Gardian Posted November 6, 2011 Share Posted November 6, 2011 With all the incessant Greek business going on, Mrs G said to me today "Do you still hold the view you always had that the UK should have joined the Eurozone?"Well, I spluttered a bit and gave a sort-of politician's answer along the lines of "With the benefit of hindsight, etc, etc". However ......... should we have? My view always was that if we (the UK) were in Europe, then as one of the principal nations we needed to be in it properly. I always felt that for exporters (or for that matter importers), wildly variable exchange rates were bad news and made it extremely difficult to trade competitively. We were better in than out.OK, things are desperate at the moment but would the UK be any worse off within or outside as it currently is and probably (in truth) financing a lot of the European ills?From an entirely personal and selfish point-of-view, let's say the UK had entered in 1999. The £-€ rate was around 1.40, so let's say that the 'fix' on entry was 1.35 (that's a complete guess, but maybe not far wide of the mark). I reckon that our average 'received' rate over the last seven years has been 1.20-ish, representing an interbank rate of (say) 1.23. That average will decline.So, my question for the real Economists on here is "Should we have?" Link to comment Share on other sites More sharing options...
Mikep Posted November 7, 2011 Share Posted November 7, 2011 I can't understand the logic that says the Greeks would be forced out of the euro if they can't pay their bills. California and New York weren't forced out of the dollar, and you or I wouldn't be able to invent a new currency if we couldn't pay our mortgage. If they can't borrow euros, how are they expected to borrow drachmae?What they will have to do is pay a reasonable rate of interest, reflecting the risk of non-payment. If that means they can't borrow as much, then they might have to work 'til they're 60. Link to comment Share on other sites More sharing options...
parsnips Posted November 7, 2011 Share Posted November 7, 2011 Hi, By not being" in" , the UK has been able to quietly devalue by about 30% over the last 5 or so years; as we are constantly told the EU is the UKs biggest export market (app. 60%) . If we had been "in" we would not have had that 30% advantage over our EU commercial competition. The UK would probably be in deep recession , and quite likely in the same sort of austerity programme as greece and ireland, which, on a selfish level, could well have had serious effects on the level of our pensions. Link to comment Share on other sites More sharing options...
NormanH Posted November 7, 2011 Share Posted November 7, 2011 " which, on a selfish level, could well have had serious effects on the level of our pensions. "I have found that this devaluation has had a serious effect, given that I receive my occupational pension in Euros, but it is sourced in pounds.My fixed bills not counting inflation here are about 40% higher because of the rate of exchange. Link to comment Share on other sites More sharing options...
powerdesal Posted November 7, 2011 Share Posted November 7, 2011 ''....as we are constantly told the EU is the UKs biggest export market (app. 60%)''....As I understand it, that statement is not strictly true. I believe that any UK export that is routed through a mainland port ( ie Rotterdam) is classed as an export to the EU, irrespective of its final destination. I read somewhere (can't remember where ) that actual exports to an EU 'end user' are possibly as low as 10% of the total. No source though and prepared to be wrong. Link to comment Share on other sites More sharing options...
nomoss Posted November 7, 2011 Share Posted November 7, 2011 http://www.guardian.co.uk/news/datablog/2010/feb/24/uk-trade-exports-imports Link to comment Share on other sites More sharing options...
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