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Letters to the editor
Dear Professor Minford,
Just a quick note to say that as the owner of a business in a semi rural area of which people depend on, I will not be accepting the Euro for as long as it is possible.
I find it extremely upsetting that this country is being run by Europe and that we have lost most of our values and traditions.
I want to keep the pound to give us that separation from other European nations that will drag us down in the gutter with them.
Three cheers for Her Majesty The Queen for inadvertently disproving the Euro by not accepting it at Royal attractions.
Ordinary people in Great Britain do not want the Euro.
TONY BLAIR WHY DO YOU NOT LISTEN VERY CAREFULLY TO UK CITIZENS AND YOUR HEAD OF STATE. WHY BOTHER WITH CHANGE WHEN PEOPLE DON'T WANT IT? OPEN YOUR EYES AND EARS!!!!!!!
Dear Mr. McCluskey,
Thanks. Yes, you would be unwise indeed to accept euros in your business, as it means that you would carry the cost of exchanging them back into pounds. Let your customers buy them and pay the cost!
As you point out, there is a strong political case against joining the euro; but there is also a strong economic case against which you can read about on our page or else on www.no-euro.com (The Economic case Against the euro can be downloaded there.)
The idea of the European Union is the integration of, so far, fifteen different political and economic structures into one federal state like the USA controlled by Brussels.
How can this be? The USA was designed to operate as a federal democratic republic since 1776 and has developed as such.
Europe on the other hand has seen a few attempts at unifying the continent. All attempts went disastrously wrong.
I am of the opinion that each member state is looking out for itself.
The two most notably examples
Britain - the French government which called for the ban on British beef. I still believe that this ban is still in place even thought the EU has declared it illegal. Our other EU comrades followed and ban our beef!
Austria - Jorg Haider's party forming a coalition government - Austria's comrade deserted her. Why because the EU governments did not like the idea of a fascist party being apart of any government.
The members were certainly unified in their condemnation of another member state.
The Republic of Ireland - The Irish government declined from signing the Nice Agreement. One can only assume that the plans for expansion threatened the large subsidies they receive from Brussels. However the EU seems to of gone ahead regardless.
There is talk to a two tier system - One track for members want to accelerate the process and the other for those more cautious. The idea to prevent the Union from being bogged down.
The single European Army - Member State's Defence Ministers could not agree on the make-up of such a force.
No evidence of union so far.
The creation of the Eurozone. The British government has been threatening job losses. Mr Blair, according to the Daily Mail, has even stated that our economy depends on the Euro doing well. I wondered how we managed when we had fourteen individual economies to contend with.
I have also serious concerns about the lack of control of the economy should we decide (heaven forbid) to adopt the Euro. Our taxes will be sent to Frankfurt (Germany), we will eventually have to have a single taxation system controlled by Frankfurt.
Mr Wim Duisenburg refused to take action against the little crisis the Euro had in 1999 will he take action if the Euro hits another all time low. We only have too look at the state of Argentina's economy. They tied the Peso to the American Dollar unfortunately the Peso has crashed and their economic system is down the pan. I have fears that should we something like the Argentine crisis could happen and that our unified economy could collapse causing widespread unemployment etc.
I find it amusing that the Euro will help consumers to get a better deal. The Daily Mail has reported that in Germany there have already been price hikes. The idea that an EU (Dutch) citizen could pop into Belgium to by a car cheaper than back home. Surely this will create areas of wealth and areas of poverty?
I have also read that one million Euros have been stolen in two separate bank robberies in Italy and Interpol reckons that the money has found its way to forgers in Kosovo and Macedonia. The BBC News website has said that tracing what the BBC calls "Black Money" is problematic at the best of times. They gave an example of one town on the German Austrian border. The only way to this town is by road through Germany. The town's legal tender was the Deutschmark however its banking laws came under Austrian jurisdiction which are similar to that of Luxembourg and Switzerland. German authorities have tried to place checks on depositing money into bank accounts in these countries.
If the above is true the EU economy could be flooded with counterfeit notes and coins.
The Daily Mail also provided a few facts about the Euro
The government plans on introducing the Euro through the back door (according to the Daily Mail)
Our government (Mr Blair) has fears that come a referendum we will vote NO. The Blair administration is hoping that by the time they have to hold one everybody will just vote yes because we will be use to it. A 'fait acompli' situation!
Dear Mr. Williams,
many thanks for your long and interesting letter. Clearly, you are right that the EU is a long way from 'integration' and indeed is in innumerable ways a highly imperfect organisation, to say the least. Joining the euro would commit us to many new problematic aspects of the EU, mainly of course monetary ones. The 5 tests will not be passed in the foreseeable future.
As for other aspects of the EU, we will have to wait and see whether improvement occurs. We must hope it does,
Dear Professor Minford,
I have read with interest the letters and articles on your site, "euro-know". The best thing that can be said about the single currency is that it is an insanely risky gamble. I saw a recent article describe it as vanity publishing, which sums it up perfectly.
Reading Bernard Connoly's whistle blowing book, "the rotten heart of Europe" several years ago, what was striking about the ERM was that it was essentially an exercise in deceit, and a remarkably successful one at that! Why were so many people deceived, people who should have known better. I was all for the ERM when we were taken in (pun intended) but then, I'm not an economist and in those far off days I still entertained the foolish notion that the establishment of this country would do nothing to deliberately damage it.
In a few months time, they will have literally burned their boats, and the grim end game will be underway. The question I would like to put to you as a professional economist of some repute is this: to what degree will it be possible to disguise the realities of the single currency from the markets and from the nations in its clutches? And what exactly will a country like Ireland or Spain be able to do when the strain reaches breaking point.
As for British membership, there is that small matter of a referendum. Public opinion is strongly against, and it really is difficult to see what will turn it round. The British people just know in their guts that it will be bad for them, and I am very much of the opinion that their intrinsic common sense will prevail. But British membership is vital if the vichy jackals are to get the jobs and thirty pieces of silver that they seem to believe awaits them. They must be getting desperate and desperate people do desperate things. Would it actually be possible to introduce the Euro by stealth? I can't see how myself, but could it be done. Is there any way the economy be deliberately damaged to make it more like "euroland"
And one final question. If we were to one day wake up in the nightmare world of the single currency, what exactly would happen to some £2000 billion of overseas assets?
Thanking you in anticipation.
Dear Mr. Dobed,
Thanks for your letter.
It will, as you say, be a testing time for the euro-members as they continue to attempt to deal with different country shocks via a single interest rate. So far the strains have been acute for the smaller countries like Ireland, the Netherlands and Spain. But politically they have been the most eager to stay the course. One would predict that the countries where popular dissatisfaction is most likely to lead to unwillingness to continue with the euro, would have the most influence on euro interest rates - fundamentally those countries are Germany and France. So far these two have in practice dictated euro policies- a sliding euro and lowish interest rates. The ECB cannot afford to upset them as should either leave, that would be the end of the euro. So it is likely that the smaller countries will go on getting the rough end of the single interest rate - but will probably put up with it... But all these problems are well understood by the markets which consequently will tend to keep the euro weak.
As for the UK, the referendum is indeed the stumbling block for the euro-philes. No, the euro cannot come in by stealth - of course some shops will accept euros as they have always accepted francs, DMs etc. But that is nothing to do with the replacement of sterling- the vast bulk of home transactions will continue to be done in sterling which is a good currency nowadays (not say like those Latin American currencies where dollars have for long seemed an attractive alternative).
I do not think that damaging the economy by introducing yet more EU regulation is likely to go a lot further, because of Treasury opposition. Nor is it helpful to the cause of joining the euro because it would simply make clearer how damaging greater integration into the EU would be.
In short I think the forces ranged against euro entry are strong ( see the Economic Case Against on www.no-euro.com) and winning a referendum to join would be very hard.
(Our overseas assets would not be affected if we joined as their value is set in world currencies and stock markets. It is the operation of our economy that would be damaged.)
2 January 2002
Dear Professor Minford,
Thank you for your prompt, courteous and informative reply.
A yes vote in a referendum will be difficult, to put it mildly, and I suspect the Vichyites have no real idea of the degree to which they have hamstrung themselves. The economic case has to be "clear and unambiguous", which it just as clearly isn't (will it ever be?) Also, a jubilee year is perhaps not the best of times to begin a campaign (or perhaps I should say intensifying a campaign) of essentially rubbishing this country, it's economy and traditions. Nor is it a good idea when the public make it perfectly clear that sorting public services is a somewhat higher priority.
For my own part, the more of this arrogant hubris I see, the more times I am told that it is inevitable, the more determined to resist I become. If there ever is to be a referendum, I will be there to vote no even if I have to have my deathbed towed to the polling booth by unicorns!
You mentioned the strains on a number of countries being acute and likely to get worse. Could the strains on one of these peripheral countries be sufficient to actually blow it out? "Political will" is all very well, but it is no match for the realities of the markets, and the people who have never been asked could get very angry indeed. Even if a country as small as Ireland had to be ditched this could have severe repercussions. A mere two years in the ERM did massive and unsustainable damage to this country. The countries of mainland Europe may be more in sync, but that just means it will take a bit longer. Watching from outside, this should all be rather interesting.
I appreciate that you are very busy, and once again, thank you for your time and attention.
Dear Mr. Dobed,
Many thanks. The chance of some country leaving is always there, I agree. If the shock to it is large enough and the ECB response unhelpful enough, it is possible. A lot would then depend also on the politics of the EU in that country; if for some reason it was becoming euro-sceptic, then the political 'glue' would no longer be there. In general, one cannot regard any sort of currency arrangement as truly 'permanent', except in conditions of outright conquest - not yet something we are dealing with...
The Euro nationalises exchange rate risk, shifting that risk into other parts of the economy, namely, gdp growth, unemployment and inflation. As with all nationalisation, fixing exchange rates is inefficient. Exchange rate risk is far more efficiently managed by private sector firms, for example, by using derivatives. Attempting to fix currency values via the Euro only places more strain in other areas of the economy - the volatility of gdp growth, unemployment and inflation will only increase in the eurozone.
Politically, the EU Commission are not on the same level as the 'founding fathers' in the States. This is of vital importance and the reason for the depreciation in the value of the Euro itself. The democratic deficit, in terms of, not consulting the electorate across Europe, very little information flow from the top of the EU to the taxpayer on the street, the lack of democratic decision making bodies in the EU; these factors all contribute to a lack of confidence in the currency by international investors. These weaknesses reveal themselves all the time.
In fact, the great debate should not be about the rate at which we join (favoured by trade union leaders who know nothing about economics, and have never made anyone any money) but the debate should centre on the decision making process of the ECB and also the other main EU bodies.
Dear Ms Sinnott,
thank you for your comment.
As it happens money is generally a 'national' instrument, provided that is by the state. Yet in origin and in history this is not so. Nor is it clear that it must be a state to provide money efficiently. Had states not intervened to nationalise moneys it is interesting to speculate what sort of money might have evolved. Maybe gold certificates issued by different banks which could in principle move in value with the bank's reputation.
In the world we live in the euro will, as you say, generate extra variability in GDP etc. This is the major cost for the citizens of euro-countries; supporters claim benefits from the monetary integration of markets but they are likely to be raher small, certainly in the UK (as discussed in The economic case against the euro, on our page and also on www.no-euro.com)
However I am unsure that 'democratisation' of the EU institutions is possible- and maybe not desirable as it could be accompanied by a huge increase in powers. Certainly in its present structure there was no hope of a democratic decision; the euro policy was decided by the elite, national nad EU, who run politics in Europe, and they were never going to risk plebiscites. Had they had one in Germany it would have been lost.
December 28, 2001
Dear Professor Minford,
May opponents of the euro learn anything from the collapse of the Argentinian economy. Is it, in your opinion, related to the pegging of their currency to the dollar? Was this a factor in Argentina's economic downturn? Can eurosceptics lean anything from Latin America?
Also many Latin American states are undergoing dollarisation. Is this not similar to the introduction of the single currency in Europe? Should eurosceptics also oppose dollarisation or are they quite different?
Dear Mr. Wild,
It is a very good question. One point is that for an economy which sells heavily to the dollar area, as Latin America does, tying to the dollar should create not too much instability because of the fluctuations of the dollar against the euro. So if you are going to tie to or adopt a currency, for them the dollar is the one.
However, tying to the dollar creates an inability to use the interest rate for stabilising one's own economy. This may be worth giving up if your previous currency was highly unstable (e.g. high inflation) in which case interest rate movements are destabilising rather than stabilising anyway.
The difficulty for Argentina and others has been the second one: that you must be able to have tight fiscal discipline to make the tie viable; otherwise you default faster.
The parallels with Europe therefore are there, if you substitute the euro for the dollar throughout.
Dear Professor Minford
There is the pro EU argument of course that the United States is a successful example of what the EU will be.
Please can you inform me of the arguments why the EU cannot be compared to the US, other than common language and better mobility of labour in the US.
Many thanks and Merry Christmas
John Roberts (Kenilworth)
Dear Mr. Roberts,
thanks. There is a great deal about this in the Economic case against the euro, which you can see/download from www.no-euro.com. Or see the www.euro-know.org page for masses of stuff (in particular the opening letter). But in a nutshell the US has complete labour mobility (together with a totally flexible labour market) so that this marlet acts as a good alternative to monetary stabilisation; also it has a large central budget that provides extra shock absorption. In general the euro area could imitate the US if it went down the free market road. Unfortunately it is dead set on going in the opposite direction, for all the rhetoric in some places.
Dear Prof. Minford,
Have the recent economic events in Argentina any implications for the Eurozone, given that the country has pegged the Peso to the Dollar? Could the "No" campaign here make use of this example?
Or is Argentinian government policy solely to blame, for carrying out economic policies which would not have been allowed in EMU?
Dear Mr. Johnson,
There are certainly lessons from Argentina. Basically they are about using the exchange rate as a tool for lowering inflation without adjusting other policies to fit. Had Argentina introduced supply-side liberalisation at the same time, its wages and prices would have adjusted downwards, and unemployment would have fallen, even though the exchange rate was fixed. Then the political uncertainty about monetary policy (would there be a devaluation to try to 'fix unemployment'?) would have subsided. Instead there was never really full political acceptance of the tough exchange rate link; hence a continuing risk-premium on interest rates as speculation about possible devaluation continued.
The euro situation for joining countries is rather different; basically because the political commitment once you have joined the euro makes withdrawal virtually impossible. So speculation of the sort Argentina faced is minimal, even though some countries (like Italy) faced the same unemployment difficulties as Argentina. Interestingly, though Italy and others did face the same problems when they joined the ERM - which was an easier system to get out of.
December 09, 2001
Dear Prof. Minford,
Thank you very much indeed for that helpful (and prompt!) reply. I find that while the "surface" phenomena of the Argentine crisis are well-reported in the media, the underlying (and much more important) economics are ignored.
Incidentally, my interest in the Argentine economy began in 1958, when, as a young Radio Officer on an outward-bound vessel trading between the UK and the River Plate, I had the task of asking every homeward-bound ship of the same company what the latest Peso exchange rate was. I was allowed to spend £8 a month from my salary, and during a nine (yes, nine!) week stay in BA, while they slowly unloaded our mixed cargo and eventually loaded a bulk cargo of grain, I lived like a king. I really learned a lot about economics during that time.
Thank you again.
Dear Professor Minford,
If you have already covered this I'm sorry.
It is now 14 months since the Danes said no to the euro & they've just voted in a new centre right government I believe.
At the time of their referendum the Danish elite,almost to a man claimed 'No' would result in economic collapse & their prophecies were quite apocalyptic. Fortunately they were ignored.
Surely it would be useful to look back & comment on their 'collapse' & see the 'yes' lobby were telling porkies. It was all wishful thinking & scare-mongering on their part. Quite cathartic for the rest of us though.
I read in the WSJ Europe recently that Danish unemployment was continuing to waft downwards. Some bullet points about Denmark's performance relative to the claims made would I think be appreciated by all your readers.
Thanks in advance.
C.A. Yates (mr.)
Many thanks. I agree, it would be instructive. The Yes campaign claimed economic disaster as you say; yet that was always silly as Denmark was tied to the euro through a pretty rigid fixed exchange rate, so joining the euro would have changed nothing substantive.
The No campaign was fuelled mainly by the suspicion of the EU controlling social welfare payments (i.e. harmonising them downwards) - this tends to be the opposite of the sort of harmonisation we fear! But the essential point is that the Danes disliked the extra powers given to Brussels, which is the same dislike here.
I will certainly write about this at some point,
25 November 2001
I believe, with the Magna Carta Society, that the loss of Sovereignty that has accompanied our entry into what is now called the EU has placed Her Majesty the Queen in breach of her Coronation Oath.
I am old enough to have seen her, on TV, when she took this oath and so was crowned our Queen. Her sincerity when she took the Oath was palpable, and I believe it is only by deceit that she has been induced to break it. The advice to her to give Royal Assent to the Bills ratifying the various treaties that have landed us in our present position are the cause of the breach. As the breach is tantamount to an abdication, the advice comes within the definition of "Encompassing the Death of the Sovereign" and is therefore all High Treason. The chief persons involved are Ted Heath, John Major and Tony Blair. I am preparing a formal charge against these people and their henchmen, Heseltine, Patten, Clarke, Hurd, Howe etc for presentation to the Commissioner of the Metropolitain Police requiring him to take action to arrest and arraign these felons. The main charge will include separate charges of Mis-Prision of Treason, also punishable by life imprisonment, against the Foreign Office officials who, it was disclosed in the papers released early this year under the thirty year rule, knew that joining what was then the ECC involved loss of sovereignty. They told Ted Heath this, and yet kept silence when he did it anyway. For Ted Heath now to say that we lost "no essential sovereignty" is similar to the young girl's reply to "I hear you've had a baby!" of "Yes Vicar, but it was only a very little one!" and is equally beside the point. This charge will take some time to prepare and then more time to force the Commissioner to act, with threats of arrest for Mis-Prision if he refuses, so in the mean-time I am circulating the attached Petition to Her Majesty. It is in MS Word 97 format. I would be grateful for any assistance in its further circulation and the gathering of as many signatures as possible. I would like to have a whole truck load to deliver to Her Majesty when I present it.
I take your point and I have to agree with you. Unfortunately, there is no evidence that the courts take this at all seriously. They take the view that the oath is subject to the advice of the government of the day and feel unable to intervene in what they see as essentially a political process. You will recall that Parliament is sovereign in this country and can at any time legislate to ensure that its will prevails, including over the Queen's actions. Therefore sadly I am pessimistic that such petitions can succeed by the nature of our unwritten constitution.
It seems to me that if the UK ( God forbid ) 'accept' the euro, then we will have huge unemployment as people will not be able to buy British products that are produced more expensively. is it not import and other taxes which makes prices relatively comparable? Would these taxes not have to be abolished or adjusted in line with the rest of the union?
Political correctness in Europe appears to be growing sillier by the day with the minority having so called rights which threaten the security not only of countries but of individuals. Ethnic majorities are now discriminated against.
Germany used to be a nice and prosperous place to stay but since the fall of the Berlin wall things have changed dramatically, particularly in Berlin. I am not saying the fall of the Berlin wall was bad but look at what happened to the economy of Germany post-wall.
Do you think this scenio is likely to happen on a bigger scale particularly is so-called Russian states want to join the EU?
Thanks for your letter.
The threats are various. The first is that 'harmonisation' will indeed produce unemployment here; another is the problem of state pensions on the continent- the big three states have state pensions that are facing bankruptcy and will require large tax increases, which could possibly wind up partly being paid by us if we join. The third problem of monetary policy is that with the ECB in charge we will be unable to control the boom-and-bust of our economy- without the ability to set out own interest rates the fluctuations of the business cycle could get a lot worse for us.
These economic problems are so serious that passing the 5 Treasury tests genuinely is remote, as explained in the Case Against the Euro (on www.no-euro.com). Therefore it is genuinely worrying that Mr. Blair seems so keen to press ahead anyway. We must try to dissuade him,
Dear Professor Minford,
My concern is not about replacing the Pound with the Euro which would certainly terminate the nuisance of having to obtain foreign currency when travelling on the European Mainland and the attendant nuisance of doing mental gymnastics when over there to assess the cost of all prospective purchases. No, that is not the problem and the pound could disappear with no more than the transient difficulties of changing to decimal currency several years ago. Can there be anyone who would wish to go back to the chore of adding, subtracting, multiplying aand dividing in Pounds, Shillings and Pence? No, the problem with the Euro per se is that it will bind us permanently to a vast organisation the leaders of which have to-date demonstrated a level of managerial incompetence seldom seen. It is not long since the whole team of Commissioners, including their leader, were sacked for mis-management, nepotism, cheating and goodness knows what else! Are we really to believe that, under these circumstances, the apparantly firm intention to recruit further and poorer members from Eastern Europe would be a wise move ? The patently obvious argument for Britain NOT to take up the Euro is that it will bind us permanently to what will be a very badly constructed ship sailed by a captain and crew of very questionable ability to operate the vessel already under their control. When it eventually sinks let us be glad that we are not part of it and watch what will be an unfolding total disaster from dry land.
Dear Mr. Percival,
Thank you for your letter.
I take your point about the EU Commission. You are of course right about this. However, joining the euro puts the UK economy under the monetary control of the European Central Bank, with further control residing in the hands of the euro-member sub-committee of the EU's Economic Ministers' Council (Ecofin); the latter can control decisions on fiscal and other policy. The Commission is only modestly involved in the last (at least in principle) and not at all in the first.
The dangers are that our monetary policy will be very badly adapted to UK economic conditions; and that other policies agreed by the euro-council will also damge UK interests (eg via harmonisation and perhaps decisions to bail-out fellow-members). These things are discussed at length in the Case Against the euro, just published by the No campaign; you can find it on www.no-euro.com
Dear Professor Minford,
Thank you for your enlightening reply to my E-Mail of the 23/11/01which has given me food for further thought on this matter. It also gives rise to concerns about how the referendum will be conducted, particularly about how the question put to the electorate will be phrased. I'm sure that it will be not be a simple Yes or No to put our crosses against ! I have read somewhere that the question might be - "Should we join the Euro when the conditions are right for Britain" OR "Should we never join". Well, this is a carefully crafted question and put this way would be to load it in favour of the former which is what the present government want by giving them "carte blanche"
The real problem in my opinion is that referenda a really only suitable for matters of a moral flavour, like capital punishment. On such a complex question as the Euro, for which a crystal ball would be the only tool of any value, voters are likely to base their decision on purely sentimental or nostalgic considerations. Some will take the view that "better the devil that you know than the devil you don't know" and opt for the status quo. In the other direction the cry "Out of Europe Out of a Job" will produce a lot of "yes" votes. All of this indicates to me that the referendum is not the right way to go about it. The most worrying aspect of the whole thing is that, whatever decision is taken, it will be irreversible ! A leap-in-the-dark if ever there was one.
My solution is to select a qualified panel of, say, 1000 pundits drawn equally from Industry, Commerce and Financial Academics under the chairmanship of the Chancellor and to let them decide for us. Then there would be something tangible upon which to lay the blame if everything goes wrong.
Dear Mr. Percival,
I share your worries.
However, to select 1000 pundits would be a grave error. Such people are easily suborned and pressurised by the establishment- not crudely but subtly. In this case the establishment would be this government and those in its pay- a very large group.
At least it is impossible to suborn the British people. Furthermore, they do listen carefully I believe to experts when they feel they can trust them. There will be debates on TV etc etc and the people can be trusted to follow those they believe to be reliably telling the truth.
Don't let Blair sell the UK down the river, No to the Euro, The present government will dump the pound whatever the outcome of a referendum. Do we really want to continue being dictated to by a European government. Exactly what Hitler wanted during the last world war. A vote for the Euro is a vote to be governed by Germany & France. Stuff the Euro. We already face this mickey mouse currency in January here in France and we never were given a referendum or a chance to oppose it. Already we are being dictated to as to what we can have or do.
Dear Mr. Guerdin,
If Mr. Blair were to lose a referendum, he certainly would not be able to bring it in for the UK. That is not how our democracy works!
Thank you for your comments,
6 October 2001
Many thanks your reply, However democratic or not, I would not trust Blair any further than I can throw my house with one hand, He has already indicated that the UK should be at the heart of Europe and that should be warning enough. Make no mistake he will sell the UK down the drain given half the chance. It is also quite obvious he has designs on being President Blair with his pet rat as first lady. I am sorry if my feelings over this are somewhat blatant, but as far as I know we still are able to enjoy free speech, for how much longer one asks, as not so long ago a journalist was fined in the European courts for criticising the European parliament, so how much longer will we be able to exercise our opinions freely? I have a good contact here in France and we are able to keep abreast of events in Brussels, I can assure you feelings are running very high over many issues amongst the ex-pats here in France and probably elsewhere. At least the English may be afforded the right of a referendum on the Euro, we here in France were told we were having it and that was that, democracy here in Europe has a forked tongue. I subscribe to a UK magazine called 'This England' if you care to read it it will give you a much better impression of exactly how things are and how strong feelings are running within the UK. Any politician ignores the electorate at their own peril. History has an uncanny habit of repeating itself, due mainly to the short memories of many politicians. Many would now be advised to note well history's past performance and perhaps learn something from it. However the reality is that they will not do so, and as such we should be prepared for the worst. A referendum compiled by an English language newspaper here a couple of months ago showed 65% against the Euro. We are already experiencing inflation here as some idiot French politician stated publicly that as of January 1st no one will be able to increase prices, this stupid remark ensured that nearly all retailers have already put prices up by as much as 10%. The decreasing in value of the Euro as of late will ensure that we will be paying a damn sight more for fuel as of January next year, this of course will in turn put prices on elsewhere as a knock-on effect. I have a company in Cyprus, and we as a matter of course refuse to have anything to do with the Euro, all payments must be either in Sterling or US Dollars. Suppliers are told any quotation in Euros will disqualify them from any tender. This is our way of rejecting being told what to do by the minions in Brussels. Rumour has it that the Isle of Man may switch to US Dollars as a currency if indeed the UK follows the rest of the sheep in Europe.
Yours very sincerely
I can see why you are suspicious. But to be honest you are getting this from a French government for whom democratic process means something very different. While Blair might like to do the same, he is subject to a much tougher democratic system,
7 October 2001
I sincerely hope so for both the sake of you and the British people. Actually I pay little attention if any to the government here. I tend to treat French law the same as the French treat European laws, which they appear indifferent to. Every time they get fined for some breach of European law, they never pay the fine? You are right democracy here is a joke.
I have one question about joining the EURO; if we did and we had all the harmonisation that the powers that be would like to impose on use how could the likes of NORTHERN IRELAND/NORTH OF SCOTLAND/WALES and so on attract inward investment?
Would all big companies not want set up on main land EUROPE?
I would be interested to hear your thoughts
Dear Mr. Gregg, If there was the considerable harmonisation, this would cause a serious loss of UK competitiveness which would certainly damage jobs in these parts of the UK.
Dear Mr Minford,
I have been reading you're site with mixed feelings, mainly because of the way you are expressing yourself against the Euro. You are complaining about propaganda by the government and multinationals, but I believe you are the one twisting the facts around! On the other hand, you are right that we (the Dutch) are being forced to the Euro. But still some "pro-Euro" comments:
Not only does the Euro make the international trade a whole lot easier than with all the different currencies now, but it also creates a very healthy competition between all European companies. My guess is that it will actually improve price levels after a year or so in the UK. I do not know exactly how much higher price levels are compared to Holland, but I do know that (due to the high rate of the Pound Sterling) prices are incredibly high. This does not improve the international trade at all, e.g. take a look at the car industry; any idea how many cars are bought on "the continent" by UK residents? The Euro will make life cheaper in the UK, also good for tourism...
And by the way, since the currency is used in different country's it will not be accepted that one country's economy "crashes". At worst, the "cheap" countries will be more industrialised by the "wealthy" countries, due to the low labour costs, thus improving the economics in the "cheap" countries.
Also your statement on the currency fluctuations being bigger with the Euro to the US Dollar, I would like to inform you that this fluctuates between euro 0.83 to euro 0.88 per $1,00 (some 6% difference). I would not call this big looking at the Pound Sterling the past years. Since we do not have any possibilities to trade in European currency's, banks will have to make money on the other currency's, like the US Dollar. If these do not fluctuate, we'd be paying a lot more charges to the banks for your atm's, bank transfers etc. Plus we'd get a whole lot less interest on our savings!
And when the Euro remains low against the US Dollar, would the export of the Euro countries not greatly improve towards the US? Would that not require the US to buy more Euro's? Would that not mean that the exchange rates go up? (Or am I being too simple now?)
Don't get me wrong, everybody has a right to create their opinion freely, but we are trying to look in the future on this one, and we can have so many different scenario's, that I wonder if this discussion is even useful. My feeling is that to many people look at the Euro with their hart instead of their mind...
Joel Braun, The Netherlands
Dear Mr. Braun,
Thank you for your letter.
I want to make it clear that our page is about UK entry into the euro not about whether other countries should join or should have started the euro.
Many of the points you make I agree with. Clearly for example for a country like the Netherlands whose overwhelming trade is with the euro area matters look quite different from how they look to a country like the UK which has more than half its trade, generally defined, with non-euro (i.e. basically dollar) areas.
Concerning price differences, I have to say it is doubtful that a single currency will cause price equality. Prices differ even between different shops within the same city! The reason is transport and other barriers between markets. In the case of cars the reason is that car companies control their product prices and attempt to maintain country segmentation.
As for bank charges, these depend mainly on competition not on whether there is a single currency. The EU commission report found that currency transfers via the banking system were costless to make - as one can see from credit card purchases one pays little for currency conversion via the banking system.