With France and Germany freaking out with what’s going on in Greece and the euro in crisis we’re not hearing a damn thing from Britain. Makes me wonder if Britain made the right decision sticking with the pound sterling or the wrong decision as they seem to have no say with what’s going on with their major trading partners.
Very definitely the right choice to stay out.
We are concerned of course because the instability of a major trading partner is never a good thing. Also, our banks are exposed to some of the Euro problems.
If it all blows up then we’ll be hit, not as much as say Italy, Spain or Portugal, but it’ll hit us nonetheless.
The only silver lining is that we retain our fiscal independence and are still free to manage our own money so have greater options for action to guard ourselves against potential problems. There may even be major concessions that we can wring out of the EU in return for supporting their current actions.
Europe is not a good fit for a currency union. There is nothing about the UK which would improve Europe as a currency union. Unless the UK has exactly the same needs in a currency as Germany and France in the future they they did well to stay off the Euro. As far as having influence with trading partners the UK’s interest is that europe’s economy is as good as possible, entering into a currency union would not help that.
Britain does have influence in Europe. It’s simply too big not to. And the British press, and the British government, have certainly been expressing their opinion on the Euro crisis. Indeed, it is said that in a meeting of EU heads the other week Sarkozy practically screamed at Cameron and (finance minister) Osborne to keep their advice to themselves. “You hate the Euro!” etc. etc. Oops, touched a nerve there, Nicolas?
The euro is, and has always been, a political rather than a financial necessity.
The real powers behind the EU have seen greater and greater unity as the desired end state and the euro plus the associated treaties of the last two decades have been designed to take us closer to that. Pretty much at whatever cost.
With that background it isn’t surprising that the first real financial hiccup has exposed the frailty of the Euro. Certainly the E.U. will not be the same after this and it will be interesting to see what changes take place.
The thing is, and while I admit I know about… let’s see…carry the one… fuck all about economics whatsoever, it still on the surface seems to me that the British attitude to the Euro has always been along the line of “It will not work. So we will not help, because it won’t work so it’s no use helping”. Which of course is so very circular - kinda like the goalie going “This team sucks and we’re going to lose so I’m not going to make any effort to catch any balls because we’re gonna lose anyway”, isn’t it ?
I’m not saying this whole shitstorm would have been gracefully avoided had y’all joined in the single currency fun and it’d all be sunshine and daisies, of course. More likely you’d be freaking out along with us albeit in a reserved, deadpan and charmingly understating kind of way.
But for once, I’d be inclined to agree with [del]the repulsive little sycophant[/del] my President: if you’re not going to be part of the team ; then keep comments and advice on the team’s playbook to yourselves. Everybody’s a fucking critic 
And now I feel dirty. Look who you’ve made me agree with, Britain ! :mad:
It is absolutely impossible to say what Britain would have gained (or lost) if they had been part of the Euro. If nothing else, the single currency lowered transaction costs and exchange rate risks for the members that chose to opt in.
It’s true the fiscal freedom is a plus (especially now), but it is difficult to estimate what the economic effects (not from a government expenditure point of view) would have been from being part of the Euro. One would expect some possible benefits. I think most economists here in Holland would say it has been beneficial for our ecnomy, but have trouble in saying axactly how much.
It’s very flattering to Britain that they can sabotage the Euro, being 1/8th the size of the euro zone.
The smaller and more open your economy, the more you have to gain from joining the Euro and the less you have to lose. A small, open economy has less independence in monetary policy anyway. If I recall correctly the Benelux countries were a catalyzing factor in the creation of the EU in the first place.
I am sure someone will fight my ignorance.
A working euro would be a good thing from our independent point of view. The trouble is it was a slow motion car-crash from the start. No sabotage needed.
The only way a euro could work would be with fully centralised fiscal policy, which of course is what the architects of the euro have always wanted. I suspect they took the step of creating the euro fully aware that it meant setting course for exactly that end point of a federal Europe. Sure enough, the response from many in Europe has been to suggest that the failing euro shows that more centralisation of power is required.
At a point in history when former conglomerate nations are devolving powers hand over fist, it seems like Europe is the only entity determined to go the other way. I think it is misguided and a return to a more common market approach is the way to go.
Unfortunately, that is not the desire of the unelected and unaccountable boys and girls in Brussels.
Unfortunately, “we told you so” is not an economic policy. As the Euro enters its death-spiral we cannot doubt that Britain will catch a cold from it, too.
Not really. Sort of, but not really. Smaller countries with open economies may have less effective control over their financies and currency, but they have all the same powers, if you understand me.
But you are right in that the smaller countries with open economies had relatively little to lose - at first. The other problem was that they also had little to gain, but it didn’t look that way at first. It let Greece borrow against Germany’s credit rating, goes the pithy but more-or-less accurate saying. Down at the bottom of it, Greeks evidently don’t want to act like germans, and vice versa. There’s no easy way to deal with this and no easy way of fixing the problems it causes.
We were part of the team. Despite not being in the Eurozone we helped bail Ireland and Portugal out. Further, at one point, there was speculation that some bailout fund was going to be funded by EU money, along with Norwegian Oil Fund money. Indeed, the first Eurozone bailout mechanism (EFSM, I think) was backed by £60 billion of EU money.
Besides, the whole Cameron-Sarkozy brouhaha is so obviously scripted it’s unreal. Sarkozy, facing an election, screams at the British Prime Minister. Cameron, facing the biggest rebellion in years from his own party over the EU, gets under the skin of the French President. How convenient for both of them.
I’m not saying they sabotaged it. Not that I’m aware of, anyway, but I’m not aware of very much so that’s not exactly saying much either. No, what I mean is that maybe if Britain had gone with it 10-15 years ago, supported it and been part of the process of shaping what the Euro was, is and is meant to be, if they’d put their money where their mouth is so to speak, things might have been different all around.
All I’m saying is that the guy who only comes to the meetings to say “your project is retarded, and you’re doing it all wrong anyway” is never going to win any awards for Best Received Constructive Criticism of the Year, is all.
I wasn’t aware of that. As I said, I ain’t much aware of much.
But again, I’m talking more about a general frame of mind than the current sitch per se. Not that I really blame Britain - the European idea has been plagued by fevered egos all around from the get go, hasn’t it ? Still, call me naive, but I still figure if we’d all forgot about our own petty interests for a bit and all tried to make this thing work it…would… still be akin to herding wet cats doused in Crisco, OK, point taken.
<Sarkozy><Smug>They see me trolling, they hating.</Sark></S>
The EU is not the Euro-zone. Denmark, as a small and open economy, has profited greatly by being outside the Euro. It has forced successive Danish governments to lead a fiscal policy that is more conservative than what could have been possible inside the Euro. Meaning Denmark is today one of the least indebted nations of the EU, and one of those weathering the crisis the best. Last I saw however, the UK had a deficit in the double digits. And a big trade deficit on top of that. Some time soon, when noise from southern Europe is dying down, the spotlight is going to come back on the UK. And then you’ll have to do something about those numbers fast, because you do not have the backing of a larger economy to back your currency and help depress interest rates.
Interest can’t get depressed much more - Bank of England base rate is at 0.5%. Did you mean inflation?
No, it wouldn’t have made any difference as the model was deeply flawed from the beginning. As soon as the acceptance criteria started being fiddled you could predict that problems were inevitable.
The EU has progressed too far and too fast and remains an undemocratic organisation , founded on a political ideology that no-one is allowed to challenge.
The federal vision is presented as a fait accompli when really it is perfectly possible to ditch that and yet still retain the benefits of closer co-operation between european nations.
No interest rates. Low now, but once the financial markets start to focus on how you’re running a deficit in excess of the Greek, they’re going to be leery of lending you money unless they see some serious moves to bring down the deficit. This will be exaggerated by the UK not being in the Euro. The margin for financial lavishness is smaller the smaller the economic zone you are member of.
Are we talking about cost of (government) lending? Ie bonds will have to offer better interest for people to buy them because of sterling uncertainty due to the crisis?
Before this gets very serious:
Anyway, carry on.