Should Britain join the Euro after all? Patrick Hennessy, political editor of the Sunday Telegraph, bravely asks the question over at Three Line Whip, arguing that one can no longer claim the British economy is doing better than the Eurozone’s. A provocative point, certainly, and one we’re likely to hear much more often as the consequences of Gordon Brown’s reign of error at the Treasury hit mortgage owners and shoppers.
My answer is pretty simple. One cannot conceive of a way that the Euro would help us. The arguments used ten years ago by the pro Euro campaign – more jobs, lower prices, increased trade – have been proven to be false. If they were true, there would be some sign of them in the Eurozone member countries. The City flourished outside the Eurozone. Paddy mentions the political reasons to join the Euro and says Cameron would send a powerful signal that he has changed. The problem is that the Euro is an economic question: would it help us to have interest rates set in Brussels? Our economies remain unalighed, and structural EU unemployment is even worse than ours. If we had adopted the lower EU interest rates, the orgy of cheap credit would be even greater, the asset price boom even greater, and the bust (and repossessions) even greater.
Right now, a furious row is being conducted behind the scenes: Brown wants lower rates for mortgage relief and Mervyn King wants, if anything, higher rates to curb inflation. But how great it is that we can have this decision in Britain, given how many homes and jobs can be saved by British control of British monetary policy. Otherwise, we would be waiting haplessly for the next decision from the ECB. It is a huge, huge sacrifice to make. And aside from saving a few bob in the forerign exchange, what would we gain? That is why, in my view, the case for uk Euro membership is dead and burried, and the only question is which country will be the first to pull out of this unhappy project.
Comments