This House believes Britain should join the Euro currency

Joining the European single currency (the Euro) may appear unfavourable to Britain, but the negative effect of not joining would be more unfavourable. As explained by Anthony Browne in The Euro: Should Britain join?, "Euroland businesses are now…able to raise money for investment across the entire single currency zone, making it easier and cheaper. British companies, on the other hand, are still largely constrained to drumming up money from within Britain if they want to expand.”¹Eurozone businesses find it easy to raise money, for they are spared currency conversion charges. The carmaker Nissan has previously told the British government that eliminating exchange rate risk by siting production in the same currency zone as its sales market will be its preferred option’².

¹Browne, A., "The Euro: Should Britain Join?", Page 89

²Morgan, O. "Nissan tells Blair 'join Euro'", 27 May 2011, The Guardian

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Britain does not have to become a part of the Euro to benefit from the EU economically. Britain has already struck the right balance between EU involvement and managing her own economy. "We are already part of the single market, and getting rid of the barriers put up by having separate currencies will make little difference. It was the removal of all the other barriers– such as tariffs – that mattered far more. The economies of scale are already here – from the EU’s almost 300 million consumers – having an effect.”¹.Accepting the Euro could very well upset this balance with very negative effects; “Staying out, we have the advantage of a more flexible economy, more adaptable labour market, and lower taxes.” Therefore, it is more advantageous for Britain to keep the pound whilst maintaining EU membership.

¹Browne, A., 2001, "The Euro: Should Britain Join", Page 91

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London will further lose its position as Europe’s financial centre, and the financial influence this brings with it. Britain’s staying out of the Euro has already depleted London’s status as the European financial centre. As explained by Anthony Browne in The Euro: Should Britain join?, “The European Central Bank – the second most powerful in the world – had a natural home in London, but ended up in Frankfurt because of our indecision over the Euro.”¹ Germany used this to her advantage, for it “reinvigorated Germany’s bid to ensure that Frankfurt becomes Europe’s financial centre, with a massive office-building programme to rival London’s Docklands.”¹Germany seizing London’s sphere of influence will only increase if Britain stays out of the Euro. Moreover, if Britain’s indecision over the Euro continues, “it would lead to a serious rethink by foreign owners of many of the City’s financial institutions about where their core activities should be located.”¹ If Britain does not join the Euro, her economic activity both at home and between fellow Member States will be badly affected.   

¹Browne, A., 2001, "The Euro: Should Britain Join?", page 92

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This has simply not been the case; since the launch of the Euro in 2002, London has consolidated her position as the financial centre of Europe. There is no need for Britain to join the Euro, she can profit from the financial influence London exercises while her mainland European counterparts use the single currency. As explained by Anthony Browne in The Euro: Should Britain join?, “at the launch of the Euro…that what were effectively regional financial centres –such as Paris- lost any reason for their existence and saw all European business drain away to Europe’s real financial centre, London.”¹ Moreover, Britain is not wholly reliant on her European counterparts for business; “More people work in financial services in London than live in Frankfurt, its only likely rival. We have the English language and a time zone that means we can deal with New York and Tokyo in the working day.”¹ If the British economy does not even need mainland Europe for business, even less it needs the single currency.

¹Browne, A., 2001, "The Euro: Should Britain Join". page 93

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There will be initial conversion costs and inflation, but this will be short lived. If Britain accepts the Euro, “There will be far more powerful forces – price transparency and economies of scale in a massive single market – that will continuously push the price of British goods down to European levels [resulting in] massive savings.”¹. The end of cheaper goods justifies the means of attaining them.

¹Browne, A., 2001, "The Euro: Should Britain Join", Page 91

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No; cheaper goods come at a high monetary price and a high price of a chaotic turnaround.
Even before the Euro has taken effect, it is going to be costly; "Converting to the Euro will also cost businesses, and shops in particular, billions of pounds, and that is bound to be passed on to their customers."¹ Once it fully takes effect, "The Euro will also lead to higher inflation and more red tape, encumbering businesses and their customers with even higher costs". ¹ And so the initial monetary costs and inconvenience are not going to be short lived, but will in fact spread. Any silver lining of cheaper goods prices eventually is not going to be worth the upheaval of complications and inflation its creation entails.
¹ The Euro: Should Britain join?, Anthony Browne, p. 102

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Before the arrival of the single currency, holiday makers would spend much money on preparing for the trip, before they had even bought a single souvenir or postcard; “travellers touring this fragmented continent could spend large amounts of their money simply changing it from one currency to another.”¹ The loss incurred by currency conversion would be eliminated and accommodation abroad will also be cheaper and easier to book; “Joining the Euro will also make it cheaper to send money around Europe. Sending money to book a holiday cottage in another country with another currency can cost £40. Within Euroland, it would cost less than one Euro - much less than one pound.”²

¹Browne, A., 2001, "The Euro: Should Britain Join". page 102

²Browne, A., 2001, "The Euro: Should Britain Join". page 103

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This theory does not transfer to practice successfully. Questions of lifestyle (such as holidays) under the Euro cannot be treated in isolation. Converting to the Euro will have a series of knock –on effects which are all interconnected, affecting and effected by one another. One of these is the inevitability of higher inflation. With increased inflation, there will be increased unemployment; There will be even more British jobless who cannot afford to go on holiday.  Moreover, as explained by Anthony Browne in The Euro: Should Britain join?, “These savings are a mere fraction of the total cost of going on holiday.”¹

¹Browne, A., 2001, "The Euro: Should Britain Join?", page 103

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Joining the European single currency (the Euro) may appear unfavourable to Britain, but the negative effect of not joining would be more unfavourable. As explained by Anthony Browne in The Euro: Should Britain join?, "Euroland businesses are now…able to raise money for investment across the entire single currency zone, making it easier and cheaper. British companies, on the other hand, are still largely constrained to drumming up money from within Britain if they want to expand.”¹Eurozone businesses find it easy to raise money, for they are spared currency conversion charges. The carmaker Nissan has previously told the British government that eliminating exchange rate risk by siting production in the same currency zone as its sales market will be its preferred option’².

¹Browne, A., "The Euro: Should Britain Join?", Page 89

²Morgan, O. "Nissan tells Blair 'join Euro'", 27 May 2011, The Guardian

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Britain does not have to become a part of the Euro to benefit from the EU economically. Britain has already struck the right balance between EU involvement and managing her own economy. "We are already part of the single market, and getting rid of the barriers put up by having separate currencies will make little difference. It was the removal of all the other barriers– such as tariffs – that mattered far more. The economies of scale are already here – from the EU’s almost 300 million consumers – having an effect.”¹.Accepting the Euro could very well upset this balance with very negative effects; “Staying out, we have the advantage of a more flexible economy, more adaptable labour market, and lower taxes.” Therefore, it is more advantageous for Britain to keep the pound whilst maintaining EU membership.

¹Browne, A., 2001, "The Euro: Should Britain Join", Page 91

improve this

London will further lose its position as Europe’s financial centre, and the financial influence this brings with it. Britain’s staying out of the Euro has already depleted London’s status as the European financial centre. As explained by Anthony Browne in The Euro: Should Britain join?, “The European Central Bank – the second most powerful in the world – had a natural home in London, but ended up in Frankfurt because of our indecision over the Euro.”¹ Germany used this to her advantage, for it “reinvigorated Germany’s bid to ensure that Frankfurt becomes Europe’s financial centre, with a massive office-building programme to rival London’s Docklands.”¹Germany seizing London’s sphere of influence will only increase if Britain stays out of the Euro. Moreover, if Britain’s indecision over the Euro continues, “it would lead to a serious rethink by foreign owners of many of the City’s financial institutions about where their core activities should be located.”¹ If Britain does not join the Euro, her economic activity both at home and between fellow Member States will be badly affected.   

¹Browne, A., 2001, "The Euro: Should Britain Join?", page 92

improve this

This has simply not been the case; since the launch of the Euro in 2002, London has consolidated her position as the financial centre of Europe. There is no need for Britain to join the Euro, she can profit from the financial influence London exercises while her mainland European counterparts use the single currency. As explained by Anthony Browne in The Euro: Should Britain join?, “at the launch of the Euro…that what were effectively regional financial centres –such as Paris- lost any reason for their existence and saw all European business drain away to Europe’s real financial centre, London.”¹ Moreover, Britain is not wholly reliant on her European counterparts for business; “More people work in financial services in London than live in Frankfurt, its only likely rival. We have the English language and a time zone that means we can deal with New York and Tokyo in the working day.”¹ If the British economy does not even need mainland Europe for business, even less it needs the single currency.

¹Browne, A., 2001, "The Euro: Should Britain Join". page 93

improve this

There will be initial conversion costs and inflation, but this will be short lived. If Britain accepts the Euro, “There will be far more powerful forces – price transparency and economies of scale in a massive single market – that will continuously push the price of British goods down to European levels [resulting in] massive savings.”¹. The end of cheaper goods justifies the means of attaining them.

¹Browne, A., 2001, "The Euro: Should Britain Join", Page 91

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No; cheaper goods come at a high monetary price and a high price of a chaotic turnaround.
Even before the Euro has taken effect, it is going to be costly; "Converting to the Euro will also cost businesses, and shops in particular, billions of pounds, and that is bound to be passed on to their customers."¹ Once it fully takes effect, "The Euro will also lead to higher inflation and more red tape, encumbering businesses and their customers with even higher costs". ¹ And so the initial monetary costs and inconvenience are not going to be short lived, but will in fact spread. Any silver lining of cheaper goods prices eventually is not going to be worth the upheaval of complications and inflation its creation entails.
¹ The Euro: Should Britain join?, Anthony Browne, p. 102

improve this

Before the arrival of the single currency, holiday makers would spend much money on preparing for the trip, before they had even bought a single souvenir or postcard; “travellers touring this fragmented continent could spend large amounts of their money simply changing it from one currency to another.”¹ The loss incurred by currency conversion would be eliminated and accommodation abroad will also be cheaper and easier to book; “Joining the Euro will also make it cheaper to send money around Europe. Sending money to book a holiday cottage in another country with another currency can cost £40. Within Euroland, it would cost less than one Euro - much less than one pound.”²

¹Browne, A., 2001, "The Euro: Should Britain Join". page 102

²Browne, A., 2001, "The Euro: Should Britain Join". page 103

improve this

This theory does not transfer to practice successfully. Questions of lifestyle (such as holidays) under the Euro cannot be treated in isolation. Converting to the Euro will have a series of knock –on effects which are all interconnected, affecting and effected by one another. One of these is the inevitability of higher inflation. With increased inflation, there will be increased unemployment; There will be even more British jobless who cannot afford to go on holiday.  Moreover, as explained by Anthony Browne in The Euro: Should Britain join?, “These savings are a mere fraction of the total cost of going on holiday.”¹

¹Browne, A., 2001, "The Euro: Should Britain Join?", page 103

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The EU creates economic conditions that threaten jobs. As explained by Anthony Browne in The Euro: Should Britain join?, "Joining the Euro would damage the British economy with 'one size fits all' interest rates, and so destroy jobs."¹ This is not merely a product of anti-EU propaganda created by the British tabloid press; The evidence speaks for itself; "In 2000, (Euro was launched 1st January, 1999) unemployment in Euroland averaged about 10 per cent, compared to under 6 per cent in the UK" Britain must also learn from the mistakes of history; "Past experience has already shown us that locking ourselves into inappropriate interest rates destroys jobs. After we joined the Exchange Rate Mechanism, 100,000 businesses went bankrupt and unemployment doubled before we were finally forced out in 1992." Repetition of this is to be avoided at all costs and by Britain staying out of the Euro.

¹Browne, A., 2001, "The Euro: Should Britain Join?"

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No; Unemployment will rise if Britain stays out of the single currency.
Britain's indecision over joining the single currency has already discouraged foreign investors from doing business with her, and this will only worsen if she stays out, thus reducing the number of jobs there. Britain has to be in the single currency to retain a presence in the European business scene if she is to prosper and make any profit at all. As explained by Anthony Browne in The Euro: Should Britain join?; "Without access to the single currency zone, foreign investors who are here will move out, closing factories and businesses; new ones will set up in Euroland in preference to the UK." London's position as the European financial centre has already been depleted by Frankfurt and this situation will only deteriorate if Britain stays out of the Euro. The pound is no longer a source of hope for Britain.
¹ Anthony Browne, The Euro: Should Britain join? Page 52

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If she accepted the Euro as her currency, Britain would have to hand the control she has over her economy over to Brussels. EU Committees would dictate how she may spend and tax. It is too dangerous for any country to have her economic affairs dictated by another country. This is an issue even Europhiles (those who support the EU) are sceptical about. "Joining the euro would involve a major surrendering of our sovereignty, severely hindering our ability to run the economy as we see fit. We would lose control over interest rates, and the ability to manage the economy through taxing and spending. Instead, it would be run by European committees… Even British politician Kenneth Clarke, nicknamed “Europe’s biggest friend” and one of the leading campaigners for the euro, admits that Britain’s ability to tax is central to its democracy.”¹

¹Browne, A., 2001, "The Euro: Should Britain Join?", page 70

These restraints exist to ensure that all countries contribute to the European Community. Surprisingly, Britain's sovereignty will actually increase by joining the Euro. As explained by Anthony Browne in The Euro: Should Britain join?, "When it comes to interest rates, we would in some ways get more sovereignty. Being represented in the ECB (European Central Bank) would give us more influence over the business cycle, because we would be there as part of the decision-making process, not just having to accept decisions made by others that would have a profound effect on us."¹ Joining the single currency and by attachment the ECB would help Britain to better oversee and predetermine her economic activity, thereby improving the handle she has on her finances.

¹Browne, A., 2001, "The Euro: Should Britain Join?"

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This must not be dismissed as petty nostalgia, desire for outdated British tradition and fear of change. The fact that Britain does not want to lose the national symbol of her Queen on the banknotes is surely a sign that the British want to hold on to their own identity and keep control of their own economy. As explained by Alan Clark, "The European Commission Press Office chose that moment to release facsimiles of the new euro banknotes in their various denominations. The unfamiliar, but so obviously foreign, appearance made many people uneasy. Polls showed that the electorate, for most of the time indifferent to European squabbling, whose technicalities they could not be bothered to master, disliked the removal of their Sovereign's head from the currency of the realm. The sceptics took fresh heart and the likelihood of the dispute fading …became still more remote.”¹ This highlights the depth and strength of anti-Euro sentiment in the British psyche. It is surely unfair for both Britain and those fellow EU Member states that ARE under the Euro to enter the single currency while not entirely convinced by it.

¹Alan Clarke, The Tories: Conservatives and the Nation State 1922-1997, page 435-6.

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The Queen's head on British money will not be entirely lost.
This nostalgia is simply ridiculous; the head of Queen Elizabeth II has only appeared on English banknotes "since 1960, having been made impossible by the nationalisation of the Bank of England in 1946."¹ (Moreover, Scotland and Northern Ireland have never had the reigning monarch's head on their banknotes; and so no change will incur. The Queen's head will be lost from banknotes but "By contrast, we have had the monarch's head on our coins since the Middle Ages, and that will continue. Countries in Euroland can put a symbol- such as their monarch- on one side of each coin."¹ The attitude expressed alongside is irrational fear of change.
¹ Anthony Browne, The Euro: Should Britain join? Page 83.

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