The UK and the Euro

Discussion in 'Politics, Religion, Social Issues' started by cslewis, Feb 3, 2006.

  1. cslewis macrumors 6502a

    cslewis

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    #1
    I was curious how the UK members of MacRumors felt about the Pound/Euro debate. What are your personal opinions regarding the UK adopting the Euro? I've heard arguments that unless the UK fully joins the EU (which of course means abandoning the Pound) you'll be annexed as the 51st, 52nd, 53rd, and 54th US states. :rolleyes: On the other hand, many people want to maintain the status quo and stay with the pound. It doesnt look like it's a super-important issue right now, but it's bound to become one as Europe ramps up pressure on the UK to decide what their position will be. So, what do you guys think?
     
  2. Chundles macrumors G4

    Chundles

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    #2
    Actually, they'd have to be the 52nd, 53rd, 54th and 55th states. We're already the 51st.

    I say stick with the pound!! Fight the power and keep the pound, I don't want to look at a trip to England as being almost affordable at €0.65 to the Aussie dollar, I want to see it as something massively expensive at £0.40 to the Aussie dollar.

    I know it will still cost the same, I know how the move would work, I'm just being facetious.

    And if they did go to the Euro, the Barmy Army would lose their famous "We get three dollars to the pound" cheer that has been echoing across Australian cricket grounds since time immemorial.
     
  3. Nickygoat macrumors 6502a

    Nickygoat

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    #3
    I'm not sure that the Eurozone countries will ramp up the pressure on us to join. It's pretty much accepted that the UK will not join, at least not any time soon. Our beloved leader, Tony, wanted to join, to secure his legacy, but our next beloved leader, Gordon, isn't so keen. And he's the one who is the real power in Downing St. If he doesn't want it it won't happen.
    This isn't really an issue at the moment - we had huge debates about it (although not in Parliament, nor an honest and open debate - is that possible in politics?) and no-one seems that bothered. Don't forget we are not the only country to be asked and to refuse. Denmark opted out too, which was a much harder decision for them than for us. If the Danes ever go in (unlikely, but might happen - their government keeps asking them), then yes, there will be a lot more pressure.
    Most Brits are sceptical about it. I can see the advantage for businesses in only having one currency, but my personal opinion is that it is doomed to failure. Trying to fit too many different currencies into one was always going to be a hard task, and having a common interest rate is proving difficult. Ireland is booming because interest rates are too low for them, while Germany is having difficulties because they're too high.
    And for the last few years the UK economy has been doing well. Of course this is built on an ever expanding credit limit, and a huge influx of government spending, neither of which will last. The general consensus at the moment is "We're fine, the Eurozone is struggling a bit - why should we join?"
    Look for that to change when the UK economy goes down the pan.
     
  4. miloblithe macrumors 68020

    miloblithe

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    #4
    Eventually, the UK will join. The only reason not to is popular opinion. All the economic/political reasons are more or less settled. So once popular opinion shifts enough towards adopting the Euro, expect the issue to reemerge and the UK to join.

    How could popular opinion shift? When the UK realizes it's better to be a big fish in Europe than to be the little snot-nosed kid who hangs out with the US all the time, which could happen, perhaps, when British people get fed up about the US assigning them to fight unpopular wars.
     
  5. Nickygoat macrumors 6502a

    Nickygoat

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    #5
    We're unlikely to ever be a bigger fish in Europe than we are now. The EU is dominated by the French and Germans, although this grip is loosening with it's expansion. Joining the currency wouldn't change that.
    Most Brits can't see the advantage of joining, and most don't care.
    Apathetic as ever :D
     
  6. Ugg macrumors 68000

    Ugg

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    #6
    The same is true here in the US, as some states have booming economies and need higher rates while others need lower rates, the argument doesn't really wash. Italy is really suffering, not so much from the Euro but its continued poor monetary policies. It would have suffered even had it not joined the eurozone. I don't think it's been any rockier of a road than anyone really expected.
     
  7. mactastic macrumors 68040

    mactastic

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    #7
    Maybe if Iran ever gets their Euro-based oil bourse started the UK will decide there's a compelling interest... :p
     
  8. Nickygoat macrumors 6502a

    Nickygoat

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    #8
    Oh, I'm not disagreeing. The difference is that it's easier for US citizens to move to a more economically advantageous State, to take advantage of a booming economy.
    Simply, it's easier for a US citizen to move from depressed Wyoming to booming Nevada (I have no idea if they are but you get the idea), than it is for an Italian to move to Ireland.
    First off, there are language barriers, then there are a variety of "tests" to go through to gain entry.
    This is one of the great advantages of the US economy - you have a standard language and a standard set of rules to relocating somewhere. This doesn't apply in the EU.
    Whether anyone in the US wants to move to take advantage of this is a moot point, but the ability is there.
    I'm not knocking it - in fact I am hugely in favour, and take advantage of it, but you have to realise that there are more fundamental difficulties in creating a "United States of Europe"(the supposed end goal of the EU) than there are in the US.
     
  9. Nickygoat macrumors 6502a

    Nickygoat

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    #9
    You might be right - except that we are running out of our own oil, and have now become a net importer. We'll pay anybody in whatever currency they choose :D.
     
  10. Ugg macrumors 68000

    Ugg

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    #10

    Actually Wyoming's economy is booming due to its oil and gas reserves.

    I do understand your point but things are changing rapidly and borders mean a lot less now than they did 10 years ago. It's especially noticeable in the German speaking countries and of course the ten newest EU members.

    The Guardian had a good article awhile back about German doctors flying to the UK for the weekend to work. German doctors are the lowest paid and UK doctors have gotten a reprieve from 80 hour work weeks. The coast of Spain in some areas is little more than another British county. I've heard many Brits are moving because the UK is too expensive. Maybe these are exceptions but even 15 years ago they would have been unthinkable.

    I haven't heard about the tests you talk about. What are they exactly?
     
  11. mdavey macrumors 6502a

    mdavey

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    #11
    Edit: Ah, misunderstood Ugg's response to Nickygoat's post and answered a different question ;) Here is the answer to the question "What are the five tests that the UK Govenment defined for adoption of the Euro?"

    The original five tests were:

    1. Will adopting the Euro be good for jobs?
    2. Will adopting the Euro have a positive impact on investment?
    3. Are the City of London financial institutions ready?
    4. Are the Euro economies flexible enough to handle a single currency?
    5. Are the Euro economies performing closely enough to cope with a common interest rate?

    On 26th June 2002, Gordon Brown (the UK Finance Minister) added three additional tests:
    6. What will be the impact on the UK housing market?
    7. Is the exchange rate favourable?
    8. Will the other Euro countries would stick to the economic rules for the single currency?


    Personally, I am in favour of a single currency, but I think that Europe should be working harder to standardise taxes and laws across the community. I'd also like to see the Asia-Pacific region (including Australia and New Zealand) trying to achieve something similar to the EC/EU/Euro scheme for their own region.

    It is pretty clear to me that most businesses and some individuals now treat the entire world as their economic base (certainly the Internet has had a significant part to play here). Countries, governments and legal and economic frameworks need to catch up with how organizations conduct their business and individuals live their lives.
     
  12. Nickygoat macrumors 6502a

    Nickygoat

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    #12
     
  13. Ugg macrumors 68000

    Ugg

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    #13
    Freedom of movement would necessarily, IMO, bring about a need for a common currency. Although, I suppose if just a few states aren't participating in the Euro, perhaps it's not that big of a problem. The big problem of course is if there is a sudden and large fluctuation on the currency markets. I don't know how likely this is given the UK is so closely tied to the continent.

    Sure, there are difficulties in moving from one country to another but the barriers are only decreasing, not increasing and I would think it's a trend that can only continue. As far as language goes, try living in Miami without speaking Spanish. You'll find it's almost impossible:D

    When I think of the diversity of the EU, it's almost impossible to imagine that so many barriers have been reduced over the last 15 or so years. Sure, there's a lot yet to be done but the Euro is here to stay and will only unite the continent further. Fine tuning the laws and regulations is going to take some time but the anti-immigration wave that's sweeping the EU means that the EU will have to rely on its own members to provide the labor. I see that as an integral step in the creation of the US of Europe.
     
  14. Nickygoat macrumors 6502a

    Nickygoat

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    #14
    Interesting point Ugg & I agree with you on many points, if not all.
    I'll leave this discussion, for the moment, with the following anecdote;
    My sister, who lives in Spain, had some money transferred from a client in Italy. No problem, transfer went through easily, but the bank had a few conditions:
    Bank to bank transfer €18, Ok, a bit of gouging goes on by all banks.
    Currency handling €10. For an Italian Euro account to a Spanish Euro account? WTF?
    Most Eurozone customers are unhappy because all the retailers bumped the prices by 10% after the switch to the Euro
     
  15. Ugg macrumors 68000

    Ugg

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    #15
    There's no doubt that a lot of profit taking goes on by the banking industry and I would argue that it needs a lot of reform. Citibank has made great inroads into European banking mainly because they have drastically reduced their foreign currency transaction fees.

    There are growing pains of that there is no doubt but I think the worst is over and now it's just a matter of getting the little details right.
     
  16. takao macrumors 68040

    takao

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    #16
    well i guess it's the UK fear of loosing a little bit of control ;) ... most of the new member countries can't wait for the euro ... i think the difference of living on islands _is_ important ... short shopping afternoon in germany ? summer holidays in italy ? visiting friends of the family in eastern france ? having friends in south tyrol ? 4 day trip to Leipzig ?

    i'm happy i'll never have to deal with all those pesky currencies again ... can't wait for czech republic, slovenia or hungary etc. getting the euro
     
  17. cslewis thread starter macrumors 6502a

    cslewis

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    #17
    My family wants to hurry up and visit the relatives in the Czech Republic before the Euro takes hold... the last time we went, when the exchange rate was 1:40, it was wonderful.
     
  18. Nickygoat macrumors 6502a

    Nickygoat

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    #18
    You must know a different group of Poles to me. All the Poles I know don't particularly want it, they're complaining that it's raised all the prices but not their wages.
     
  19. Stella macrumors 604

    Stella

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    #19
    The UK is a pain in the arse with its relucantance to adopt the Euro.

    Last year I went to Spain, stopped off in the UK so I had to change currency twice. Some UK shops take Euros, but smaller ones won't.

    Once currency - better.

    There is nothing good about the Pound apart from people association with independence from Europe. Small minded british people.

    Additionally if the UK did change to Euro prices will become more transparent and it would be more difficult for companies to continue on with 'Rip off Britain'. Less excuses.
     
  20. skunk macrumors G4

    skunk

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    #20
    Wow, you've got a real downer on Britain, haven't you? I think we need a better reason to join the Euro than to make your currency changing less tricky. There's not much to be said for it at present: the Eurozone countries aren't doing well, unemployment is higher, and they can't adjust their policy to rectify it.

    The exact opposite happened in the Eurozone: prices went up by an average of 10%.
     
  21. Ugg macrumors 68000

    Ugg

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    #21
    The increase in prices was pure profit taking on the part of businesses. It was a one off situation. It'll be another 10-20 years before the differences between Euro economies are smoothed out but it's a process that everyone needs to take a part in for it to work.

    Now that the UK is beginning to need to import oil, adoption of the Euro will be even more important. I truly believe that the major reason the UK and Norway didn't join is due to the dollar pricing of oil in world markets. Norway has received a boost from high oil prices but they are pumping less and less every year. It won't be but 5-10 years before they are forced to join. I'm sure the UK will be forced to do so also simply out of economics. Should Iran's oil bourse become successful, then it'll make even more sense for the UK.
     
  22. Stella macrumors 604

    Stella

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    #22
    Yep :)

    Your of course right, easier currency exchange isn't a good reason ( for tourists anyway ) to do so.

    When mainland Europe gets its economies back in shape, they'll begin to see the benefits of the single currency, especially for businesses trading between different Euro zone countries.

    Isn't the main reason prices went up due to price goughing? (spelling) Something that can be prevented ( helped, anyway ).

     
  23. skunk macrumors G4

    skunk

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    #23
    It may have escaped your notice, but Norway is not even a member of the EU, let alone the Euro.
     
  24. miloblithe macrumors 68020

    miloblithe

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    #24
    But the point about oil makes a lot of sense in terms of the UK.

    Norway was more concerned about fishing weren't they?
     
  25. Ugg macrumors 68000

    Ugg

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    #25
    Oops, I didn't make that clear. What I meant was that Norway will be forced to join the EU as well as the Eurozone. Their oil reserves insulate them from reality but that will change before much longer.

    Life in Norway is impacted as much as if it were already an EU member. Their independence is more a state of mind than reality.
     

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