a full answer I must refer you to the encyclopaedia on our site which has many entries relevant to your questions. Briefly, the EU was founded after the war in order to create such strong economic links between France and Germany in particular that they would never again go to war with each other. The founding Treaty of Rome also spoke of political union as an aim. Before the Rome Treaty there was the Coal and Steel Community, its precursor.

EMU was set up by the Maastricht Treaty (an amendment of the Rome Treaty) with the proclaimed aim of instituting a single currency for the facilitating of trade and the single market. However, the main objective of Kohl and Mitterrand who pushed it through was to force a large step to political union - they believed a single currency could only work if it was followed quickly by closer political ties.

Countries want to join the EU for a variety of reasons - each country is different. For some (e.g. Sweden, Denmark) it is economic; they fear that excluded from the EU they will lose out in trade and investment. For others (e.g. Spain and Portugal) it is also political - they wish to put their Franco/Salazar past behind them, and the EU makes a return to this almost impossible. For the Central European countries, it is political very largely - they wish to have strong allies against Russia.

Please follow these points up in Rodney Leach's encyclopaedia!

yours sincerely,

Patrick Minford

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1 March 2000

I am doing course work on whether or not WHSmith's would favour joining the Euro. I would be grateful if you could send me any information. Thank you for your help.
 
Edward Formstone

Dear Mr. Formstone,

Thank you for your letter. WHSmith's is a firm that relies heavily on the general prosperity of the British economy and therefore has a strong interest in seeing that we do not join the euro for the reasons set out in this site - especially harmonisation with the heavy interventionism prevalent in the continental economies.

yours sincerely,

Patrick Minford

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25 February 2000

Business Speaks on EU

A group of businessmen and women put their names to an advert in the FT (24th February 2000) which states "...It is therefore vital that the current debate over Britain s future relationship with the EU is undertaken from a balanced perspective that weighs up the practical arguments on both sides..." So in their spirit of balance I wonder what if anything they know about Corpus Juris.

The EU has secretly developed a new legal code that will turn the member states of the EU into a single judicial area controlled by a "European Public Prosecutor". He will have the power to arrest anyone and have them deported to any part of the EU and imprisoned indefinitely without trial.

The United Kingdom is the only country in the EU that has trial by jury, which will be abolished by Corpus Juris, along with Habeus Corpus, and the presumption of innocence. Multiple jeopardy will also be introduced so that if an accused person is tried and the European Public Prosecutor does not get the verdict he wants there will be a further trial or trials until the "right" verdict is obtained. Where was that vaunted British influence on the EU when this lot was planned?

It is perfectly obvious to any rational person that the European Union is imposing a dictatorship on the people of Europe. Those who signed that advert should check their premises because at least one of them is wrong.

David Ellams

Dear Mr. Ellams, Many thanks for your letter.

I am no expert on law but I am assured by legal experts that the essence of what you are saying is correct- that Corpus Juris will destroy many of the features of British justice that we insist upon.

It is perfectly astonishing that those who advance the pro-euro cause do not draw attention to these proposals. The point is not so much that they are directly linked to joining the euro; rather that they reveal the general mind-set of those who are in charge of the euro project. It has become increasingly clear that if we were to join the euro, a club within a club, we would be pressurized into surrendering more and more power over our affairs as part of the necessary 'harmonisation' within the euro-club. No doubt we would also be told that the exercise of the veto in any area would fly in the face of the creation of athe political union 'that is necessary to make monetary union work'. Thus in practice joining the euro would lead to the effective surrender of our veto in virtually all, if not actually all, areas of policy.

It is important that the British people understand what is planned- effectively a covert surrender of sovereignty across the mass of our political affairs. Our people have always been slow to get aroused. However, this project has now got to the point where if they are not aroused, they may- like Gulliver- be tied down with so many silk threads that reversal will be well nigh impossible.

As for those businessmen, alas they have not done their homework, but have allowed themselves to be leant upon by this government for whatever reasons. However, as numerous surveys now show, the great majority of businessmen in this country do not agree with them, and oppose our joining the euro,
yours sincerely,

Patrick Minford
 
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20 February 2000

Professor Minford,

I have enjoyed reading your EuroKnow site, maybe you would enjoy taking a look at my Eurosceptic site (www.maughan.clara.net/europe.htm). However, that is not the reason for the note: I am having difficulty sourcing country by country GDP data for 1972 and latest (not years in between). Is there a source on the Web? The idea I want to show is the relatively slow growth of the Eurozone countries in that time compared to the growth of Switzerland, USA, UK and Asia. Armed with this data the question to ask is, "why hitch up with the slowest growing economies?".

All help or pointers greatly appreciated!

Regards,

Steve Maughan
 
Dear Mr. Maughan,

Many thanks. I like your site a lot and we have put a link to it.

On the issue of data, you will find data for the past decade on the IMF page where the IMF produce GDP from 1991 in their World Economic Outlook (October '99), http://www.imf.org/external/pubs/ft/weo/1999/02/index.htm pointing to http://www.imf.org/external/pubs/ft/weo/1999/02/1099ch7.pdf - the last chapter, with statistical appendices. This only goes from 1991, but if you combined it with the Penn Tables (http://datacentre.chass.utoronto.ca/pwt/index.html) which go back to 1950 you would have a good long series. For 1999 growth rates click on our Euroland economy section here.

Sorry it is a bit messy but these things usually are! The good (much improved) situation is that so much of this sort of stuff is now becoming available on the internet,

yours sincerely,

Patrick Minford

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14 February 2000

Dear Professor Minford,

What are your views on the competitiveness of the UK "PLC" in comparison to the other leading European nations and how do you believe this will effect the decision of UK participation in the Euro.

Thank you for your time,

Yours,
M.C.Ratliff

Dear Mr. Ratliff,

There is a lot about this issue in the question and answer section of this site. However, I have also discussed this question of relative competitiveness extensively in my Telegraph pieces- see especially those on 29/11/99, 25/10, 20/9 and 31/8. The basic point is that the UK is now a much more flexible market economy, adjusting to the new service-led environment. The EU Zone is still pursuing a philosophy of high regulation and 'harmonisation'; for us this can only imply a serious fall in competitiveness, as we revert to higher taxation and more labour market intervention and business costs.

Yours sincerely,

Patrick Minford
 
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13 February 2000

Dear Professor Minford

I wrote to my local M.P, Philip Hammond, on 8th January 2000 in the following terms [below] and have not received any reply. Is this because M.P.'s are now too scared to express any view on European issues for fear of being branded either as pro-European or anti-European?

I did not raise the question of the enlargement of N.A.T.O without any national debate as that was not a Euro issue. However, it raises the same issue as regards accountability to the British public and failure of politicians to follow a democratic process which gives the public a say in these important national issues.

Yours sincerely

Michael Julien

8 January 2000

Mr. Philip Hammond MP
House of Commons
London SW1A 0AA

Dear Philip

The Euro

As a supporter of New Europe, I am writing (at their request) to ensure that you are aware of the concerns we all have about the entry of Britain into the Euro. New Europe and Business for Sterling (which I also support) are not against Europe and they are not party political. They are cross party organisations who support Britain in Europe but not in the Euro.

The main arguments for staying out of the Eurozone are both political and economic. On the one hand it is clear that the agenda of many European States is to drive political union using the Euro as a "battering ram" and on the other hand the economic case for joining is unsound. I will not rehearse the latter arguments here but would like to make some points of my own.

Firstly, when we voted to join the EEC in 1974 we all thought that we were joining an "Economic Community" of relatively few states. It is now clear that with "Enlargement" the community will include as many as thirty countries within ten years - many of whom will be joining soon after shaking off the Soviet yoke and will have very weak economies.

It is clear that the burden of supporting these new entrants will be very great indeed (regardless of whether we are in the Euro) but there appears to be no mechanism for allowing the British public to vote on this issue. The only time they will be asked to vote will be on entry to the Euro and it is crucial that this issue is brought to the surface before then.

I have always felt that the Maastricht Treaty was a Treaty too far and would have been much happier if we had not signed it at all. I was relieved, however, that the Conservative Government was able to negotiate "opt outs" from the Euro and from the Social Chapter but those are now being eroded by the Labour Government.

Where does the Conservative Party stand on the issue of "Enlargement" of the EU and what stance will it take on the Euro when the referendum is eventually thrust upon us - as is now likely? Is there anything I can do to support you in making these arguments or does the Conservative Party want to remain neutral?

Best personal regards,

MICHAEL JULIEN

Dear Mr. Julien,

I do not know why Philip Hammond has not replied: Conservative Party policy on these matters is fairly clear. On the issue of enlargement I think you are too alarmist. Admitting extra members will not lead to more financial support for the simple reason that the EU has no money to provide it. On the other hand extra members should lead to more flexibility in the operation of the EU- something that is desirable from our viewpoint. As far as consulting the people over this, I am not aware that it has ever been considered sufficiently 'constitutional' an issue to be put to a referendum.

I hope you will get an answer from Mr. Hammond soon,

yours sincerely,

Patrick Minford Return to top



13 January 2000

Dear Professor Minford,

This government has stated that the only test for British membership of the eurozone is whether or not the Euro is beneficial to our economy. The prime minister does not believe that there are any democratic or constitutional consequences to joining the Euro. Well I think that this is wrong and I have devised '12 Democratic Tests' that must be fulfilled before we can consider entry into the eurozone.

1. Are the public and the British parliamentarians aware of the constitutional implications of the Euro?
If the answer is no we cannot join.

2. Will the creation of the Euro lead to further political integration of our democracy? Or more qualified majority voting (on non-monetary issues)?
If the answer is yes we cannot join.

3. Will the Euro lead to the creation of a new state?
If yes we cannot join.

4. Will the Euro lead to economic policy being made by unelected commissioners and unelected bankers?
If yes we cannot join.

5. Will the government or executive of the eurozone (the EU commission) be democratically elected?
If no we cannot join.

6. Will the president of euroland (the president of the EU) be democratically elected? (either from being the head of the largest elected party or through direct elections)
If no we cannot join.

7. Will the parliament of the eurozone (the EU parliament)have scrutinising and amending powers to match those of the parliament of the UK (sterling-zone)?
If no we cannot join.

8. If economic policy is to be made by the EU, will we be able to vote for pan-European political parties?
If no we cannot join.

9. Can the eurozone/EU institutions ever compensate by means of subsidiarity or devolved power, for the lower democratic-quotient of the EU in comparison to nation-states?
If no we cannot join.

10. Is there sufficient openness in Eurozone/EU institutions in comparison with UK (sterling-zone) ones?
If no we cannot join.

11. Is there adequate safeguard for preventing a corrupt executive in the eurozone?
If no we cannot join.

12. Is there any provision for a nation to leave the eurozone once entered, if her people had decided that the Euro was not working?
If no we cannot join.

Ultimately all these amount to one all important question, the 13th, (unlucky for them and not us) which is, will the eurozone be less democratic than the United Kingdom (sterling-zone)?

If the answer to this is yes then we cannot join without abandoning all sense of honour or principle of political justice.

What do you think of these 'democratic tests'? Can they be refined? Are there too many or can you think of any more that we could ask the Euro-statists?

Yours Sincerely,
James Wild

Dear Mr. Wild,

I like your democratic tests very much. Indeed I believe that the deep unpopularity of the euro proposal in the UK is heavily due to these political aspects. However, up to quite recently the British were willing to go along with EU proposals in spite of their political unpopularity because they felt that economically they had no real alternative. Now that the economic arguments as well are seen to be so strongly against the euro, people feel freer to obey their political instincts. What your tests do is to spell out the many dimensions in which the euro project conflicts with the political criteria of self-government we rightly prize so dearly.

When we come to all the tests, the number is fairly arbitrary - just as Mr. Brown's five economic tests are. The attraction of 12 is that they are symmetric with the 12 'stars' of the EU for which the euro is the flagship. As you say, the basic test is the thirteenth- will it reduce the democratic quotient of the UK? Just as Mr. Brown's five tests amount to- will entering the euro damage the UK's economic interests? I would drop the 10th which is vague and make your thirteenth no.12 (just as the 5th economic test is general- on growth and jobs).

Yours sincerely,
Patrick Minford Return to top