euro

[Hazir]

The man who and I still have a debate pending on the euro. We started it in the WoT bookforum, but given its political nature I thought we should have it here. In order for that to be possible I already created this thread.

I won't say too much at this very moment about the euro, but I think it's a good thing for europe and I think the countries that stay outside of the EMU are doing themselves more harm than good.

If others than TMW and I feel like they want to say something about the topic, feel free. Questions are possible too of course :) I'll try to answer them.

[Nevman]

So has the Netherlands joined the Euro? When are they planning to get rid of their own currancy?

Being British, I have yet to see the benifits of joining the Euro. It is extremely weak and we will lose all control over our own interest rates etc. (but then being only 17, I don't have that much of an idea of the implications other than what has been said in the news which is generally against it.) So can you give me any less biased info?

[Hazir]

I am affraid there is no such thing as unbiassed information when it comes to something as far reaching as a new currency for Europe. Still I'll try to do my best.

As of january 1999 the currencies of Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxemburg, The Netherlands, Spain, Portugal have been abolished. All these countries adopted the euro as their new currency. July 2000 Greece joined these countries in the EMU and by doing so abolished its currency as well and replaced it with the euro. So at the moment the euro is the currency of 12 european countries. Denmark has voted against joining now, in the UK and Sweden the question is still pending.

The operation was mostly one on paper, in practise it means that there are no more fluctuations between the currencies of the countries named. If a Guilder was DM 0.89 on january 1st 1999 you can be certain it still is the same today, and tomorrow for that matter. Both currencies also have a fixed rate towards the euro. This has a huge effect on the financial markets, where there were 11 sub-markets before now the money circulates in one bigger market. If you borrow money in Greece you borrow euros, if you borrow money in Germany you also borrow euros. For big companies that's important, because they can borrow where the money is cheapest without having to worry about the risk of the currency of that particular market going up or down. In the long run this effect may trickly down to individuals like people who want a mortgage.

A problem with the introduction of the euro was that the governments of the countries that have the euro as their currency took ample time to introduce bills and coins for the new currency. In the meanwhile they chose to keep the old coins and bills as legal tender in their original countries. Which means for example, if I go to a shop today, prices are still in Guilders (with an indication of the price in euro), and I will pay with Guilders. On face value nothing changed you'd say. Legally speaking though a lot has changed. Because when I hand over my money, let's say fl 10 what I am really doing is handing over a bill with the value of ? 4.51.

On january 1st next year that will change, the national banks will issue bills and coins for the euro and will take in and destruct all the old bills and coins. From that moment on the confusing 'double' period with dead currencies will be gone in a matter of weeks. The bills are the same in every country with fairly bland non-controversial designs. The coins have a european side with the value on it, and a national side with room for the country that issued the coin to put a national symbol on it. Sort of like the Welsh and Scottish pound coins.

All coins and bills can be used anywhere inside the eurozone, prices in this entire area can be compared very easily because they are all in the same currency. It is very likely they will be accepted in most of europe, also in countries that are not part of the eurozone. I know for a fact the bigger department stores in London will accept euros, in most countries of eastern europe and south of the Mediterrenean the euro probably will be accepted just as readily as the local currency or the US dollar.

So there you have two clear advantages : cheaper to borrow money and your money is valid in more countries without the hassle of having to change.

On the 'downside' the euro has lost a lot of its external value. At the beginning it stood at $ 1.17, today it stands at $ 0.90, which is a considerable drop. And very annoying if you want to travel to the US or a country that has pegged its currency to the dollar. You simply can buy less for your money. On the other hand, this effect has no importance on the internal market because it has become so much bigger. Just try any American friend you have, ask them if they are worried about the value of the dollar. To them a dollar is a dollar is a dollar. When it goes up it doesn't affect their daily life, when it goes down it doesn't affect their life much either. The same is true for the euro it's internal market is much bigger than the trade with the rest of the world so you don't have to worry as long as you stay inside europe. So this focus on the value of the euro is a bit ridiculous, the euro is not a small currency like the old currencies it replaces, it's a worldplayer if you want to compare it you have to compare it to the dollar, not to the deutschmark or sterling.

About interest policies, that's a much more difficult topic. Because it is also about the role you want a central bank to play. In the US the Fed is used to playing a fairly active role in managing the economy. It raises interest if the economy is overheating, it lowers rates when the economy is slowing down. The effect they want to get is steady sustainable growth. In the eurozone the ECB has the role of guarding the INTERNAL value of the currency. Which means the ECB has the duty to keep down inflation. If inflation goes up the interestrates will go up, if inflation goes down the interestrates go down. Again the aim is sustainable growth. Two policies with the same aim but different means.

The Bank of England doesn't have a long tradition as an independent central bank, but it tends to lean towards the approach of the Fed. Which can be defended (but for the fact that it makes it also possible the bank falls back into the habit of having politicians dictate policies) since the Bank of England in this way could react to the needs of the UK in its policies. BUT, the UK is a member of the EU, and trades a lot with the other EU members, most of whom have the euro as their currency. So it would hurt the UK's economy if it would step too far out of line with the policies of the ECB. So in a way you could say the BoE is caught between a rock and a hard place. People calling for 'american style' policies and the permanent threath of severe damage to the economy if they act too independent.

The Netherlands has 'experimented' once with its sovereignty when it still had a central bank of its own. We paid for that with higher interest rates for a period of 15 years before the trust of the financial markets was restored. From that moment on the Dutch central bank didn't do anything more than follow the Bundesbank (which was pretty much what all central banks did). I once heard a quote from a member of the board of directors of the BoE which was something like, 'the independence of the BoE consists of 20 seconds decissiontime'. At the time they were talking about the Bundesbank, just imagine how independent the BoE is with the ECB controling rates in the eurozone.

So in my eyes people who claim they want to remain sovereign are shortsighted. Yes there is a possibility to have your own policies, but if you step out of line you get bashed back into line by the financial markets. The way most eurozone countries would see this debate is that they lost their empty sovereignty but they regained real control over the rates with their voice being heared in the board of the ECB.

Well this is a long post, I think I have answered your questions, I'm curious as towards your reaction.

[Nevman]

*Nevman blinks repeatedly as he tries to absorb all this information*

As far as I know, if it was put to the vote of the people I think it would be turned down. But then I doubt many of them actually know of anything more than the hyped up disadvantages cited by the media and opposing politicians. The current government hasn't been that effective in showing us any benifits. All they have really sad is that they want to join the Euro, so if we keep the Labour party in power thats what will probably happen. The Conservatives probably also want to join the Euro, but say they won't (won't immediately is probably what they mean).

So everything still costs the same? I can see the benifits of having only one currancy in terms of ease of 'buying things' (lol, what a way with words I have!). But the media has been very persuasive with their view, whether it is to sell more or the actuall views of the people in charge though I don't know.

Thanks though for the information, I'll probably have to act one way or another on it soon enough as 18 = voting age :/ (Now where is the 'Raving Loony Party' when you want it?! ;) ).

[Hazir]

Actually the conservatives were the ones that moved sterling into the forerunner of the EMU. Also, the baroness Thatcher used to be a for a single currency. And even now they only say, they don't want to join too soon. If you listen carefully you hear them rant about the government giving up the pound, but you never hear the topdogs say they would never join. The leading conservatives are simply keeping all their options open. The Blair government seems to be in favour of joining but is affraid to admit that they are. Which is understandable in the present situation. The opponents of the EMU have a fieldday and the public is only fed negative news. It's a miracle there are still 30% of Brits in favour of the euro.

As for the relative spending power of your money; yes that is still the same. Your paycheck is divided by 2.20 in holland, but prices are divided by the same factor. Of course some enterprises would use the change-over to adjust their prices but most don't. The biggest reason to do that is to stay with 'psychologically correct pricing'. You know, when something costs not 1 pound but 99 pence. The difference is negligiable, but somehow people think it's significantly cheaper. So there is a risk in shopkeepers rounding off to keep nice looking prices. Then again, those shopkeepers run the risk that their shoppers are aware of that trick and they will loose business.

[Aan`allein]

One addition: the euro may have devaluated a lot, but that was more due to the 'strength' of the dollar (and perhaps a bit the unfamiliarity of financial markets with the euro) than any weakness of the euro. If there was no euro, guilders, marks and everything else would have devaluated by about the same amount.

Still sucks though; half the money I earn goes into buying books. Books that mostly come from the USA... Ah well, can't always have it as good as back when the dollar was worth f1,50 and I traveled to the USA to buy me this huuuuge stack of books. :)

[Hazir]

My bet is that those transatlantic shopping weekends will be back in 2 years at the most :)

I agree with you btw on the 'familiarity' thing. But the ECB and governments also have themselves to blame for that. 3 years in a sort of limbo with bills and coins. The should have realised the markets are just as much based on emotions as the nostalgia of the individual over his old money. With the difference that the negative emotions of the markets translates into real selling off.

And what do you think about the 'informal economy' I understand that in Holland alone they are missing about 12,000,000 notes of fl 1,000 from circulation. that's little over 5 billion people have to get rid off in a discrete way. At the moment the most discrete way is buying dollars. Just imagine what the numbers probably are on a european scale.

My bet is that the first bounceback is going to happen real soon after the introduction of bills and coins. Which btw also will have the advantage that you probably can used them in all countries around the eurozone, rather different than the guilder that most people didn't even know.

[Hazir]

One thing I just thought of, a disadvantage is that goods look cheaper. So you may be more inclined to buy them even though they actually cost the same.

[Parmenio]

Seems you guys are following the US.

We used to have a lot of different bank notes aroung the country untill the Fed was created in the early part of this century to combate the same problems you stated. But the whole six months on then passing the buck thing seems to democratic. I don't think that is the best way to run a corporation maybe if they had longer tenures. Maybe they should have a panel from all countries that runs it. But I dought you would trust it if one country had more influence than another. Fun sitsuation you guys have over their.

It seems that Euroland is learning from the US in a lot of things. They also want a constitution too from what I hear. Soon you'll be the United States of Europe. I dought it just a funny thought I had.

I don't claim to have much info on your internal problems though. I just happen to read some stuff on you guys from time to time.

[Hazir]

Originally posted by Parmenio
Seems you guys are following the US.

Yep, basically it's the same process as the forming of the USA, staunch confederalists having the upper hand right now. But with one currency it will become more and more federalist you can be certain of that.

... But the whole six months on then passing the buck thing seems to democratic. I don't think that is the best way to run a corporation maybe if they had longer tenures. Maybe they should have a panel from all countries that runs it. But I dought you would trust it if one country had more influence than another. Fun sitsuation you guys have over their.

I think you're mixing up the European Union (EU) and the European Monetary Union (EMU)

EU (15 countries) is governed by

European Council - council made up of the head of governments of the memberstates on a intergovernmental basis
this council has the power to make treaties etc. Every basic law of the EU has to be approved by them (and their national parliaments according to local custom). This is the body with a different presidency every 6 months. The presidency has to cooperate with both its predecessor and following presidency so that makes for bigger continuity.

The European Commission - executive on a European/federal basis. Within the limits set by the European Council they can issue directives that have force of law in all 15 states. The European council appoints the President of the Commission who then appoints the commissioners. Every country has a right to either one or two commissioners on the commission.

The European Parliament - legislative and consultative body. On the matter of legislation by the Council they can voice their opinion but the right to approve treaties remains with national parliaments. They are a full legislator though when it comes to the directives of the Commission. They also can dismiss a the Commission or a commissioner.

If you would like to compare it to the US system it works like this. The president and the House would be in control of the federal government. The Governors and State Legislatures would be in charge of the Constitution and the framework inside which the federal government would have to work.

It seems that Euroland is learning from the US in a lot of things. They also want a constitution too from what I hear. Soon you'll be the United States of Europe. I dought it just a funny thought I had.

Not a silly idea though, there already is a European Charter that at this moment isn't a real constitution/bill of rights because the Brits blocked that full status. They deemed it too federalist.

I don't claim to have much info on your internal problems though. I just happen to read some stuff on you guys from time to time.
Still you seem informed enough to have a clue about the nitty-gritty of the presidency of the Council

Then we have the EMU

The EMU is sort of an affiliate of the EU, and every member of it also is a member of the EU. The other way round that is not the case. Denmark doesn't want to join, Britain opted out for the time being, and Sweden is still considering the matter.
The EMU included the founding of an European Central Bank that was charged to execute the monetary policies as described in the EMU-treaty. Every country has a member on the board who have a tenure of 8 years (since the bank is starting up they will deviate from that untill the 8 year tenure doesn't mean any longer that all governors have to be replaced at the same moment). So in this second union there is no changing of the presidency every 6 months. The president of the bank is supposed to hold the position for 8 years. The ECB is not accountable to any other body as long as it executes its role as described in the treaty. Still the countries of the memberstates have formed an informal 'controling panel' of the ministers of finance of the member states. They have no real power over the bank though.

[Nevman]

It would seem that we're just difficult ;)

Thanks though for all the information!

[Hazir]

Originally posted by Nevman
It would seem that we're just difficult ;)

Thanks though for all the information!

True, but that's natural at this moment in the process, we still have to figure out what it is we want to be. A European nation or a Europe of nations. As things are I think the system is complicated but balanced.

PS. You are welcome.

[Parmenio]

How does the EMU elect it's president? I'm guessing that the legislators would do it.

I still for the EU don't like that 6 on then pass it by. How do you determine when a person is following the predecessors policies close enough. Or if you have to follow someone elses policies then it seems a meaningless task. If change is needed then how far is he allowed to devite? You don't have to answer all these questions, but it seems if the position had any real power it would be a little more secure. Seems very distrustful. Like the Articles of Confederation were over here.

[Hazir]

Originally posted by Parmenio
How does the EMU elect it's president? I'm guessing that the legislators would do it.

The EMU has no say in who gets on the board of directors or who is its president. All get appointed by the European Council (heads of state). The European Parliament can block appointments.

I still for the EU don't like that 6 on then pass it by. How do you determine when a person is following the predecessors policies close enough. Or if you have to follow someone elses policies then it seems a meaningless task. If change is needed then how far is he allowed to devite? You don't have to answer all these questions, but it seems if the position had any real power it would be a little more secure. Seems very distrustful. Like the Articles of Confederation were over here.
Seems like you get the picture quite good. It is similar to the early USA. The states are controling the moves of the Union in a very strict way. E.g. our 'president' is seen as something like a senior civil servant by the heads of governments of the state. As for the presidency of the Council (the rotating one). Whichever country has the presidency controls the agenda of the Council. But of course the other members of the council are still in charge of their own votes in the Council so they can block any move of the presidency they don't like. They don't just have one vote but a number of votes that is relative to the population of the state they are representing.

This system makes for a situation where you need to build majorities that don't shift around too often on certain subjects. And since every president of the Council wants to be able to point at successes they sort of stick with plans for which they know they have a majority. The 'triumvirate' idea has been designed to make handing over the presidency easier, there is no desire though to do away with it. As things are it's not really necessary either since the council isn't supposed to preoccupy itself with the day-to-day business of the Union. I mean it's not like you want to rewrite your constitution on a regular basis.

I personally think the biggest problem is not the balance of powers between the Union and the member states. The biggest problem in my eyes is that there are a lot of people who don't want to admit that there is such a thing as a federal structure at all. I know that sounds crazy after my descriptions so far, but particularly in the UK and Denmark, the EU is almost seen as a diabolical bureaucracy encroaching on the sovereignty of those states.

Which is sort of ridiculous because the framework in which the Union has to work is set by the member states. So whenever the Union is doing anything it's just following the orders of the member states. And very often those memberstates have to vote unanimously to order teh Union. So nobody has the excuse really that it is the 'bureaucrats' doing it.

PS. The entire aparatus of the Commission is smaller than that of the average midsize city.

[Parmenio]

Member states and all it seems even more familiar the more you speak of it.

The AoC had the same problem your discussing ( all the states were distrustful and it was more like thirteen indiividual countries than a union). It took James Madison and Alexander Hamilton, in particular, and a few other people to realize that the AoC weren't working well and try to work out the problems. They didn't even intend to write the constitution but when they were done that is what they did.

It took a lot of lobbying to get the legislatures to approve it. RI and SC were hold outs too, we had to make a stipulation that it would only take 9 states to ratify the constitution because we were afaid some would hold out indeffinatly. New York barely passed it and Virginia only said it would if we included a Bill of Rights. RI and SC in particular only adopted it after it was in effect for a few months. There were some riots too.

To this day we keep having states rights and federal rights battles. It will never go away. With all you people having been individual countries for so long it would be even tougher for you to succeed. You'll probubly stick to the AoC version I dought you would go any further.

Yeh and rewriting your constitution doesn't seem to work. Isn't that what Italy does every few. Theres your RI. Maybe the UK would be like a Virginia.

[Indie]

Some people here seem to think that weak currency = bad thing - however it isn't quite that simple.

If your currecy is weak compared to other countries, that makes your products seem cheaper to others and other countries' products seem more expensive to you. This leads to increase in exports and makes people buy domestic products because they are cheaper. If your currency is too strong, no-one will buy your products outside your country (or your currency area).

On the other hand, vital imports such as oil get more expensive with weak currency.




As for the EU and the EMU, I support them both. Not only because of the economy, but because of the stability they create in Europe. Europe has had the bad habit busting itself up in a major war every 50 years or so. Maybe this will help break the trend.

Well, thats my .02 €.

[A'Lez Gaidin]

Wake up call... take your euro, shine it up real nice... and shove it up your derrière

Originally posted by Hazir
I think it's a good thing for europe and I think the countries that stay outside of the EMU are doing themselves more harm than good.


Where exactly hav you been hiding for the last 8 or 9 years? Or in fact months?

England is not part of the euro currency, yet Ireland is: England set's it's own budget and our economy is booming... Ireland however must take orders from Brussels (as if thats where the centre of power should be), and so it's economy is begining to fail! You clearly speak from the point of view of a weaker country than I do! Yes, for the less economically strong, the euro is a great idea, for the stronger countries however it is a stupid idea and thus should be ignored!

Why should Britain join into a union whereby only they and 1 other country are supporting the remainder of the continent? England and Germany pay in... Everyone else takes out... seems really fair:rolleyes:.

Besides, I am BRITISH...not EUROPEAN!!!

Point to note, Hazir, Do not in any way shape or form be insulted by my post (not that you would, this is merely a precaution). This is simply my opinion and it is rather strong. I must admit I only read your first post and will rectify that shortly and probably post again, but your opening post nedded answering!:) Sorry:P

[A'Lez Gaidin]

Jesus Hazir, you've got some strange thoughts! I only got to your second thread and begain poking myself in the eye... Frustration is not the best emotion to post with but neither is ignorance.

. For big companies that's important, because they can borrow where the money is cheapest without having to worry about the risk of the currency of that particular market going up or down.

That makes no sense! Did you not understand how a single currency works? how can the euro be cheaper in Calpe than in Dublin... idiot. The money cannot be cheaper elsewhere, if it was we'd still have seperate currency! Short sighted??? I think not. We are simply looking to the future, why should two countries keep the coninent rich??? The Euro will collapse in 10 years or so, civil war will break out accross the continent and Britain should steer clear of it! At the end of the day Britain and Germany make the most money in Europe, Have the best militaries in Europe and the best Music!!! Nobody goes to Holland exept to get stoned. People go to Britain and Germany to make money and live well!!!

[Hazir]

A'Lez, I'm not impressed by the way you seem to have to debate this issue, I am even less impressed by your arguments. The only thing in which the UK is outdoing the EMU countries is the relative value of its currency to the euro.

Exactly the two countries you mention, Ireland and Holland have a problem with the risk of their economies overheating under the current low interest rates. Usually this is not a sign of a weak economy. At the same time Britain is facing desinvestment due to the fact that it's outside of the EMU. Last week I read in the Times the UK actually fell back compared to the rest of the EU over the last 10 years. You may want to read that newspaper more often and more closely, and guess what? They're anti-european so it won't hurt your feelings.

Some other little facts that you may need to know since you seem so over-opiniated and so under-informed.

1. You are a European, after the ratification of the treaty of Maastricht all citizens of member states became European Citizens in addition to the national citizenship.

2. The use of drugs in the UK is much higher <edit :)>. than in Holland, no need to come here and get stoned.

3. Europe is not run by Brussels, Europe is run by the governments of the nation states. Every politician who points his finger towards Brussels and puts the blame for anything there is a hypocrite.

4. At least 60% of the British trade is with the eurozone, so every decline in the value of the euro hurts you.

PS. The entire foot and mouth crisis we're facing at the moment is entirely caused by British politics, Brussels is left to clean up the mess.
a. Britain talked the other members into accepting this policy of non vaccination.
b. So Britain demands other countries to make their cattle vulnerable to F&M in order to export 'clean' meat, but then it doesn't control its own imports to keep the virus out.
c. Britain permitted the use of pigswill containing meat. Thus creating a bomb waiting to go off.
d. Britain lets the epidemic go totally out of control.
You must be real proud of the all-British mess that was created that way. If I'm not mistaken only half of the British lifestock will have to be culled according to the advisors of your government? Jolly good job my man.

[The Man Who...]

Took me long enough to find it I know..but I forgot about this here Commnunity Chat thing....

Anyway,this will probably be a little out of step with the rest of this thread but it encompasses the points I wanted to make when we started this last week...

For the United Kingdom joining the EMU would serve no purpose,and would probably be largely damaging in the long term. Why? There are a myriad of resaons I try and deal with a few briefly here. Firstly our Economy is more in step with the US than with the EU,ecpecially in regard to interest and exchange rates.Combine this with the fact that more than 80% of our exports (Exports to Europe accounted for £151 billion in '99 out of a GDP of £802billion) are to countries out side of Europe and who's economies are also pegged against either the American or Asian economies and its not hard to see why this would make it unviable for us to join the EMU,especially when you consider the Euro's current low standing against the dollar (88.7 cents as of the 23/3/01).And besides the 'One interest rate for all' policy of the EMU is nearly always unfavourable for us.Our economic divergence with Europe means that when other European countries need a low interest rate,we need a higher one,and vice verca.This also means that external economic problems can effect Britain in a different way to other EU countries,and therefore require a different interest rate response. Estimates by the Bank of England suggest that a combination of those above factors and the other losses of control over monetary control could reduce our national output by as much £9billion,which can in no way be regarded as beneficial.

Another reason other countries have been keen to join the Euro was its supposed ability to make it easier and cheaper to take or borrow money abroad. Unfortunately this simply has'nt happened.Far from it in fact as at the moment we still have unacceptably high cost's and inefficienies in cross border payments.Why? Principally because there is no infrastructure in place to support it -and there seems no likelyhood of there being one in the near future. The Banks inparticular seem to be particularly reticent about making the process any easier...as do the denizens of Europe.It would seem there is resistance within the populace of even those countries who have joined the EMU to have a single currency to spend through out Europe, as a couple of abstract quote's from one recent poll proves. '93% of French tourists still prefer spending the pound over the Euro.' and Only 1.8% of Euro-zone companies use the Euro to conduct business.

I will concede that there are advantages in joining the EMU for the weaker economies of Europe -Spain,Portugal,Greece,etc- as the whole idea of the Euro is to create a 'level playing field' where weaker currencies are'nt overshadowed by stronger ones. Where is the advantage in this for us? Why should we deliberately weaken our economy so as to make it easier for others to compete against us? Particualarly when you consider that rather than floundering outside of the EMU Britain's market share of financial business within Europe has increased since the introduction of the Euro. The cost of joining alone would be detremental to our current position..it's been estimated that the cost of scrapping the pound would cost in excess of £36billion,a figure comparable to the entire budget set aside for Education (£40billion) or our Health service(£49billion),without including the £9billion loss in output I already mentioned.In addition most politicians within Euorope believe that economic union must be followed by tax harmonisation,which for us would mean a rise somewhere in order of 20% to match other EU countries,not idea that is likely to engender popular support among British citizens.

Aside from the reasons detailed above as to why I think it would be unadvisable for the UK to join the EMU I also believe that until the economies of Europe modernise -e.g. cut beueaucracy,loose costly and restrictive employment laws,and open up markets further- that the Euro is doomed to fail,as it appears to be doing already on the world wide market. I personally believe a 'multisytem Europe' is a much more viable option,with the EU remaining flexible enough to trade with both those countries who wish to join the EMU(E.g France & Belgium,etc) and those who dont (eg Britain & Denmark),and to represent more abley the wishes and desires of its populace.It seems to me to be the only way to end the current disharmony and discord from countries who feel their national interests are being overridden in favour of a 'federalised' Europe.

There you go Hazir. :) That should give you something to get your teeth stuck into,and hopefully I shall be a little quicker in posting any further rebuttles than I have in posting this one!!!

[Tristan]

Hehe, no need to get a heart attck over this issue :).

I just thought I should throw my 0.02 euro in the pot.

Firstly, I think Hazir managed rather well to present both arguments for, and some argument against, the euro, while providing us with a good picture on how the EU work. Well done! And if the information is somewhat biased as to the arguments for, so what? He said himself that there were no unbiased information and that he personally thought the EU and the euro where good ideas. So I don't see why you have to react so strongly, A'Lez Gaidin. Hazir certainly seems to know more about the subject than you do (I know that he knows more about it than I, anyway :) ).

Secondly, A'Lez Gaidin you wrote:


For big companies that's important, because they can borrow where the money is cheapest without having to worry about the risk of the currency of that particular market going up or down.
That makes no sense! Did you not understand how a single currency works? how can the euro be cheaper in Calpe than in Dublin... idiot. The money cannot be cheaper elsewhere, if it was we'd still have seperate currency! Short sighted??? I think not.

Of course the euro isn't "cheaper" in Calpe than in Dublin, but the interest rates may be lower, and that, I'm sure, was what Hazir meant. I will refrain from asking who is the idiot here.

BTW, Hazir:


2. The use of drugs in the UK is much higher in the UK than in Holland, no need to come here and get stoned.

You might want to edit this before it's used against you. Of course the use of drugs in the UK is much more higher in UK than in Holland ;).

Lastly, I am Swedish and personally very doubtful wheter the euro would be a good idea for Sweden. Why I think that has very much to do with why I think Sweden's membership in the EU isn't a good idea either, and as I don't care to explain why I think so right now, I leave it an opinion as for now :). I may come back to explain myself more fully, if this discussion continues.

Cheers, Tristan.

[A'Lez Gaidin]

Tristan... try stating your opinion before ripping others apart. And don't judge me boy!

As for you hazir, the obnoxious posts were a bit wrong I'll admit, but you posts were irritating to me and you wouldn't answer my original reply... (hey no-one said that you can't be stupidly childish!!!:))

TMW has put down some very specific points, points that I agree with very strongly! If you'll excuse me I'll delete the "nasty" posts!

[Jearmon]

Originally posted by A'Lez Gaidin

England is not part of the euro currency, yet Ireland is: England set's it's own budget and our economy is booming... Ireland however must take orders from Brussels (as if thats where the centre of power should be), and so it's economy is begining to fail! You clearly speak from the point of view of a weaker country than I do! Yes, for the less economically strong, the euro is a great idea, for the stronger countries however it is a stupid idea and thus should be ignored!

Why should Britain join into a union whereby only they and 1 other country are supporting the remainder of the continent? England and Germany pay in... Everyone else takes out... seems really fair:rolleyes:.



Just to clarify one or two things. Ireland doesn't take orders from Brussels as evidenced by the recent slap-on-the-knuckles about our budget. (Brussels didn't want Ireland lowering taxes, but Charlie went ahead and did it anyway)

As regards Britian being better off outside the euro, tell that to the workers in the car plants who could be layed off because of the strength of the pound and it's consequent effects on British exports...

[Hazir]

The excuse is good enough for me, no offense taken otherwise (of course IRL you'd be dead by now :D ) but removing the 'nasty' posts sort of messes up the debate just as well. Which question of yours I should have answered by the way ?

A couple of short replies.

Tristan, yes, I was talking about the interest rates, not about the actual money being cheaper.

The Man Who, before I reply to your post I want to ask you where the hell did you get your figures? They seem to be referring to the economy the size the Isle of Man rather than the UK.

The 'one-for-all' interest rate question, true, if it weren't for the fact that that argument existed before euro just as strong as it does with euro. The only difference is that the actual interest rate is no longer set by the German Bundesbank, but by the European Central Bank. A bank that by definition has a wider scope than the old Bundesbank. Before the ECB europe-wide interest rates were dictated by the Bundesbank with only the German economy's state as the basis for the decisions. The other central banks only theoretically had their independence. In practise ALL banks followed Frankfurt. I remember a quote from a member of the Board of the Bank of England in the mid-nineties: "The sovereignty of the BoE consists of the 20 minutes we have to decide to follow the Bundesbank". A good example is how the ECB is slow to lower interest rates, which would be good for Germany. For the economies of Holland, Ireland and Spain that would mean certain overheating and higher inflation. Three years back the Bundesbank would have cut rates, and the other central banks would have followed (which they used to do even if it didn't fit their own economy). Today the three mentioned countries all have a say and guess what, the rates weren't lowered.

So the EMU certainly isn't tailormade, but it's less of a straightjacket than the old regime.

The euro infrastructure, you're right that it's still not fully developed, but there is a definate developement going on. Other than in the pre-euro period financial institutions and stock markets are looking over their own fences and occasionally take the step to break them down.

As for the advantage of the 'weaker economies' I don't agree with you. They could actually have benefitted from staying out and devalutating their currencies at will. Now that they are inside the euro they have to stick to very strict rules. Not because the EMU will punish them for transgressions, but because the financial markets will by making it more expensive for them to borrow money.

[The Man Who...]

Godammit..got my 'b's and 'm's mixed up..what a ********!! Should all be fixed now Hazir...:)

I really fail to see how a country like Spain, for example, could possibly have profited by devaluing its currency and staying out of the EMU. Particularly when you bear in mind that it has relatively little manufacturing industry and its principal exports are produce (eg wine). A better part of their economy is based tourism..and bearing in mind the advantages ther Euro was supposed to offer I cant think of another country more likely to be pro Euro...

Orginally posted by Hazir
I remember a quote from a member of the Board of the Bank of England in the mid-nineties: "The sovereignty of the BoE consists of the 20 minutes we have to decide to follow the Bundesbank".

Hmmmm...Wasnt this comment made during the period of the ERM? I wont comment here much cause I must admit Im not sure..but if so I would point out that the UK left that as well for exactly those reasons...

[Hazir]

Originally posted by The Man Who...
Godammit..got my 'b's and 'm's mixed up..what a ********!! Should all be fixed now Hazir...:)

I really fail to see how a country like Spain, for example, could possibly have profited by devaluing its currency and staying out of the EMU. Particularly when you bear in mind that it has relatively little manufacturing industry and its principal exports are produce (eg wine). A better part of their economy is based tourism..and bearing in mind the advantages ther Euro was supposed to offer I cant think of another country more likely to be pro Euro...

While tourism is very important for Spain it still manufactures quite a lot of things. The benefit in devaluation is that the goods and services you produce become cheaper for foreign companies and individuals. If you manage to keep inflation in check not relying too much on imports (which is easier for a relatively 'backward' economy like the Spanish) you become more competitive. For example, if Spain would devaluate its currency 30% (which they effectively have done in the years before they joined the ERM) Spain becomes cheaper for tourists. Let's say Portugal doesn't devaluate. Both countries have roughly the same to offer to tourists. It would be logical to assume Spain's tourism will grow, where Portugal will either decline or stay the same.

Orginally posted by Hazir
I remember a quote from a member of the Board of the Bank of England in the mid-nineties: "The sovereignty of the BoE consists of the 20 minutes we have to decide to follow the Bundesbank".
Hmmmm...Wasnt this comment made during the period of the ERM? I wont comment here much cause I must admit Im not sure..but if so I would point out that the UK left that as well for exactly those reasons...
I must admit I couldn't pinpoint it exact enough to give you an answer. It could have been both ERM and post-ERM.

[Hazir]

Now that was funny, but I can use this space for a new post, I know where you get your figures from The Man Who, they are all from the Keepthepound site. Which makes it a bit more easy to trash them :)

The 1,8% figure is rubbish in 2 ways:
- the currency of the eurozone is the euro so strictly speaking the euro is used the vast majority of businesstransactions.
- Where does it come from? And what part of the economy does this 1.8% stand for? If all multi-national companies in Europe would use the euro for their accounting you'd be talking about less than 500 companies, but probably over 50% of the economy. Furthermore it seems a bit strange if I compare this to my day-to-day experience, most supermarkets in my town price in euro and in guilders, even the hairdresser I go to does his pricing in euro. If the euro-effect has trickled down this far in Holland I can't believe the euro is hardly used (and even so, the whole point is moot since the euro IS the only currency in euroland).

The figure about exports being only 18% of the GDP is funny too. It means that 1/5 of every pound that is earned is made in international trade. Every country has a big percentage of it's GDP being locally based. Does that mean you want to cut yourself off from the opportunities of the international markets ? Of course not, you want a good share of that market. And playing that market is easier if you don't have to deal with insecurities that are caused by currency-risks. The logic of the point seems to be, 'why bother about that puny 20% of our economy, let it go to waste if we only can keep the pound'.

The 36 billion pounds for the change-over :) hehe.. I have been projectmanager in IT related projects in a big financial institution. I claim to have some insight in the way inflating figures can help you put pressure on the government to pay up :) . What you do is simply count every single cost you can think of and never bother to pay any attention to the savings. For example, making all those new eurobills costs a fortune. That's what you tell, but you don't tell it costs about the same as the production of Pound notes. Very easy trick which very often is effective.

[Hazir]

If any of you wants to have a closer look at the notes btw :

http://www.euro.ecb.int/en/section/testnotes.nd5.html
http://www.euro.ecb.int/en/section/testnotes.nd10.html
http://www.euro.ecb.int/en/section/testnotes.nd20.html
http://www.euro.ecb.int/en/section/testnotes.nd50.html
http://www.euro.ecb.int/en/section/testnotes.nd100.html
http://www.euro.ecb.int/en/section/testnotes.nd200.html
http://www.euro.ecb.int/en/section/testnotes.nd500.html

and here for the coins, european side.

http://www.euro.ecb.int/en/section/euro0/coins.html

[The Man Who...]

Come on Hazir....you can do better than that!! :D Refraining from rebutting parts of my post because I didnt include my source?? Must you sink so low? :D

Seriuosly though much of what I wrote are my personal opinions. Some of the figures did indeed come from 'keepthepound' web site,and Im not ashamed to admit it. The site is managed by the Conservatives,who are my political party.The rest of the information comes from the UK national press,specififcally The Times ( www.thetimes.co.uk and the Financial Times. As does a lot of the info at the 'keepthepoundsite'

Orginally Posted by HazirThe figure about exports being only 18% of the GDP is funny too. It means that 1/5 of every pound that is earned is made in international trade. Every country has a big percentage of it's GDP being locally based. Does that mean you want to cut yourself off from the opportunities of the international markets ? Of course not, you want a good share of that market. And playing that market is easier if you don't have to deal with insecurities that are caused by currency-risks. The logic of the point seems to be, 'why bother about that puny 20% of our economy, let it go to waste if we only can keep the pound'.

The point I was making was'nt that we should ignore that 20% entirely,but the better part of our export trade lies outside of the EU,where those currency insecurities you mention are less of an issue. And speaking of currency insecurities any trade with America would be somewhat hampered by the current weakness of the Euro against the dollar now wouldnt it?

Orginally Posted by Hazir
The 36 billion pounds for the change-over hehe.. I have been projectmanager in IT related projects in a big financial institution. I claim to have some insight in the way inflating figures can help you put pressure on the government to pay up . What you do is simply count every single cost you can think of and never bother to pay any attention to the savings. For example, making all those new eurobills costs a fortune. That's what you tell, but you don't tell it costs about the same as the production of Pound notes. Very easy trick which very often is effective


But what savings exactly? Ive not seen much evidence that switching to the Euro would save us a great deal..
And as to the cost of bank note production..hmmm..surely the cost of producing a complete range of new notes and coins cant be compared to the ongoing production of exsisting currency.

[Hazir]

Originally posted by The Man Who...
Come on Hazir....you can do better than that!! :D Refraining from rebutting parts of my post because I didnt include my source?? Must you sink so low? :D

Nope, I know where YOU got them from, and I can give you some slack of course. It becomes somewhat different when a political party tries to fool people by feeding them subjective and questionable information. There are arguments against the EMU, but some loose figures without telling how they were computed or acquired isn't the best way of making that case.
I'll have to check though if I left out important arguments you gave. Because I was under the impression I had tackled them all.

Seriuosly though much of what I wrote are my personal opinions. Some of the figures did indeed come from 'keepthepound' web site,and Im not ashamed to admit it. The site is managed by the Conservatives,who are my political party.The rest of the information comes from the UK national press,specififcally The Times ( www.thetimes.co.uk and the Financial Times. As does a lot of the info at the 'keepthepoundsite'

Nothing wrong with using sources, but I don't think this site is very valuable. I am a bit surprised the CP doesn't stress what is their most valid point against the EMU. There is no way you can defend a position pro-EMU and at the same time claim not to be working towards a closer political union too. It's a matter of preference, I don't think it's bad if we have a real federal Europe. But I know it's matter of concern for a lot of British Conservatives. Maybe they should focus on that, rather than trying to bicker over questionable figures.

The point I was making was'nt that we should ignore that 20% entirely,but the better part of our export trade lies outside of the EU,where those currency insecurities you mention are less of an issue. And speaking of currency insecurities any trade with America would be somewhat hampered by the current weakness of the Euro against the dollar now wouldnt it?

Ok so we are agreeing that international trade is a relevant sector. The better part of the international trade of the UK isn't with 'the rest of the world' around 60% is with the eurozone, I have no idea how much with the rest of the EU or EFTA for that matter.

Trade with the USA actually would benefit from the low euro. Let's say a car manufactured in germany costs 10,000 euros, exported to the USA this car would have to cost $ 11,700
Today the car would have to cost $ 8,900. So the manufacturer can compete better in the US, or pocket a bigger profit. Either way he benefits from the low euro. Since I don't know the exchangerates UDD/GBP for this period but as we both know the pound lost less of its value so a british manufacturer would have less advantages over the same period, thus find himself disadvantaged compared to a german manufacturer.

Also, what you should be aware of is that big economies like the US and the eurozone are a lot less vulnerable to fluctuations of their currencies in foreign trade because they really do most of their trade internally thus always in the same currency. All external trade of the eurozone constitutes less than 14% of the economy and most of that is with the other countries of the EU and EFTA. Countries that even though they aren't members of EMU still try to keep their currencies in line with the euro (FYI : this includes the UK). If all EU countries would join EMU the figure for the external trade would probably drop to around 4-5% like it is for the US.

But what savings exactly? Ive not seen much evidence that switching to the Euro would save us a great deal..
And as to the cost of bank note production..hmmm..surely the cost of producing a complete range of new notes and coins cant be compared to the ongoing production of exsisting currency. [/B]
I can't say which savings, there are too many sides to the matter. One that springs to mind is the simple fact you don't have to have any currency transactions in your trade with europe, not only doing away with the risk involved but also with the costs banks will charge for the transaction.

As for the production of an entire new line of bills and coins, that happens all the time all over the world. Central Banks have to stay ahead of criminals printing false money so even if Britain wouldn't join you'd still see new coins and notes appear, the only difference is that with the euro they are all replaced at the same moment. In stead of 12 countries designing new money in the future there will just be the ECB designing new money for 12 countries. So after a while it will actually be cheaper to have one process than the old 12 separate processes.

PS did you ever travel in the US ? I did and I found it very convenient I didn't have to change money every time I crossed a state line.

[Hazir]

Originally posted by A'Lez Gaidin
[B]
....
Why should Britain join into a union whereby only they and 1 other country are supporting the remainder of the continent? England and Germany pay in... Everyone else takes out... seems really fair:rolleyes:.


This remark is strange and not true.

1. the paying/recieving argument is true for the EU but has got nothing to do with the EMU. I think even the CP would shy away from taking the UK out of the EU.

2. the UK is not a net-payer in the EU, Germany and Holland are the biggest net-payers.

[Hazir]

Originally posted by Jearmon
Just to clarify one or two things. Ireland doesn't take orders from Brussels as evidenced by the recent slap-on-the-knuckles about our budget. (Brussels didn't want Ireland lowering taxes, but Charlie went ahead and did it anyway)

As regards Britian being better off outside the euro, tell that to the workers in the car plants who could be layed off because of the strength of the pound and it's consequent effects on British exports... [/B]

It is an interesting moment in time though Jearmon, Holland is up for the same as Ireland. In Ireland they went ahead, but what does it mean for credit ratings etc ? HOw about govt bonds ?

[Tristan]

Tristan... try stating your opinion before ripping others apart. And don't judge me boy!

Heh, well sorry if you feel offended, it wasn't my intention to sound judgemental and frankly, after reviewing my post, I don't think I did (much :) ). Maybe I should have used more smilies *shrugs*.

As for my opinion I did state it, as I said that I didn't think that the euro (or the EU) was a good idea for Sweden. But I will elaborate so you all can have something to rip apart :).

The euro is a step towards an Europeian federation. That is pretty much admitted on the continent, but the swedish politicians like to pretend that's not the case. And why? Because a majority of the swedes oppose Swedens membership in the EU, and the politicians aren't likely to convince the swedish people of the value of the euro if it is seen as getting us deeper into the proverbial sh!t.

And what is wrong with a federalistic EU? Well, the argument to which those swedes who support EU resort to when attacked too hard about what they think are petty issues, is that EU is a peace project. The EU will ensure that the economics of Germany and France (and the rest of the EU) are so interweaved, that war never again will be possible between those countries (and besides, we will all be a big happy family). Be that as it is, for all I know they may even be right despite the fact that unions between divergent nations and groups of people historically has a tendency to fall apart violentely. But that is not my point. My point is that this is no reason why Sweden should involve itself in this project.

Sweden hasn't been at war since... Hell, I don't even remember when that was. And not to whom either. So the peace argument, when (maybe) making sence for Germany and France, cannot be applied to Sweden. So it boils down to economic and various idealistic arguments.

On the economic side I think it makes little or no difference. On the pro side there is, as Hazir pointed out, (with the euro) less instability caused by exchange rates fluctuation, reduced exchange cost when travelling inside the EU and greater price transparancy between EU countries. On the con side of the euro there is the problem with the restriction of individual states ability to respond to local economic condition. Besides one could argue the wisdom of handing over the responsibility to an unelected body, the European Central Bank.

Other possible economic advantages as the stupid agriculture support system, we would be better without.

So what's left are matters of principle. Handing over (a part) of our sovereignity to EU severly restricts our ability to act independantly on issues of great importance to us, such as environmental policy, third world issues (like immigrants etc.) and other matters of foreign policy.

Let me take an example. A swedish (puplic) school who is concerned over the impact on the environment of long distance transports, can't make the decision to buy local food, as that would violate EU rules of puplic purchasing (or whatever it's called) if the local food is more expensive. I realize the motive behind such a rule, as free trade is the foundation of the EU and individual states shouldn't be able to take measures to protect their own production, but it still sucks.

Another worry is what effect the EU ultimately will have on Sweden's principle of pucplic access to official records. The pro EU argue that Sweden should try to change EU to adopt Sweden's view on this matter (and a lot of other matters too) to which the most common retort is a sardonic "haha". And that leads me to my final argument (I'm in a hurry).

I personally feel that EU is too big an organisation to be influenced by ordinary people (or even a small country for that matter) and that will lead to a distance between the citizens of EU and the leadership (and the bureauracy). If I have a problem with public transportation in my town I can go and have a chat with my local politician. And if I feel that Sweden's policy towards Uganda is criminaly insane I can write an article and stand a reasonable chance of getting it published in a national paper and also have a reasonable chance to change the public opinion in that matter and thus persuade the government to change its policy. But if I feel that EU's decision about the size of the strawberries is lunatic, how do I go about changing that? To whom do I turn? Whereto send an article? And in what language? I believe that the powerless feeling such issues create is fundamentally dangerous to a democratic society.

Well, I stop here. I have more to say, but as I mentioned I'm in a hurry. Feel free to rip this apart.

Tristan

[Hazir]

Tristan,

You are absolutely right, the EMU is a step towards a closer political union and with all probability a federation in the future. The original founders probably would have formed such a federation already if it weren't for the sensitivities in the other memberstates. It is also true that nobody uses the 'f'-word because in some countries a European federation is seen as a very very bad thing by a large proportion of the people. That's why I think a nation that really doesn't want to consider this has to face the question one day, do we want to be in this union or don't we? So far they have gotten away with being inside while playing being on the outside, but unless this entire union is going to dissolve, which I don't see happening, there will be a point where that's no longer possible.

Why do I think the EU (and I mean this as an EU that's going to evolve into a federation) is a good idea.

1. the economy benefits from the freetrade zone that Europe is, especially an extremely open economy like the Dutch economy benefits enormously from the EU so much so that even being a net-payer is easily offset by the benefits.

2. it gives smaller countries back some influence on the politics in Europe, of course the big countries in the end run the show, but at least they have committed to listening to the smaller countries again. You are right when you think it's very difficult for a small country to change something in the EU. But imagine how much more difficult it would be for a small country to achieve anything in a world where it really stands on its own. I personally think the situation of Switzerland is a good example of in what dire straits a state can find itself then. What most people don't know is that Switzerland, not even being a member of the EU is subject to virtual ALL EU directives.

3. the obligation, no need to cooperate is a very useful tool for conflicts to be solved in a peaceful way.
You say Sweden hasn't been in a war since a very long time, actually that's almost 2 centuries. Being the time the French emperor forced Sweden to accept his Marshall Bernadotte for their heir to the throne. During both World Wars Sweden never really fought, but there was a lot of pressure by the combattants on Sweden to allow things that weren't compatible with real neutrality. Especially in WW II Swedish neutrality was real benificiary to the Nazis. Norway and Denmark had the same 'neutral' approach and got run over all the same. I feel free to call this way of thinking arrogant. And I dare do so because Holland used to be just like that up till may 10 1940. We had been neutral for almost a century and a half and we managed to stay out of WW I and we were certain we would be able to pull it off again in the new war between the great powers of Europe. NOT. The Germans decided the second time round they wanted to invade Holland and that's what they did. Neutrality of small countries only exists as long as big states allow it.

As for conglomerates tending to fall apart violently, true again. There is this tendency, see Yugoslavia or the USSR. On the other hand, these countries were held together by repression. The same is not the case for the EU.

The other points you mention to argue against the EU are in facts arguments against certain policies in Europe. I don't think you would say the Swedish state has to be dissolved if you don't agree with the tax-policies for example. You would simply start looking for new policies.

I personally think this feeling of unease about the EU is caused by the fact that people are confronted with a political decision-making process that's so complicated they can't even start to keep tracks of who does what even if they tried. People talk about 'democratic' gaps in Europe where there aren't any. At least not if the legislatures of the states take their job of controling government seriously. Holland has got a couple of points that are seen as essential in the relation with the Union. On those points no Dutch minister can make a deal in the Council unless he has the consent of the parliament. And they don't budge an inch when they feel they aren't informed satisfactory.
The best way IMHO is to deal with this is, go ahead with the political union, make clear who is responsable for what and get it over with.

The system wouldn't be that much different from what it is nowadays but it would prevent backtracking by politicians whenever they feel it's getting a bit too difficult like they are doing right now. Everything good comes from the national government, every problem comes from Brussels. A very easy and lazy approach. And there is no need to fall for their fake excuses.

I felt like illustrating the way things work in the public arena with the topic 'europe'.

Some years ago the UK, France, Spain and Portugal formed a coalition in order to protect banana imports from dependent territories and former colonies. Protection from competition by bananas grown in countries in Central America to be more precise. Part of the policies that resulted from this desire was a European directive describing to very great detail what constituted a banana, the definition amongst other things making the protection scheme possible. Very funny indeed if you rip it out of its context and tell it's yet another example of how the bureaucrats in Brussels are going haywire again. Which is of course exactly what especially British politicians did when they needed a stick to beat with. They really had a fieldday telling the British public what dangers were coming their way. Not bothering to tell the same public they were the staunchest proponents of what laid at the root of the directive.

[Hazir]

The man that, according to the figures I have external trade makes up 28% rather than 18% of the British GNP. Figures coming from a report from the OECD.

[The Man Who...]

Originally posted by Hazir

It becomes somewhat different when a political party tries to fool people by feeding them subjective and questionable information. [/b]

How are they any more subjective or questionable than some of the figures quoted by the Pro-Euro lobby or MEP's,or even some of the figures you have quoted here?

Originally posted by Hazir
It's a matter of preference, I don't think it's bad if we have a real federal Europe. [/b]

I really cannot agree with you there. How can a federalised European government possibly hope to satisfy the differing requirements of a community of such wide ranging cultures as the EU? That way lies the road to further dissent and discord within Europe. Furthermore I fail to see any that any country would willingly pass over control of its armed forces to a central power.

Originally posted by Hazir
PS did you ever travel in the US ? I did and I found it very convenient I didn't have to change money every time I crossed a state line.
[/B]

No, I must confess I haven't yet had the pleasure of a trip to the U.S.,although I have travelled around Europe a little. On those occasions I made most of my transactions using a Visa card thereby ensuring not only consistently good exchange rates but also dispensing with the need for inconvenient money changing,so from a personal perspective their is little advantage there for me in changing to the Euro.

My central reason for not wanting the UK to join the EMU though remains as being the necessity for us to surrender control of our interest rates to the bankers in Frankfurt would be disastrous to our economy.To expand a little further on this: If we had joined at the beginning we would now we would now in the middle of an inflation driven boom similar to Ireland now finds itself in -inflation there have soared to a 15 year high of 6.8%,and because there woefully out of sync with the rest of the EU,they now face sanctions from within Europe -whereas we are currently enjoying the benefits of a stable economy -inflation at 1.8%, unemployment at its lowest for 25 years,and interest rates declining.- a position we wouldn't be in if we didn't have the advantage have control over the setting of interest rates,the major tool in controlling the economy.So I still fail to see why we would have any advantages from joining the ERU...even foreign investment hasn't declined significantly. Originally you mentioned Nissan threatening pull out of the UK as one example..but conversely Honda are doubling their production within the UK. Investment from within the EU hasn't declined either..with investment from France rising by 30% and Holland by 25% since they joined the Euro.

[The Man Who...]

Originally posted by Hazir
The man that, according to the figures I have external trade makes up 28% rather than 18% of the British GNP. Figures coming from a report from the OECD.

Still more realistic than 60%...and it changes little. 72% then come from within the UK or from countries outside of the EU.

[Hazir]

Originally posted by The Man Who...
Originally posted by Hazir
The man that, according to the figures I have external trade makes up 28% rather than 18% of the British GNP. Figures coming from a report from the OECD.

Still more realistic than 60%...and it changes little. 72% then come from within the UK or from countries outside of the EU.

First I'll reply to this one because it's the easiest, this was simply a misunderstanding. You were talking about international trade as a percentage of GNP. I was talking about trade with the eurozone as a percentage of total international trade. Which in short means, according to the figures, 60% of those 28% stands for trade between the UK and the eurozone. If I'm not mistaken that means that 18% of the British GNP depends on trade with Europe, that would stand for about 140 to 150 billion pounds.

28% is twice as much as the 14% for the EU and 4% for the USA. It means the UK is more vulnerable to changes in the exchangerate than either of the two.

[The Man Who...]

OK ok..I'll have to concede that one. A point for your side then...dammit.:)

Oh...and without wanting to sound a total kiss-arse might I just say it's refreshing to debate with someone who is well informed (If wrong!!!:)) and doesnt feel the need to resort to flaming.

[Hazir]

Originally posted by The Man Who...
How are they any more subjective or questionable than some of the figures quoted by the Pro-Euro lobby or MEP's,or even some of the figures you have quoted here?
[/b]
I think the difference lies in the relevance of figures in a debate. A lot of people would say, as you have, 'the euro is dead'. And then they point at the low exchange-rate and feel they have given convincing evidence. The trick many politicians try to pull off is that they make you stop thinking about why that figure should be important. In 1970 sterling stood at about fl 4, then in 76 it went down to fl 2.5, now it stands at fl 3.33 (approximately)Nobody ever told me sterling was dead. My point is, exchange rates don't matter all that much and matter even less so if your economy is bigger. The trick many politicians try to pull off is that they make you stop thinking about why that figure should be important. It works great very often because a lot of people are focused on the value of the euro.

..How can a federalised European government possibly hope to satisfy the differing requirements of a community of such wide ranging cultures as the EU? That way lies the road to further dissent and discord within Europe. Furthermore I fail to see any that any country would willingly pass over control of its armed forces to a central power.
[/b]
The best way to ensure a federation does not encroach on local culture is to make certain your voice (as a voter) is being heared and that the decisionmaking process is easy to understand. In stead of bickering over sovereignty politicians should work to make the european apparatus more accessible to citizens. Which could be achieved by drawing up a European Constitution, and Bill of Rights for that matter. This Constitution should make clear the Commission is the government of Europe and they should be held accountable to the European Parliament. It shouldn't be so that the heads of state appoint the person who holds a position as powerful as that of the President of the commission. How would people ever be able to see a senior civil servant (the way it looks now) as their president ?

The duties of the Union can be defined by the European Council, which I would see as sort of a keeper of the Constitution. In a position where they aren't any longer involved in the day to day running of the Union but still holding the reins. Thus being able to step in and act when the Union oversteps its mandate. That would be a difference between Europe and the USA. Not the judiciary but the states checks if the Union encroaches on the rights of states. Thus every state in essence never goes further than pooling its sovereignty.

I personally think the USA is an example on a different level too: Texans don't think they're a bit like New Yorkers, or the other way round. Implying they are would abhor both. Still they both are Americans and proudly so. The differences don't preclude a common cause.

About countries handing over their armed forces to a central organization. Does the word NATO ring a bell? The command structure of NATO at the highest level is entirely in the hands of the USA. Whenever NATO acts it's under American command.

.. I have travelled around Europe a little. On those occasions I made most of my transactions using a Visa card thereby ensuring not only consistently good exchange rates but also dispensing with the need for inconvenient money changing...

Does this also mean you never had to calculate how much they were going to charge to your card? They must have loved you :D. I have done a lot of travelling in Europe too, and i use my CC very often. But even in Europe there are vast areas where your credit card isn't anything but a piece of plastic. And I do note, you call money changing an inconvenience :D .

My central reason for not wanting the UK to join the EMU though remains as being the necessity for us to surrender control of our interest rates to the bankers in Frankfurt would be disastrous to our economy.

I made a split here because I think your expansion is a different subject. What it boils down to is that you don't want sovereignty to be transferred. Well that's in itself a valid point, if it weren't for the fact that the UK has chosen to join the EU. And by joining the EU it accepted the rules of the game. It also helped writing some of the new rules. And it had good reasons to do so, because in the end it is very clear also in the UK that the EU has some positive sides. The idea behind the EU was political. Even when CE was called an economical arrangement, it had a political goal; peace and cooperation in Europe. Economy was a means to get there, not a goal. The funny thing is that with the entry of the UK into the CE, it almost seems as if it is about the economy after all. You can forget about that. The EU still isn't an never will be a free trade zone without a political dimension. Of course politicians are paying lipservice to the economical stance because that keeps the UK from going overboard. It may surprise you but some countries think (thought) the UK has a leading role to play in the EU. But in the end even they will drop the UK if it refuses to become involved politically too. If you doubt this, you should remember Gordon Brown has no vote in the Euro-X council. At times he hears about news that's important to the UK from the news.

To expand a little further on this: If we had joined at the beginning we would now we would now in the middle of an inflation driven boom similar to Ireland now finds itself in -inflation there have soared to a 15 year high of 6.8%,and because there woefully out of sync with the rest of the EU,they now face sanctions from within Europe -whereas we are currently enjoying the benefits of a stable economy -inflation at 1.8%, unemployment at its lowest for 25 years,and interest rates declining.- a position we wouldn't be in if we didn't have the advantage have control over the setting of interest rates,the major tool in controlling the economy.So I still fail to see why we would have any advantages from joining the ERU...even foreign investment hasn't declined significantly. Originally you mentioned Nissan threatening pull out of the UK as one example..but conversely Honda are doubling their production within the UK. Investment from within the EU hasn't declined either..with investment from France rising by 30% and Holland by 25% since they joined the Euro.
All true, but for the fact that there is no way to tell which way the ECB would have gone with a UK member on the board. There are parts of the eurozone that need higher interest rates, there are other parts that need a lower interest rate. Like I said in a earlier post, Holland (and Ireland etc) wouldn't benefit at all from lower rates, and for the first time in decades we are facing a situation where the interest of Holland and Ireland are taken into account. Not to the fullest extent, I give you that. But without the EMU interest rates would have been lowered, all over Europe, including Holland (and Ireland etc). This is not speculation, but the way things were before the EMU. So like I have said before, sovereignty was pooled and now we have a little bit of control over monetary policies again.

As for foreign investment, yep, it's still strong, but it's done under the assumption that the UK will enter the EMU. Mr Blair is walking a tighrope there, by now I think nobody knows any longer where he wants to take it. But big international investors still think the UK will join (which is not such a strange idea if you know Britain AFAIK is already minting and printing British euros.
....

[Hazir]

Originally posted by The Man Who...
OK ok..I'll have to concede that one. A point for your side then...dammit.:)

Oh...and without wanting to sound a total kiss-arse might I just say it's refreshing to debate with someone who is well informed (If wrong!!!:)) and doesnt feel the need to resort to flaming.

I like this debate too, a little bit of trivia for you. Did you know Margareth Thatcher was all for monetary union before she became prime minister ?

[The Man Who...]

Its no good Hazir..Im getting sleepy now..I had a read through what you just posted but I dont think Im up to replying tonight. I'll check in tomorrow if I can..

Just one quickie though. In rebuttle to the idea that Goverments would balk at handing over control of their armed forces to a central power you mention NATO. The difference I see here is that we still have a choice, albiet a limited one sometimes, as to where and when we commit troops in NATO operations.I cant see this being likely to be the case in a federalised Europe.We have already 'had' to commit a number of troops to the new 'European standing army' after all. Splitting hairs possibly,but still valid I feel.

G'night.:)

[The Man Who...]

I must admit to being a little hazy about the Magaret Thatcher thing..I was still a little to young to be taking much of an interest when she was our PM.:)

It will be intersting to see if the issue of the Euro takes a role in our upcoming General elections..or whether it will be overshadowed by the current Foot & Mouth crisis..

[Hazir]

Originally posted by The Man Who...
Its no good Hazir..Im getting sleepy now..I had a read through what you just posted but I dont think Im up to replying tonight. I'll check in tomorrow if I can..

.. NATO. The difference I see here is that we still have a choice, albiet a limited one sometimes, as to where and when we commit troops in NATO operations.I cant see this being likely to be the case in a federalised Europe.We have already 'had' to commit a number of troops to the new 'European standing army' after all. Splitting hairs possibly,but still valid I feel.
G'night.:)
The way we came to the establishment of the Rapid Reaction Force pretty much shows the Americans have us over the barrel in NATO. They did their very best to frustrate the EU in an effort to create a military structure in which it could act without calling the Americans in. Funny where you usually hear them complain about having to sort out our problems, the moment we try to take care of them we find out they actually are quite happy sticking their noses in our affairs.
In Europe, also in a federal European Union there is no reason why there should be no control at all by the member states over the army. Working on our present model,which I think is flawed but in essence a good system to balance the power of Union and member states, it would be natural if something as important as going to war is a Council matter rather than a Commission matter. Which is actually the way things are right now, the RRF isn't part of the domain of the Commission but of the Council.

Also in NATO we don't have a real choice, we're bound by treaty to go to war under certain circumstances. In the EU we make decisions based on the situation to deploy the RRF or not.

PS, a totally different but not unrelated question. What is the going rate for a mortgage in the UK at the moment (Joe Average type of thing)? Overhere you could get a 5 yrs fixed rate at 5.2%.

[Tristan]

Hazir,

1. the economy benefits from the freetrade zone that Europe is, especially an extremely open economy like the Dutch economy benefits enormously from the EU so much so that even being a net-payer is easily offset by the benefits.

Fair enough. Economics isn't really my field so I can't argue with you here, but this sounds reasonable. However, I believe that having a freetrade zone isn't dependant on having a federalistic EU, or for that matter a single currency, even if the latter might ease up things a bit. Correct me if I am wrong, but we did have a freetrade zone even before Sweden, Austria etc. joined the EU (EFTA or something, I told you economics wasn't my field :-) ).

2. it gives smaller countries back some influence on the politics in Europe, of course the big countries in the end run the show, but at least they have committed to listening to the smaller countries again. You are right when you think it's very difficult for a small country to change something in the EU. But imagine how much more difficult it would be for a small country to achieve anything in a world where it really stands on its own. (...)

It might indeed be so that a small country stand a greater chance of influencing Europeian politics from within the EU than from the outside, but I wouldn't bet my money on that. However, the problem as I see it, is that the potential influence gained by far outweighs by the influence _lost_ in the ability to make independant decisions. You ask me to imagine the difficulties a small country would have to achieve something on its own, and it is true that the opinion of the EU carries considerably more weight than, for example, Sweden's. But would EU's opinion also be Sweden's opinion? (Or maybe more important, would it be mine? ;-) ) That EU have a bigger chance to influence the world than Sweden on its own, is of no importance as long as we cannot be sure that this influence is used in a way that's approved of by the Swedes. Don't get me wrong, I don't think that Sweden has to have its way in every issue, but I don't like the thought of having to step down on something that the majority of the swedish people think is of great importance, or conversely, lending weight to a view that the swedish people don't support or maybe even think is fundamentally wrong.

I can't comment much on your Switzerland example, but they can't be legally obliged to follow EU directives (unless they approve of them one by one), can they? It is another matter if they follow them because Switzerland benefits from doing so. Then they still have a choice.

3. (...) During both World Wars Sweden never really fought, but there was a lot of pressure by the combattants on Sweden to allow things that weren't compatible with real neutrality. Especially in WW II Swedish neutrality was real benificiary to the Nazis. Norway and Denmark had the same 'neutral' approach and got run over all the same. I feel free to call this way of thinking arrogant. (...)

Oh, I agree that it would be arrogant to assume that only because Sweden have been lucky enough to have peace for a long time, war can't happen in the future :-). Maybe I didn't expressed myself very clearly, but what I meant was that only because Germany and France have a history of aggression towards each other, and that it might make sence for them to get as close as possible with each other in order to prevent further conflicts, this doesn't necessarily apply to Sweden. Would Germany be less likely to attack Sweden if they had big economic interests here (something I like to see possible even without the federalistic frame work of the EU)? Hmm, when thinking about this question I realized that it might indeed be the case, but only if the germans already think that Sweden is a german province in the north ;-). Anyway, from an outside attack by for example Russia, EU might indeed provide some protection, but since Sweden's neutrality policy is a diplomatic lie anyway, we can as well expect help from NATO :-).

As for conglomerates tending to fall apart violently, true again. There is this tendency, see Yugoslavia or the USSR. On the other hand, these countries were held together by repression. The same is not the case for the EU.

Not yet ;-). No, seriously, I don't think EU as it is now is at risk to fall apart violently. The structure is too loose, and if a population in a country gets too dissatisfied, I'm sure they could take a vote and peacefully leave the union (I'm not sure how it would go about legally, but politically it's certainly possible). But how will it look in fifty years when (if) EU has a full government with power of its own? Imagine it is economic depression and some politicians in France are fed upon the dissatisfaction of the people, directing their anger towards the Duch peasants whos fault the whole situation are, and getting a majority in the national elections. A not too unlikely scenario. Would the EU government let France leave the union peacefully? I don't know, maybe we should ask the americans that may read this how Bush would react if California suddenly decided that it wanted to leave the US. And I think such a scenario would be more likely to happen in the EU, as the US at least have a common language to give them a sense of being the same people.

The other points you mention to argue against the EU are in facts arguments against certain policies in Europe. I don't think you would say the Swedish state has to be dissolved if you don't agree with the tax-policies for example. You would simply start looking for new policies.

Well, this is true, but I mentioned those points not because they are points where I disagree with EU policies (well, they are, and I could come up with dozens more :) ), but as an illustration to what is so difficult to change about EU. EU _is_ its policies so far as they cannot be changed by me or by Sweden in any significant way. And those policies affects Sweden (on a sometimes ridiculus detailed level, EU has a principle of subsidarity (clause five in the Rome agreement) but so far it hasn't been working very well), and as I wanted to illustrate with my little example, if those policies where of local or national origin, I would know how to go about to change them. If I (or Sweden) can't change a EU policy, that policy equals in effect EU, and the only way to regain our freedom and our democratic legitimacy may be to leave the union altogether.

The best way IMHO is to deal with this is, go ahead with the political union, make clear who is responsable for what and get it over with.

Well, I agree with you here, as this will probably lead to that Sweden need to have a new vote on the issue which hopefully result in a no this time :-).

As for your banana example, I agree that it is hipocricy for the politicians in the countries that supported the regulations to take it as an example of silly bureaucratic directives from Brüssel, but I can still see it as such :-).

Tristan.

Heh, this thing told me I had included too many imagies in my post, so I have edited for smilies :-).

[Hazir]

Hi Tristan,

You are right in saying a Freetrade zone isn't necessarily also a political union. And indeed, the EC and 6 other countries amongst which you would find Sweden were in a free trade zone. EFTA, actually I think EFTA still lingers on with Switzerland and Iceland as its last members. But like I said in an earlier post, EC nor EU are pure cooperation. The the economical cooperation is a means rather than a goal in itself. If Swedish voters thought membership of the EU was sort of like a continuation of EFTA with a different name, then you were misguided or tricked.

Where I don't agree with you is that a common currency could exist without a closer political union. I totally agree with the opponents of the monetary union when they say a common currency in the end will lead to a common economic and maybe even a common tax-policy. There is no way you could get the EMU through a real economical crisis if there isn't close political coordination. With the forming of Euro-X you already see that happening.

Small countries and influence. What you say is that you think Sweden lost more in decisionmaking sovereignty than it gained in influence in Europe. Or at least that the latter is not enough to offset the first. There is little I can add to my arguments, I don't think small countries can make al that many decisions on their own without facing the consequences. If I limit this to monetary policies I have an example from Holland which taught us a lesson we shouldn't forget. In the late eighties Holland's economy was outperforming Germany. Then the Bundesbank lowered interest rates. Normally Holland would have followed suit, but this time the Central Bank did something outrageous; they put the Dutch interest first and did not lower rates. Sounds pretty desireable doesn't it? A small country taking its own interests into account and acting on it. Wrong, because the financial markets didn't want or expect that to happen. And because the financial markets wanted Holland to stay in line with Germany they 'punished' Holland. They simply lowered Holland's rating because, by not lowering its interestrate Holland had proved it self untrustworthy. Lending money for the dutch state, businesses and people has been more expensive than in Germany for over a period of 10 years because of this act of sovereign behaviour. We tend to think less of sovereignty and more about the realities of the market ever since.
The bottom line is, small countries usually have very little power, very often so little power that they can't do anything at all to make a difference. In EU small countries don't gain real power, but the have gained some influence. And I still think some influence is better than nothing at all. And even if the influence doesn't result in policies that you like, nothing is lost, because those policies would have come about anyway. I know this is a very cynical approach, but I simply think that's the way it is.

The Swiss example is really horrible, they retained their sovereignty, but because Switzerland is a country in the middle of Europe they had to make treaties with the EU in which the EU made Switzerland accept the principle that on 'European matters' Switzerland would have to follow EU Directives. It's a blanket agreement, no such thing as judging every directive on its merits. Either they accept or they loose all benefits. Nice little example, Switzerland had a demand of the EU concerning transport. I don't recall what it exactly was but that's not too important. It was one of the things that falls under the EU jurisdiction. The commission was sympathetic to the request, even some some surrounding countries. But then the Dutch government stepped in and by simply stating the Swiss could join any time if they wanted but till that moment there was no chance in hell the Dutch government was going to give the EU a mandate to renegotiate the terms of the treaty. The Swiss have managed to get themselves in a situation of 'about them but not with them'. Probably the worst situation you could be in.

On the need for peace/neutrality. I wasn't trying to single out Sweden here for arrogant behaviour. The psychology that comes from a succes at staying neutral for so long is understandable. Why worry about war if you haven't known it for almost 200 years? The point was that the choice is and wasn't for Sweden to make. Complacency can be dangerous, as Holland has learned. As far as we are concerned there is no such thing as 'overkill' on ways to make certain there is never again going to be a war in Europe. (Oh well at least not in the part of Europe where we are)

A prison of nations, or the risk of a violent break up. I think there is no such thing as an eternal solution to everything. I think there is no country (besides some real small countries) that has existed with exactly the same form for 500 years. As for the risk things could get nasty, I think we should never try to exactly copy the USA when creating our federation. There should be a safeguard against the Union taking over the memberstates much stronger than in the USA. Not because I necessarily think the US system is bad, but because it doesn't fit a situation where the cultural diffences are as big as they still are in the EU. If you see my replies to 'the man' I think you also know how I would like to have this done. Legally speaking I don't think either the US nor EU has a provision for secession.

The subsidarity is a point which is important in the same framework. I don't think its true that it isn't working like you say. I think the entire decision making process is muddled up so much so that you can't really say if decissions are made by the federal or confederate part of the Union. Again I say, disentangle the parts and make more clear how we are governed.

I don't know enough about the Swedish situation to say if you would need a new vote on the matter. Actually I think you don't need to change the fundamentals at all, just changing the rhetoric and day-to-day handling of the Union could make a big difference.

Bananas , that directive was protectionist rubbish, but to the proponents it was just a weapon in the war against bananas imported from Central America. Funny was that they didn't pick on the directive in Holland while they were totally against the policies it stood for. Hehe.. actually Holland was exempt from the sanctions by the US on goods from Europe that were the result of the 'tradewar'.

I'

[The Man Who...]

Hey Hazir..just caught your post in the Wot forum. I havent left the debate yet..I did write a reply earlier on today then my connection died and I lost it and that horirible thing called 'work' prevented me from trying again!! And work has also left me feeling a little 'fried' tonight and I dont think I do your post justice by replying now.:) A little lightwieght book forum spamming is about my limit...:D

I wil be back tomorrow...

[Hazir]

Ouch that sucks, writing a long reply and then losing it. I know the feeling, for some reason netscape 6 has refused to work for 2 days now. I am using an older version but that doesn't really like it when use backspace too enthousiastic.

[The Man Who...]

Yep good old Nutscrape. Still its usually more reliable than Internet Exploder...

And you know what really bites? Id nearly finished writing as well..grrr
Anyways thats enough 'spam' in this serious deabte..c ya tomorrow!

PS..Dont you find it funny,though, that we seem to be getting more quality posts here on the 'spam' forum than we have elsewhere?? :D

[Hazir]

Hmmm Netscape 6.01 seems to have died for good. It refuses to run anything past the opening screen.

Anyway, I was very happy with the decission of the ECB not to lower interest rates because it makes clear that my point on the decision making is valid. The markets may have tunnelvision when it comes to the eurozone economy, looking at the big three only, the ECB shows that the interests of smaller countries like Ireland, Holland and Spain count for something again.

Also funny that the markets think the ECB is going to play a role in the managing of the economy. The mandate for the ECB is not that but to keep inflation in check. Which is exactly what they are doing.

[Hazir]

The Man Who,

Maybe you'd like to think on this too. Is it maybe the case that Brits in general feel so cool towards Europe because the media in the UK seem to be concetrating on the UK and USA to the exclusion of Europe. It's something I noticed many times while watching BBC or reading British newspapers.

[Hazir]

Just to keep the thread alive while the Man Who is pondering his reply. If you think the euro went down in a bad bad way (from $ 1.17 to 0.87 right now) look at this. In the mid seventies of the last century a you would get 4 turkish liras for $ 1. Today $ 1 = 1,100,000 Turkish Liras (and no I didn't mix up commas and dots).

[The Man Who...]

Hey Hazir...finally I have the time to get back here...


I must say at this point that the ideals of European federalisation are worthy...I just fail to see them working terribly well in practice.
I can certainly see the advantages in being fully militarily independent from the US, the US goverments attitude of 'You cant win without us' is a little wearing, although I still maintain that no Goverment will willingly surrender total control of its armed forces to a central commission/council,no matter how strong its voice is within that body. And besides any force that is controlled by comittee is inherently less effective...too many Cheifs and not enough Indians! Even the The Gulf Conflict,though ultimately successful,proved this.

Ok..now to take this in a slightly different direction. What are your feelings in regard to the Common Agricultural Policy? Fromj th UK's point of veiw this began back during the Second World War to encourage us to be self-sufficient in terms of food. After the war this policy was continued,and subsidised by the goverment. Framers were encouraged to mechanise,to clear hedges and drain marshes and turn them over to arable land. This was then adopted within the EU and consolidated into the CAP. That policy has from then until now encouraged over-production,and led to the farmers being subsidy dependent. Now were in a position where the rest of the world are putting pressure on Europe to open our markets to them,and to end the subsidies. When countries like India and Argentina can compete on a level playing feild they will be able to seriously undercut the prices of the European farmers,Euro or no Euro,leaving us with the problem of then finding alternative employment for those in the industry,and the cost of having to manage the countryside no longer being farmed. To me its this kind of policy that suggest to me a federal Europe cannot succeed.

More to follow...

[The Man Who...]

Nearly forgot...

In answer to your query regarding Mortgage rates -I dont know how it works in the Netherlands but here the choice is bewildering..and consequently the ratews vary,but as an average the 'common' rate is currently 5.35%...

[Hazir]

Hi TMW,

I don't think too much on the CAP but that it's gone haywire and needs a major overhaul. The original idea was good, and I think it's still valid in this world where you can't make yourself 100% dependent on others. But where it went wrong is that they are subsidising exports as things are at the moment. And that's a bit too rich for me. I don't think the European taxpayer should be paying to encourage farmers to overproduce produce that is being offered to people abroad at reduced prices. As is you could almost say we pay twice for our food. First time when we pay our taxes, second time when we pay our inflated prices.

I personally think subsidies shouldn't go towards the industry that farming has become nowadays but towards encouraging a more biological way of farming. I really can't see how the exports to third countries justifies all the billions of euros that are spent. I could see some justification in a sounder CAP that encourages farmers to work in a less industrial way.

With the original idea of the CAP in my head I think some protectionism is acceptable in this sector of the economy. No need to make ourselves vulnerable by giving up on producing food altogether. If you combine this with demands in the fields of food-quality, environmental sound production and animal wellfare farmers wouldn't be run out of business by cheap mass-produced foods of questionable origin.

PS. The percentage you name is typical for an off the rack mortgage with a 5 years fixed rate. The choices overhere are mindbogling too, about every bank manages to create its own array of special products.

[The Man Who...]

Hey Hazir..

Did you see the results from the Allensbach Institute poll in Germany? It would seem us Brits aren't the only ones loosing confidence in the ailing Euro..

75% of the German population, having lived with the Euro since '99, have now decided that they want to keep the DM.This figure rises to 83% of those Germans living in the former East Germany. Quite a change from two years ago when it was only 40%.And of the remaining 25% only 2% have 'great confidence' in its future success. As further sign of confidence lacking, to date only around 7% of Germans have converted their savings or assets into Euro's.

The main reasons sited for this turn around were:

Germany's Employee working hours have increased.

Unemployment has soared

Concern over a currency who's value has decreased by 32% in less than 12 months.

Concerns over the upcoming joining of Greece diluting the currency even further.

Predictions of rise in inflation to 4% by the middle of this year,because of spiralling costs for imported goods.

Concerns that embracing the Euro will set the German Economy back 18 months.

Many of the same reasons that I feel the UK would be unwise to join the Euro,and far less to do with national pride or xenophobia.

And one final point: Don't you find a little odd that with the US dollar sinking as their economy takes a breather,that investors aren't fleeing to the haven of security the Euro should have provided? Far from recovering lost ground this year,so far its sinking lower.

[The Man Who...]

*bump*

Just to keep it alive for my buddy...:)

[Hazir]

Just a short one this time TMW.

Germans who are against the euro are stupid beyond repair. Where I can sort of see why Brits are hesitant the Germans have no reason whatsoever. If it weren't for their stupid economic policies towards the former GDR the euro would be in a much better state than it is today. Also, a DM outside the euro (almost inconcievable but just for the sake of argument) would be in a much worse state than inside.

The Deutschmark is a highly emotional issue in Germany, they tended to be proud of their money in a way few other people would be able to understand. I have been in class with several Germans for 2 months during a language course in Spain. During a conversation class the topic was 'what are you proud of in your country?'. They would come up with things like the strong Mark or the Bundesbank. I may be mistaken but I don't think anybody from another country would come up with their currency or an MPC as something to be specifically proud of. (NB I am talking about the pre-euro period)

Probably that was one of the reasons why we are now stuck in a situation where our currency is the euro but where you can't actually hold it in your hands. Sort of to massage the German psyche. I think that backfired enormously in two ways.
The first is that people don't realise their local currencies are as dead as the Dodo. The currencies were abolished almost 2.5 years ago but people are still made to believe the pictures are the living bird. And they believe it.
The second negative effect is that the several hundreds of billions of euros that circulate in the black market are being fed into the USD because the people who hold that money are affraid their holdings will come out once the change-over starts. I won't say it is the only thing that pushes the euro down, but it sure accounts for some of the pressure.

[Hazir]

A tiny little extra TMW.

I suppose the numbers you mention about Germany are correct. The other euro-countries seem to be doing quite nicely to very good.

Concerns about Greece joining are real funny. The Greek economy is too small to have any impact on the euro at all, either way. It would be like looking at the economic indicators for Arkansas to make predictions for the entire USA.

[Hazir]

*bump*

[Hazir]

*waiting for the gloating over the strong rise of the euro over the last week*

[RandBlade]

TMW seems to have disappeared. I'll right eventually from a future British economists PoV.

[The Man Who...]

Hi Guys....Im in fact still alive and kicking. But works kind of taken over lately. I will try and find the time to form a cohesive rebuttle to your last post Hazir,just as soon as time allows...

Randblade..please feel free to keep the Union Jack flying in my absence!! :)

[Hazir]

*taps foot*

[RandBlade]

I'm revising for my end of year Economics exams, and have cut back on the amount of replies for the threads i'm already debating on. Will pick this one up with a vengance soon.

[Hazir]

That almost sounds as if you are going to get ready for some serious 'safe the pound' action Randblade. I think I may have to start building a bulwark for when the war begins.

[Hazir]

Now now now.. isn't that a funny coincidence, the BoE lowers its rates with exactly the same percentage as the ECB.

BTW I am a happy man today :) just looked at the markets.

[litbug]

When I went to school in France, we talked about the impending arrival of the Euro (this was spring of 99). At that time all prices were listed in francs and in euros. The French were bewailing "la morte de la franc," and seemed to be taking the whole euro thing pretty hard. I was just wondering, what is the word on the street in other European nations? Are people happy about it, or do they feel that they are giving up part of their national identity?

[Sheriam Bayanar]

I think it's kinda nice and convenient for when I want to go to another country. I know a few people in Germany and Belgium, not too far across the border (really some live about the same distance as a person in Groningen would). Yet I don't easily go visit them because of the hassle, one of the problems being the currency. It's a pain to exchange small amounts for a one-day trip, costs way too much compared to how much you want to spent total. First exchange the money, then change back what you got left, and you usually can't return coins so any small change gets dumped into a drawer until the next trip.. I think I'll be more inclined to take a short trip across the border when I don't have to bother with another currency. Too bad England doesn't take part.
And the other way around, it'd be more convenient for tourists coming here, too. Which affects me since I work at a theme park :)

[Hazir]

I think if you talk about feelings you would get mixed replies from people. I also think that probably you will get different answers depending on the country you ask the question in.

People from countries with old and hard currencies usually have this feeling it's really too bad their coin is going to disappear. Like in the case of the Netherlands where we have had the guilder for over 350 years it is viewed like losing a little bit of identity. I have heared that people in Italy and Spain couldn't care less about the disappearance of their money, they didn't value it too high anyway because of high inflation.

A totally different question would be, will you appreciate the fact that you don't have to change money when you travel to another country in Europe. Then you will see that a lot of people will think that is a positive effect of the coming of the euro. I also sometimes think it would be a nice idea to hop over the German (60km) or Belgian border (75 km). I hardly ever do it though because the first thing that jumpt to attention is that I will have to get the local currency and probably will get stuck with that too once I am back. I know that the problem really shouldn't be that big, but it is simply too much of a pain in the rearside to put up with it.

In short,

will i miss the guilder ? Sure

will i miss the deutschmark, belgian franc, austrian shilling ? No way.

[Sheriam Bayanar]

Yes, in a sentimental way I will miss the guilder, and especially the dime. We have a nice little dime, I've been collecting dimes for a looooooooong time, hardly ever spent one in fifteen years or so, I always keep them apart. But hey, times change, and there are several of the new coins that look really neat too. I hope to get my hands on some of the finnish, italian and greek ones, for starters (without going there or exchanging them on purpose, that'd take the fun out.. it's more fun just to watch what coins I get in the stores).

Sheriam.

[Hazir]

I remember some people calculated the streams of coins through the union. IIRC less than 10% of the coins in Holland will be 'dutch' eurocoins after only 5 years of euro.

[Hazir]

232 days till euro-day, just to remind the ones concerned.

[RandBlade]

I've finished my Economics lectures for this year now, but I'll try to put this in simple terms still. Two definitions: macroeconomic refers to the entire economy of a nation; microeconomic refers to individuals, individual firms etc

Economics is the only topic I can really claim to be a bit of an expert in, and after years of study, and personal interest in the euro, my stance is: I'm undecided.

Bet you weren't expecting that. ;)

Supposed advantages of joining:
1: Easier use when going overseas
2: Increased trade/Less costs
3: Increased stability
Supposed risks of staying out:
3: Exclusion from Single Market
4: Exclusion from EU decision making

1: Definitely an advantage. More convenient etc
2: Also true. It's estimate that if Britain joined the single currency, GDP will increase by 1% due to the lack of currency transfer risks.
3: Not true. There's more chance of stability if interest determined locally (more later)
4: Not really true. The single market is the lack of tarriffs and other intentional impediments to trade, which exists irrespective of the single currency.
5: Not important. The only exclusion is from the ECB interest rate which isn't important (more later)

Supposed advantages of staying out:
1: Nationalistic reasons.
2: More flexible microeconomic policies
2: Magnet for inward investment
4: ECB has bad interest setting policies
5: Greater degree of macroeconomic independence

1: Nonsense. I feel pride from the English Cricket victories, not the rate of the Euro. Ease to go overseas is more important than pride.
2: Not really true. Britain has a lot more flexible labour laws, with good effects, low unemployment etc. The French would like all of Europe to have similar restrictive laws as they have, and that's something we must say no to. But we can still join the Euro and say no to that.
3: Uncertain. This can - and is - argued both ways, and neither is necessarily true, we can't judge yet.
4: Sadly true. Due to the political nature of this, this isn't normally argued, but it's true. The ECB has a rediculous limit for inflation of 2%. The BoE has a target of 2-3%. The ECB is far to restrictive, and unless that changes, growth will be choked.

5: Critically important. Being able to set interest rates is a crucially important macroeconomic tool. If there is a shock to the economy (say if the recent foot-and-mouth scare had been worse) then it's possible to lower interest rates to kick-start the economy. If the economies 'over-heating' it's possible to raise them to cool it off before inflation gets too bad. However this tool is lost when you join the Euro.

Hazir says that real control is gained by joining the euro, however it's not true. Britain does use its interest rates as we need, not Europe. Yes they both changed on the same day as you pointed out, however that's putting a lot of spin on it. Yes they were both changed by the same amount, but from different to different rates. British interest rates are 0.75% higher than the European ones, because a lower one would be inflationary for us.

Also problems have already started within the euro-zone. Germany needed the cut, and possibly a larger one, but Ireland and others didn't. Different nations are already needing it to go in different directions. Being one voice of many is a major loss to setting your own.

So in the end it come down to just a few reasons:
For joining:
1: Convenience of use
2: Increased trade, tourism etc

Against joining:
1: Loss of setting interest rates
2: Irresponsible ECB (although this could be changed so its not too important)

At present I'd say the loss of interest rates is big long term loss, but the problem is we can't yet determine how big. I'd ideally want a single currency, but at present its not possible to determine how big a loss the loss of control of interest rates would be. Too big or neglible? The best decision is literally, wait and see. See how the other countries in the Euro cope.

Well what do you think of that?

[Hazir]

Randblade, shouldn't your CT read 'true son of Tony Blair'? :D

My comment on the fact that the rates were changed by the BoE the very day the ECB decided to move was only partly serious. I know the BoE has a certain degree of independence and it seems to use that. On the other hand I have great doubts if the margins they can operate within aren't limited severely by the fact that they are in the same common market the ECB is operating within. Sort of like a mouse and an elephant sleeping in the same bed. Of course the mouse can move, but when the elephant moves the mouse has to move. I think that over time the margins within which the BoE has to operate will become even smaller as the EMU grows further.

Probably my views on the euro are coloured by the dutch experience with the German Bundesbank. Officially the Netherlands were free to do whatever they wanted, but the most important consideration was to benefit from our links with the German economy. We sort of grew used to a situation where monetary policies were not tailor made to our economy, but overall we benefitted from giving in on that point.

As for the actual policies of the ECB, you dislike them and I suppose that you could say the ECB has a very limited focus on monetary policies. As far as they are concerned all that matters is low inflation, sort of like the Bundesbank in the old days. It does have an advantage too though, it forces the governments in the EMU to really reform their economies, to really tackle the problems they have been avoiding for so long now. I don't know about the UK, but there are still a lot of options open for European governments to get the economy turned up without losening monetary policies. Like a more liberal labour situation in Germany and France, tackling government spending in the southern countries. Things the restrictive policies of the ECB is forcing them to face right now.

This last point would be a perfect reason for some conservatives to stay out of the EMU. And in a way they are right, the government of the UK is trying to cheat you into the EMU by acting as if it's an economical decission. Big deal, those 5 criteria for membership of the UK. What really will happen is that the UK will embark on a path towards a closer economic and political union. But god forbid the ordinary citizen finds out.

[RandBlade]

If I sound like TB, then it's because he's right as far as his views agree with mine ;)

Did I ever say that they were trying to cheat us by making it an economic decision? The only reason to stay out is economic. And only one economic reason, and that's the loss of control over interest rates.

We do have complete, 100% control on our rates right now. And we're not being forced by the ECB, in fact it's the other way around. The ECB was put under pressure to also cut, and it was more of a surprise by them, we were already going to.

Our rates have never been set because of the Fed, the Bundesbank and won't while independant by the ECB. So long as we are independant, we have serious control over the interest rates. And that is a crucial factor, and the only reason I think not to want to join. How important a factor it is, is certainly open for debate though.

The European interest rates will always be a consideration for Britain, just as the rates the Fed in the USA are. In fact, less emphasis is placed on the european rates than the America ones. But right now we are 100% independent. Foreign rates are just a consideration as far as we're concerned, nothing more. Otherwise, why are our rates 0.75% higher? That's a very big difference!

As far as changes in the markets are concerned, we're already the most reformed nation in Europe. There's no changes we can make for the better, except perhaps removal of the CAP. The fear in fact is more regulated markets due to Europe, being brought down to the French (esp) and German levels. But that's not really to do with the Euro.

It is crucially important to keep inflation low, and continental Europe has had a very poor record in the past, but the ECB has gone far to extreme with it's 2% limit. A target of 2-3% is much better. There's nothing wrong with 3% inflation, and if needed we can let it get even higher temporarily. By not trusting themselves, and trying to gain credibility, the ECB has had it's hands tied rediculously tightly and if they stick to that limit it will choke the European economies growth seriously, with permanent damage (this isn't major damage I'm talking about, but consistently less than possible investment has one inevitable consequence).

[Hazir]

Randblade, you really don't realise there is no such thing as real independence for a country as small as the UK, having an open economy like yours? Of course the BoE can play at it, but the bottomline at the moment is that the markets don't punish the UK because of the fact that the Labour government gives the impression abroad that the UK will join. If the UK would officially decide NOT to join then the situation would change dramatically. Then the UK would be out on its own monetarily speaking and the results for the economy would be felt immediately and for a very long time.

PS. Don't even try to point at Switzerland as an example of a country that manages quite nicely on its own. Switzerland has NO independent monetary policies, they have followed the Bundesbank slavishly and right now they are doing the same with the ECB. Which explains the strenght of the franc, the markets can predict the moves of the franc, which makes it a safe currency. Quite unlike the pound if the UK doesn't join the EMU.

[Pop Men Dib]

I don't see why anybody would care whether Britain joins the Euro. The British are well known for being fools messing things up, if you let them into the Euro, they'll try to sabotage and suffocate the EU. And they're too proud of their 'British made sausages' to want to join, so who the hell cares, let them be the poorest country in Western Europe if that's what they want. They'll probably thank you for it later, it's probably the only way they'll ever get some kind of Empire back (ie. richest country in the Third World).

[RandBlade]

Britain is a member of the G7. We are not a small nation, and our Bank in independent. We have an interest rate 0.75% different to the European one, we're clearly independent. How can you argue we're not? I can point to the fact that our interest rate is 0.75% different to say that yes, we are independent. Do you have anything to say that we're not? Holland may have just followed the Bundesbank, in which case it is definitely better to join, but we've always been independent. We've never shadowed the Bundesbank, or the Fed, and we haven't shadowed the ECB.

Regarding the markets not punishing us because of the impression Labour gives, I don't buy that. The markets are smarter than that most of the time. Why would we be punished? What do we have to lose?

I won't point to Switzerland and a nation that's surviving it's own. I'm pointing to the member of the G7, and UN Security Council, the United Kingdom. We are surviving on our own, and certainly don't have to give up our independence, which clearly is independent.

Note that I'm not a euro-skeptic. Actually, most of my views would have me labelled as a europhile here, but I really don't believe it.

Pop Men Dib, what are you talking about? The only nation in Europe that can possibly be argued to be stronger than us economically is Germany, and that would determine on your point of view, our unemployment rate is nearly half of that in Germany. And don't even try making comparisons to the French, we're doing so much better than them it's rediculous.

Do you know what proportion of investment going into Europe goes to the UK? 1/15? Higher. 10%? 20%? 33.333?

40% of all inward foreign investment goes to the UK. Unemployment in Britain is lower than most European nations - by an incredible margin when compare to France and Germany. Look at the real figures, Britain is certainly much more than just surviving on its own.

[RandBlade]

Originally posted by Hazir
*waiting for the gloating over the strong rise of the euro over the last week*

Rise of the euro? ;)

[Hazir]

Randblade, that 'we're not small' post was real funny. What does being in G7 say about being big ? Even Canada is in it, and the only standard by which that country is big is landmass. Or being a permanent member of the UN security council, Germany isn't a member, nor is Japan, both are significantly more important players than the UK.

Foreign investment is all very nice, but every year investors make decisions about where to put their money. The stream can dry up before you know what hit you. Some countries in South East Asia can tell you about the blessings of foreign investment.

Sorry I have to break the news to you Randblade, but the UK is an island-and-a-half off the coast of Europe. And most people or politicians in Europe aren't too impressed by it's track record in any field. Even the fact that unemployment is amongst the lowest in Europe (not the lowest btw) doesn't mean too much if it stands for a class of working poor.

[Pop Men Dib]

I think you're wrong about the French. I remember seeing the Economists world stats for this year and by GNP the 4 richest countries were USA, Japan, Germany then France. UK came next closely followed by Italy and then China.

Also, I remember seeing stats from 1995 I think GNP/inhabitant and Britain ranked 5th 'poorest' country in the EU, just after Greece, Portugal, Spain and Ireland.

Britain is insignificant politically and militarily, as are all Western European countries, out of context of the EU. OK, the UK can still bully some small Third World countries but on the international level where it has to compete with the giants you can forget it.

[RandBlade]

There is only one political giant, and that's the US. And we're not bullied by them, for that we're part of the EU, but typically act OK on our own. That doesn't rely upon membership of the Euro.

Hazir, what don't you think the UK has done well?

And I don't care at all about our landmass, I do know the map of the entire world quite well, and certainly know what Britain looks like. But it's irrelevant, we're quite able to cope, and do.

And the figure of 40% of all European investment refers not to just this year, but consistently for the last 15 years. It's not a one-off stream, we're simply consistently first, and no-one is being scared off by our independence.

And how come we have a 0.75% difference!? You're not answering that. Far from being bashed into the same rate, we're consistently different. And we're always setting our own rates. There is no evidence we can't successfully set our own rates, in fact it's a fact that we do. Do you have any evidence to show that we're able to control ourselves?

[Hazir]

What makes you think the exact percentage is all that important Randblade to show your independent Randblade, you should be aware of the fact that at the same point in an economical cycle a 0.75% higher interestrate has negative results on the economy. The real independance is shown in the ability to set rates. When I see the BoE acting AGAINST a move by the ECB I will believe there is a real independence.

Even when the Netherlands central bank didn't show any tendency towards independent rate policies we still didn't have the same rates. Those different rates went up and down with the Bundesbankrates though.

[RandBlade]

And if we're going to do so badly be being independent, how come our economies doing quite fine as it is, while the German one is seriously facing recession. Herr Kuehbacher, head of the Bundesbank wanted a staggering 0.75% cut in the ECB rates. Cuts come in quarter of a percentage point normally, possibly with a second, he wanted a staggering 0.75% cut. Because Germany is seriously facing a recession. This is despite a low interest rate, and low exchange rates, two major macro factors that should make the country grow.

Our only concern is that we might be caught up in the German and potential American slow-down. But even if both the US and Germany went into recession, we could avoid it for ourselves, so much for no independence.

And if we had joined the Euro at the start, the results could have been very bad. We're doing very well economically, hence our rate, Germany is facing recession, hence the rate being 0.75% lower. If we had joined, we'd have been arguing to keep the rates up, the Germans would have wanted it lowered. As it is, Germany has barely been able to get the rates lowered at last, and if we were part of the ECB, it might not have lowered, and certainly not as much. This would have meant a worse slow down there. And the rates would have been lower than we needed, meaning we'd be having inflationary pressures. Germany needs a low rate, we need a normal higher one. Either way you'll hurt one if you have a single currency.

[Hazir]

Much more than a lower rate Germany needs to reform it's outdated labourlaws and the restrictions on the ownership of companies. The present credit crunch the Germans are facing is also forcing them into reforming their economy into one which will be more adjusted to a globalized economy. France already went through that painful process and with succes. At them moment the French economy is the real engine of the Eurozone economy.

As for unemployment figures, unemployment inside the Eurozone stands at 8.4%. Unemployment for the entire EU stands at 7.8%. So even though the eurozone countries are a bit behind, not by far.

Growth for the EMU for the first quarter of 2001 stands at 0.7%, for the entire EU at 0.6% , which in my humble opinion means that the EMU is doing better than the UK.

[RandBlade]

Originally posted by Hazir
What makes you think the exact percentage is all that important Randblade to show your independent Randblade, you should be aware of the fact that at the same point in an economical cycle a 0.75% higher interestrate has negative results on the economy. The real independance is shown in the ability to set rates. When I see the BoE acting AGAINST a move by the ECB I will believe there is a real independence.

Even when the Netherlands central bank didn't show any tendency towards independent rate policies we still didn't have the same rates. Those different rates went up and down with the Bundesbankrates though.


What!? Do you understand how big a difference 0.75% is? The difference between them is massive. We'd be facing terrible inflationary pressures right now if we didn't have the independent rate we set.

Is the ECB independent of the Fed? They normally have different rates, but changes will go in the same directions typically.

The rates, whether US, UK, EU/Germany, Australian or whatever will all typically follow the same path, simply because of the intertwining of all our different currencies through trade.

If Europe was to enter a recession, they'd require lower interest rates and ceteris paribus the UK would marginally lower, because of a loss of a trading partner. But although the direction is the same, the magnitude is not.

You'll rarely see the BoE and ECB change their rates in opposite directions, but that's not a lack of independence. You'll just as rarely see the BoE and Fed, or the ECB and Fed change in opposite directions.

But even in the mere 2 1/2 years of the Euro, when no nations yet had the effects of a recession (the outcome of the first will be a major factor to convice or deter me), but even in the short stable time we've had already we have seen big differences. Quite regularly one changes, and the other doesn't, or both do but with a different magnitudes.

You won't see a change in the opposite direction for quite a while, but have you gone in the opposite direction of the US? Or have we?

If we needed to, we can and would go in the opposite direction of the US or EU. And we have in the past gone against the US, or Germany. There's no reason the EU would be any different at all.

[Hazir]

Yes I know how big the difference is, and as a matter of fact the UK rate would be much better for the Netherlands than the present ECB rates which are creating an enormous pressure on our economy. Inflation on a year to year basis stands at 5% right now in the Netherlands and unemployment pretty much has been reduced to the point where only people who are unfit to work in jobs that require some sort of formation are still out of a job. Which also explains why the Netherlands want to open the EU jobmarket to Eastern Europeans as soon as possible.

Does this make us extremely happy about the ECB? Not really. It is a bit of a nuisance not to be able to set rates the way we would like them. A little bit higher would be nice for us because that way we could return to the days of stability and low inflation. Is it really bad for us? Well actually not, because as a part of this huge conglomerate we know we're not going to pay for the present overheating we would do as a separate country.

[RandBlade]

Germany and France seriously need to reform it's laws, you're right. But that's a long term solution. It took Thatcher and then Reagan the 80s to turn things around for the UK then the US. While it's been easier since for other nations, it takes time, and the willpower to make tough decisions needs to be there, and it's certainly lacking in France right now.

But regardless of whether or not they do those changes, Germany does need a cut now, and we don't. One way or the other, we have incompatible needs, and that's why our rate is different, and has been changed on different dates.

And if they are fundamentally flawed economies in certain aspects (which we seem to agree on) then is it really a good idea for us, who don't have those problems to be restricted to the same rate as them?

Joining the Euro means an almost absolute loss of rate control, staying out and we have it and are exercising it.

PS, all my latest replies have come after one of yours, but written after the one before (if you know what I mean). I've been writing my response, and by the time I've written it, you've replied to my previous, so I reply again and by the time I've written that, you're next is already up again.

[RandBlade]

It happened again. This reply should be quick enough so you don't have another in-between :)

[RandBlade]

So you're over-heating quite badly. You clearly need a higher rate, and you're not complaining? This isn't even 2 1/2 years into the Euro, and you're economy is already having massive over-heating effects because of such a low rate. If you weren't in the Euro, then the rate in the Netherlands would certainly (and rightly) be higher.

How are you not suffering. These effects of inflation are seriously bad, and are definitely going to get worse. You need the rates rising sharply, and Germany needs there's lowered. And I think it's more than likely the ECB will do as Germany needs and make your problems much worse, rather than the other way around. If you still had an independent bank, you're rates would be higher. You're economy would be in a much better shape.

Your nation is suffering because of this. High inflation is a major problem. A problem we were supposed to have dealt with ages ago. How are you suffering less through this enforced perioud of inflation, which can only get worse?

[Hazir]

Eh, but really, I don't think the debate about the euro is economical. I mean, it's nice and all to talk about the advantages or disadvantages. But the bottom line is, like I already said before, the decision to join the EMU is a political one. And a very scary political decision because it does mean you're getting into a Europe which is much more than just a customs union (which aside from some of the frills we still are) into a political union. And of course there is no way telling in which way that union will move once you're aboard.

[Hazir]

Originally posted by RandBlade
So you're over-heating quite badly. You clearly need a higher rate, and you're not complaining? This isn't even 2 1/2 years into the Euro, and you're economy is already having massive over-heating effects because of such a low rate. If you weren't in the Euro, then the rate in the Netherlands would certainly (and rightly) be higher.

How are you not suffering. These effects of inflation are seriously bad, and are definitely going to get worse. You need the rates rising sharply, and Germany needs there's lowered. And I think it's more than likely the ECB will do as Germany needs and make your problems much worse, rather than the other way around. If you still had an independent bank, you're rates would be higher. You're economy would be in a much better shape.

Your nation is suffering because of this. High inflation is a major problem. A problem we were supposed to have dealt with ages ago. How are you suffering less through this enforced perioud of inflation, which can only get worse?

Without the ECB we would be facing rates even lower than the ones set by the ECB right now (don't forget the lack of independence, we tried that once and learned the lesson). The overheating itself can be eased in an 'American' way by opening up our economy more to people from eastern Europe who would be quite happy to come and work here. If you remember a bit of the debate before the EMU came about, part of the critisism was that the EU workforce is much to sedentary. This period could in the end make people decide to pack up their stuff and find a job somewhere else. Like steelworkers from Wales who are looking for a job in IJmuiden (Corus) right now. It's a bit drastic, and painful, but in the end this can work out good.

[RandBlade]

You really need higher interest rates, why would you have lower without the ECB? And if the Netherlands is unable normally to set its own rates, then that logic doesn't transfer to Britain, as we are able to say we need higher rates and set them. You're getting bashed as it is, there's no reason why you can't set your rates higher if independent.

The decision to join the Euro is not just political, and its not just economic. Politically, I'd prefer if were in the Euro. The only reason for me that we shouldn't, is that one economic reason. You can't just ignore it, its a serious problem.

In the end, there's lots of advantages for joining, and only one for not. But that one which we've been debating is very important. It's a case of which is bigger, all the reasons for, or the one against? And that's something I'm not yet prepared to answer.

[Hazir]

Originally posted by RandBlade
You really need higher interest rates, why would you have lower without the ECB? And if the Netherlands is unable normally to set its own rates, then that logic doesn't transfer to Britain, as we are able to say we need higher rates and set them. You're getting bashed as it is, there's no reason why you can't set your rates higher if independent.

In the early eighties of the last century the Dutch central bank on the basis of economical data decided not to follow a move made by the Bundesbank. The move was logical and 'economically' sound. Still it was unexpected by financial markets, for the rest of the decade Holland has paid for this show of independence by a baserate that was 0.25% higher than the German baserate even though both countries had a virtual identical economical cycle. As you will understand that was in the long run negative for the dutch economy. Eh I see I forgot to answer your question, but the lesson we learned from that episode is, what you do is follow the Bundesbank, no matter what, the longterm damage of not doing that is bigger than any shortterm consideration. The Bundesbank probably would have lowered the rates much more than the ECB, and the dutch National Bank would have followed, within minutes.

The decision to join the Euro is not just political, and its not just economic. Politically, I'd prefer if were in the Euro. The only reason for me that we shouldn't, is that one economic reason. You can't just ignore it, its a serious problem.

Actually it's very easy to ignore it because it's a fake argument. The French wanted the euro to rein in the Germans, the smaller states wanted it to get some control back from Frankfurt, if only through a European Central Bank. I know in Britain they like to present it as an economical debate, but that's only to keep people from looking at the political sides of the debate.

In the end, there's lots of advantages for joining, and only one for not. But that one which we've been debating is very important. It's a case of which is bigger, all the reasons for, or the one against? And that's something I'm not yet prepared to answer.
The big advantage of joining would be that it makes clear that the UK is really going to be part of the European Union in stead of a country living under the illusion it became member of an economical customs union.

[RandBlade]

Hazir, I'm not following the economic side because of the journalism here. I'm going to be an economist, and there are going to be serious economical implications. Even if they weren't mentioned here, I'd look at them. And I've looked at everything independently, which is why I've been able to dismiss every argument the Tories use as skeptics. This argument I'm using is not a main argument in the press, instead it's a political debate mostly. But this is a serious economic concern, and should not be just shrugged off.

From what you said, the Netherlands never had an independent bank, and you've lost nothing by joining. You could have had an independent bank, the problem was that yo fell into the trap of always following the Germans, and the markets grew to expect it. You should never surprise the markets, the Dutch bank needed to show it was independent and didn't until it was too late. Ideally you could have had an independent rate, but that was thrown away before the Euro even arrived.

But Britain does have an independent rate, and anyone in the markets who only expected us to copy the ECB would certainly be a fool, no offense. There's a major difference between the UK and Netherlands, and the argument for one doesn't work for the other. As I said, it's only the importance of the lack of ability to set the rates thats crucial. Well for the Netherlands, its unimportant, so you're better in. For the UK however its different.

The economic effects of losing an active independent rate setting mechanism is not a fake argument, it's very important economically.

And making a statement like you said at the end is not one of the advantages IMO.

[Hazir]

I do see a difference between the UK and the Netherlands vs Germany, I don't see an equally big difference if I look at the UK-EMU relationship. I obviously don't see the same amount of independence you see for the BoE. There probably is some because the markets don't expect it to follow ECB too slavishly. But that's something different than having real independence. Because the markets do expect the UK to join in the end too, and will judge every move in that light. If a move is made that makes it more likely or thinkable that the UK will not join, the BoE will have an opportunity to test how independent it really is.

You put it the right way, the central bank of the Netherlands lost its independence to the expectations of the Markets, there is no reason why the BoE should be immune to the same. The UK's economy may be bigger, but not so big as to really impress the financial markets. Something we have already seen when the Pound was forced out of the ERM.

As for economical results of the EMU, of course they will be huge, no doubt about it. But effects and decisions do not necessarily have the relation they seem to have.

[RandBlade]

Decisions should take into account the effects, and its solely the effects that will make me decide how to vote in a referendum. If other nations didn't consider the economic effects of changing their currency, then that's there mistake.

The ERM was a bad idea economically. You should never interfere with a freely floating exchange rate (except sometimes in rare cases). Having one currency is different, but the ERM is economically bad, and that could've been said before it started. In the end, we chose to leave (we weren't forced) and it was a really good idea. Our economy improved rapidly once we gave up that foolishness.

The markets don't expect us to join. Its just a possibility, and I'm sure the markets are taking the rediculous but present 4:1 against into account as to how the results of a referendum would be.

We can afford to stay out. Britain is independent of the Fed, and there is no real difference between the Fed and the Euro. Saying Britain can't cope outside the Euro, is much less likely than saying Canada can't cope outside the US Dollar.

We are independent, that's why we've got such a big present difference between our rates and the ECB rates, and thats why we're financially in a really good position, instead of the very high inflation that you're being forced to have, and we would if we were with it as well.

[Hazir]

Hehe I just hear the SNP leader say that one of the advantages of an independent Scotland being member of the EMU would be that that way Scotland would have a say in the interest rates rather than have them set by the BoE at rates that are inappropriate for Scotland.

[The Man Who...]

Sweet Jesus you guys have been busy!! I go away for a few days..muttermuttermutter

Looks like I have a lot of catching up to do..although having 'scan' read some of the post here I think Im probably out of my depth here now..Im no economist just an interested citizen. It may be time to bow out gracefully,reach for the popcorn,and watch you two slug it out..:D

[RandBlade]

Originally posted by Hazir
Hehe I just hear the SNP leader say that one of the advantages of an independent Scotland being member of the EMU would be that that way Scotland would have a say in the interest rates rather than have them set by the BoE at rates that are inappropriate for Scotland.

The SNP :rolleyes:. They'll do anything anti-English to get an independent Scotland.

Of course the Scots would have more say as one small voice in 12, instead of just the UK :rolleyes:. Think about it, how much say would Scotland have in the Euro? And how much say does it have in Britain? Instead of just putting its voice against that of England, it would have to go against France, Germany, Netherland etc the notion that it would have more say when against all of Europe, instead of being the second nation of the UK is ludicrous.

That SNP propaganda is clearly foolish if you think about it. And by recognising anyway that the BoE rates are different to Euro ones, you accept my point about the BoE being independent.

[Hazir]

Originally posted by RandBlade
That SNP propaganda is clearly foolish if you think about it. And by recognising anyway that the BoE rates are different to Euro ones, you accept my point about the BoE being independent. [/B]
You're twisting my words again, the independence is only shown in the ability to follow or not follow policies set in Frankfurt (and Washington for that matter). The actual percentage is 'proscribed' by economic necessity.

[The Man Who...]

Originally posted by Hazir

You're twisting my words again, the independence is only shown in the ability to follow or not follow policies set in Frankfurt (and Washington for that matter). The actual percentage is 'proscribed' by economic necessity.

And that 'small' about of independence still remains my key reason for not wanting the UK to join the Euro,as at the moment our perscribed interest rate is what suits [b]us]/b] not what suits Europe as a whole.

[Hazir]

The Man Who,

Since you are a Conservative I will give you your reason for not wanting to join the EMU. Never mind about the economical mumbo jumbo we've been drivling about in this thread. A true blue Conservative should reject the EMU because membership is the first step towards a truly FEDERAL European Union. That and nothing else should be your prime consideration why you reject and will always reject the 'single currency'.

PS why do you people still call it 'single currency'? The name is 'euro'.

[RandBlade]

Hazir, don't tell us what are reasons are. I've told you, I'm mostly for a federal Europe. The only reason I'm against it is the economic problem. And it might be true for TMW as well, let him say what his reasons are. In fact, unless I'm mistaken, TMW said that the independence to set rates is one of his main concern.

I don't care about the political crap spun out by the ludicrous Conservatives. I'm concerned about the Economics, as joining a single currency does mean major changes to the economy. And to ignore those is absolute folly.

Yes, the interest rates are set by economic necessity. But our necessity, not the rest of Europes. If we were in the euro, then economic necessity for Europe means having rates a lot lower than what the economic necessity for Britain is. As witnessed by the big difference in rates.

You did say that the SNP would be better in the euro because it would "have a say in the interest rates rather than have them set by the BoE at rates that are inappropriate for Scotland", certainly showing that there is a difference in rates. Just like looking at the rates in any paper shows there is. But Scotland would be one small voice of 13, instead of 2nd largest of 4, which it has more say in should be obvious. That was just as much political nonsense, as the Conservatives spin trying to keep us out.

[The Man Who...]

Originally posted by Hazir
The Man Who,

Since you are a Conservative I will give you your reason for not wanting to join the EMU. Never mind about the economical mumbo jumbo we've been drivling about in this thread. A true blue Conservative should reject the EMU because membership is the first step towards a truly FEDERAL European Union. That and nothing else should be your prime consideration why you reject and will always reject the 'single currency'.

PS why do you people still call it 'single currency'? The name is 'euro'.


Your being just a little to hasty to judge there Hazir...
My politics certainly lean towards Conservatism,but with a small 'c'. Im far from 'true blue'. In fact I find some of our current policies disagreable. And I dont think William Haguecurrent leadership of the party is particularly sparkling either. I can indeed see advantages in a Federalised Europe,although personally I feel those advantages would end up being drowned in a sea of bureaucracy and inter-country discord. Call that rabid nationalism if you will,but thats not the way I see it.

Originally posted by RandBlade
Yes, the interest rates are set by economic necessity. But our necessity, not the rest of Europes. If we were in the euro, then economic necessity for Europe means having rates a lot lower than what the economic necessity for Britain is. As witnessed by the big difference in rates.



And this was the reason I initially gave for my reluctance in joining the Euro back when we started this Hazir. It has'nt changed. Well said RB..

[Hazir]

As a matter of fact I am a bit (more than a bit surprised) this thread seems to revolve around the 'independence of the BoE' to set rates. Has it got to do with the fact that the BoE got that independence only when Labour came into power? I would have expected a much more political debate when it comes to the EMU and EU.

Just an observation on my side by the way.

[The Man Who...]

Actually Hazir the first break came during Conservative power if memory serves, when we pulled out of the ERM. I cant remember the chancellors name at the time,before I took interest in politics Im afraid. Labour nthen continued this and allowed the BoE to continue to set the interest rate's for the UK.

[RandBlade]

The reason I'm not debating the politics, as I've said many times, is that politically I agree with you! Debates surrounding what people all agree on are fairly boring. If TMW wants thinks politically its bad, I'll debate with him.

The only reason for me is the independence Britain has and would lose if we joined the Euro, to set the rates. That's my only concern, and its a major one. Most modern macroeconomics relies on interest rates being correct for the nation. And it won't be if Britain joins. The damage could be very serious. This is a real economic threat, and not something that can be brushed aside flippantly. If it can be deemed a safe loss, then I'll immediately support membership of the euro, but its not that easy to dismiss something that can seriously stuff up your economy.

Yes, the BoE only gained independence in '97 (far too late), but before then British rates were independent from European rates. I'm not talking about independence from politicians, which is what was gained in '97, but independence to set rates on what Britain requires, not all of Europe requires. That we've always had, and that's what we'll lose.

And its a serious lose, and the only negative in the entire debate. Shame that there such a major problem, in an otherwise ideal situation. Actually there's a second, but I'm still looking into it.

[RandBlade]

Actually TMW, thats not entirely true, I'll try and explain, it will be another length post though, so it will take a while. Once again, my previous post was written after Hazir's but before TMW's.

[RandBlade]

As an aside: I'm supposed to be revising for my economics exams starting next week. This is an interesting way to revise. This post is written after my long, followed by tiny previous two posts, although I expect posts two be in-between by the end, they're not there now.

Interest rates serve a couple of purposes. The main is that by lowering them, borrowing and spending will increase, resulting in greater growth, less unemployment and higher prices (inflation). Go too far however and you have serious problems due to inflation, and the extra spending has no benefits, just creates further problems (just harder to explain to the layman;)). So a happy medium needs to be found.

This is what the central banks of each nation does/did. They decide a rate appropriate enough so that there will be the most sustainable growth without inflation. To high a rate, and you stunt the economy, preventing it from reaching its potential (in other words unemployment and less wealth). A too low rate will create inflation and other problems.

Its very important obviously that interest rates are of an appropriate level. In Britain, the government and treasury office always decided what an appropriate level is. Unfortunately of course politicians will always be tempted to lower rates inappropriately, causing problems, but pleasing people in the short term, so before elections are called rates would be cut. Long enough before so that its not too obviously a gimmick, but short enough before that its still remembered. Then of course long enough after so that its not straight after and obvious, the government (new or old) would raise them again, but damage would have been caused.

In 1997, the new Labour government made one of the bravest, and best decisions a government can make, and gave away the populist tool it can be, and made it thoroughly an economic tool, taking politics out of it. But always, it was set with Britains interests, at a rate economically right for Britain, just sometimes abused as a political tool.

When deciding rates for Britain, the BoE decides whether we need more growth or less inflation, and sets appropriate rates.

Now where the exchange rate, and the ERM comes into it, is the effects on an interest rate change, on the exchange rate. Obviously, if Britain cuts its rates, and Germany didn't (back in the ERM pre-Euro days) then borrowing would become relatively cheaper in Britain. More people would then move there borrowing from Germany to Britain, which would of course effect the exchange rate.

The ERM was an agreement to keep all interest rates within a band. This was a political agreement, and economically its foolish. If the exchange rate is changing seriously, its for a reason. One way to stop the exchange rate changing is to change the interest rates. This will damage the economy, but succeed in preventing a change in rates.

But the best thing to do, is let the exchange rates change, so not long after joining, we quit again. Its damaging and foolish for politicians to try and twist the markets, and our ministers realised it and gave up the folly.

But all along: before, during and after the ERM (not just after as was implied in your previous post), and before and after the BoE was seperated from politicians, in fact always, since monetarism started, our rates have been set based upon the question: does Britain need more growth or less inflation?

Move into a single currency, and the question becomes: does Europe need more growth or less inflation? Of course you have an immediate problem, what does Europe want? What Germany and England want can be different, and are. So how are the rates set. One has to be harmed, as one will have an unsuitable interest rate.

And either way, an inappropriate rate is a recipe for disaster.

[The Man Who...]

What can I say? Eloquent and accurate RB...I bow to your greater knowledge in the field. You should do well in your exams....:)

[RandBlade]

Thank you very much :)

Unfortunately International Economics is my strongest point, and the least important exams.

[Hazir]

Originally posted by RandBlade
....
Move into a single currency, and the question becomes: does Europe need more growth or less inflation? Of course you have an immediate problem, what does Europe want? What Germany and England want can be different, and are. So how are the rates set. One has to be harmed, as one will have an unsuitable interest rate.

And either way, an inappropriate rate is a recipe for disaster.
And this is the point where you touch the central point Randblade, of course you want an appropriate interest rate, there are two ways of achieving that for countries that are in need of a different interest rate. One is to have an independent policy (and a margin in which to pursue that) the other is a coordination which goes further than we see in the EU right now.

The US has an economy a little bit larger than that of the EU, and a diversity in economic situations which isn't much smaller than in the EU. And though there are some voices for the abolition of the FED altogether (effectively abolishing the US dollar) these people are hardly taken serious by any politician. The reason why a country the size of the US can live with one interest rate is because on a federal level it levels out the differences between the states.

Since you are right when you say that in the long run a wrong interest rate is very bad for a country you're underpinning my point; by giving up the freedom of setting their own interest rates the countries of the EMU have set themselves on a path that will force them to harmonise taxation and financial policies much more than any politician is willing to admit right now. It is the only way the EMU is going to survive.


One little point about the ERM, it was defined in bandwith for the currencies, not interest rates.

[RandBlade]

Once taxes etc are harmonised, then there will be a lot less need for seperate currencies.

But they're not at present. Are economies aren't harmonised. Taxes in Britain are very different to those on the continent, labour regulation a lot looser, loads of other differences. That's why we've consistently attracted 40% of all inward investment.

If the economies were harmonised, then I'd think that the negative effects of losing the interest rate would be a lot less. But they're not.

Whether you like it or not, our economies are not harmonised. They may be eventually, but certainly aren't now. And saying get in the euro now, then harmonise is a very risky and dangerous policy. Like starting a time bomb, and then trying to work out how to stop it in time.

We're not all harmonised like the US is. There's far too many differences, as witnessed by the fact the British economy is booming, the German economy is facing recession, and the Dutch economy is very inflationary, 3 our of 3 of the possible results, and only we're in the right place it seems. We're not all the same yet, it will take many years probably, so the effects of joining too early could be disastrous. It might not be, which is why I'm saying wait-and-see, but to ignore such a potentially catastrophic change is foolish.

You can't say get on the leaking boat, sail off, and try and patch it. That's the same as saying get diverse economies into just one currecy, just one interest rate, then harmonise. Removing the Fed would be foolish, the US is harmonised, the EU isn't. And may I say, most of what is proposed as harmonisation are bad suggestions.

Harmonisation for the sake of it is wrong. Instead of lowering their taxes etc to our competitive and successful rate, the French want to force the UK to raise taxes, increase labour regulation etc all in the name of harmonisation. That's all wrong, and something I hope Britain never accepts. We're in a point were we're successful, and the French want to pull us down, so that everything harmonised. If the rest of Europe reformed we'd all be harmonised, or if we turn our back on the reforms of the last 20 years we'd be harmonised. Which should it be?

The French won't accept the first, and we won't accept the second. That's why we're not harmonised already. You've said that France and Germany need to implement reforms, and you're totally right, but they're not willing to. And until they do, we won't be harmonised, and the problems of signing away control of interest rates to an unharmonised Europe will still be dangerous.

[Hazir]

Well Europe has for a very long time been the continent of the 'fait accomplit'. Meaning that very often the Council sets a goal and then makes it virtually impossible for itself and its successors to stray from the straight and narrow. That is how they forced the single market through and that is how they are going to force through a harmonized economy. It doesn't really matter too much which models we have right now because the result will be a compromise anyway.

Some Brits are affraid of the 'continental' vices, some continentals shiver at the thought of importing the harsh variety of capitalism they see in Britain. However true your economical arguments may be Randblade, if you follow them trough, it means you can't make any move at all. Which is exactly why I keep beating the same drum and say after Helmut Kohl: 'The European Union will be political, or not'.

And that is the decision the EMU members have made, they call it a monetary union, they had all sorts of 'economical' criteria for it. But in the end the only reason why they went ahead was that they wanted it. Because if they would really have thought the economic criteria were all that important, then Germany couldn't have been a member at all.

It's something you also see in Dreadnaught's article on the EU-army; they took base commodities to cooperate, but with the desire to never again start a war in Europe and to keep the continent safe for democracy. Those considerations in essence may be economical, they are generally not considered in the financial markets.

[RandBlade]

Well you keep putting it that its a political issue, so I'll sum up my views in two lines.

Do I ideally want a single currency? Yes.
Am I willing to accept a singly currency if it means economic harm? No.

I will only accept a single currency if it doesn't harm us economically. That's my level of political views on the issue. If you mean do we have such political aspirations towards Europe that we're willing to continue regardless of the economic consequences, then the answer is no.

My condition for joining the euro is that I must be sure that it won't be harmful for us. And personally, I won't judge this by any propaganda Hague, Blair or anyone else feeds me through the press. I have explained my problem - only one - that we will lose independence to set interest rates. This is a fact, how big a problem it is, is yet to be decided by anyone. Nottingham University (my uni) has a group of Economics post-grads and professors working, simply trying to work out how bad the effects will be, so that it can then be weighed against the advantages which are much easier to calculate.

I see no advantage in changing currencies if it means damage to the economy. If it leads to an advantage, or no change, then I'd accept it. In fact if it was shown to be slightly bad then I'd still accept it, but not if its really damaging, which it seriously has the potential to be.

And you have also acknowledged another problem with simply trying to get harmonisation. We're not willing to accept the weak laws on labour etc in many continental countries (I don't believe that the Netherlands is guilty of the same problems btw predominantly France) while those nations don't want to enact the harsh reforms we have. So how do we ever reach harmonisation. I don't want us to compromise. I don't want us to go back what we had and got rid off, and if that means never being harmonised, then that's a price we'll have to pay. But hopefully eventually the rest will be the same as us, and we can join, otherwise we're too different. Interestingly, our 'harsh variety of capitalism' is nothing compared to America, Dragon Marine call Britain full of 'bleeding heart liberals' not capitalist at all.

And I do know the history of Europe fully, and understand the reasons behind the ECSC, and all other suggestions in the last 53 years.

[Hazir]

RB I shall not quote you, but you say 'we don't want to change' but that is exactly what you will have to do if you're going to be a member of the EU.

I am not saying the choice is going to be an easy one, quite to the contrary, the choice is going to be hard, because it means risking to have to face legislation you wouldn't consider right now. Like we never wanted a non-vaccination policy for FMD and still find ourselves having one. It even means taking economical risks in the short term with interest rates. But it is exactly those risks that will force politicians that try to play the 'local card' back into line.

So in a way I understand it when people like Hague (who I think is a **** to say it in the nicest way I can think of) says Labour is squandering away British sovereignty with their desire to introduce the euro. Of course the most visible part is that you can no longer set your own interest rates. The REAL effects will cut much deeper than that though and limit the freedom of any future British government in fiscal and financial policies. Actually it's exactly this limit on the freedom of their own governments which makes the euro so attractive to the southern members of the EU.

Coming back to your argument, if you say the interest rate is enough reason to stay outside EMU, in the long run you are saying Britain will not be a member of the EU once it goes into its next stage which I think will be a decisive move towards a FEDERATION :D .

[The Man Who...]

Okay Hazir, here's your chance:

Post your reasons for believing that Europe needs to be Fedaralised and list the what you believe to be the major advantages,and what you think will loose out on if were not a part of it,and see if you can convince me. As Ive already stated Im not against a Federalised Europe in principal so its not as hard as you might imagine...my views regarding the Euro are broadly identical to RB's.

And yes Hague is a ****. And that's probably putting it mildly.:D But alas Blair is supercillious and Kennedy is a complete no hoper. Looks like I'll be voting 'Monster Raving Loony Party' at the election...:D

[Hazir]

Originally posted by The Man Who...
Okay Hazir, here's your chance:

Post your reasons for believing that Europe needs to be Fedaralised and list the what you believe to be the major advantages,and what you think will loose out on if were not a part of it,and see if you can convince me. As Ive already stated Im not against a Federalised Europe in principal so its not as hard as you might imagine...my views regarding the Euro are broadly identical to RB's.

And yes Hague is a ****. And that's probably putting it mildly.:D But alas Blair is supercillious and Kennedy is a complete no hoper. Looks like I'll be voting 'Monster Raving Loony Party' at the election...:D
Hmmm I think Randblade started a thread about a federal Europe 2 days ago.

Voting the 'Monster Raving Loony Party' sounds quite sensible to me :rolleyes: :D

[Hazir]

Hehe, this is a prime example of how ill informed people can be. Some people actually gave their debit cards with PIN to a guy who posed as a bank worker, who claimed their cards needed to be updated for the coming of the ? and that that also was the reason why they needed the PIN. Of course the victims found out pretty soon their cards were used to empty out their bank accounts.

[Hazir]

*lets see if we can stir this one up again*

[RandBlade]

Originally posted by Hazir
RB I shall not quote you, but you say 'we don't want to change' but that is exactly what you will have to do if you're going to be a member of the EU.
No its not. We've already implemented the tenents of the EU, and are part of that. The Euro isn't the EU. We are members of the EU, and many changes are acceptable. But if the changes are negative, then why do it? Change just for the sake of it isn't worth it.

But it is exactly those risks that will force politicians that try to play the 'local card' back into line.
What do you mean?

Actually it's exactly this limit on the freedom of their own governments which makes the euro so attractive to the southern members of the EU.
Perhaps it is. But we're not idiots. We manage are economy sensibly. Restricting the French and Germans is possibly good for them, as they're stuffing things up. We don't. There can only be a negative side to us losing the interest rate, there aren't any benefits.

if you say the interest rate is enough reason to stay outside EMU, in the long run you are saying Britain will not be a member of the EU once it goes into its next stage which I think will be a decisive move towards a FEDERATION :D .
Possibly, yes.

We'll join whatevers best for us. There's no point joining the euro, or a federation just for the hell of it. We left pointless change due to ideologies behind in the seventies. If there are enough advantages to outweigh the disadvantages we should join the euro, otherwise we shouldn't. What's wrong with that.

And so far you haven't provided any good reasons to convince me at all that there are enough good reasons to allay my fears over the loss of control.

And this does seem to me, to be just an ideological position for you. Well for me, and the rest of Britain, making serious decisions on ideology rather than advantages/disadvantages is pointless.

[Hazir]

Interesting and probably correct observation. It also explains why continental Europeans feel Brittain is a marginal country. For some reason the British people, and maybe even British politicians seem to believe the EU is about economics. If that seriously was and is their conviction there is only one way for the UK where the EU is concerned and that leads towards the exit.

By not joining the EMU has already made a first step towards that exit, because as the - momentarily - most federal pilar of the EU the weight of decisionmaking is shifting there, a place where the UK has no right to vote. And the more decisions are made excluding the UK the less likely it is that the UK can catch up while it's still looking into the details of the original plans.

Which shouldn't be a too big surprise because that has been the way the UK has done business with Europe for over 50 years now. Talking about 'doing what's best for us', staying aloof, then finally scrambling to make a deal that ALWAYS has turned out to be a lesser deal than what they could have had if they would have been in from the beginning.

[RandBlade]

Originally posted by Hazir
For some reason the British people, and maybe even British politicians seem to believe the EU is about economics.
We think thats one of the main things certainly. But we don't particularly want to join a federal union for the hell of it, only if there are advantages. Most of the public doesn't want a federal europe. We won't make judgments on blind idealism, thats foolishness.

If that seriously was and is their conviction there is only one way for the UK where the EU is concerned and that leads towards the exit.
No. We can stay in the EU. The EU isn't the euro. Its a free trade away, and other things.

And the more decisions are made excluding the UK the less likely it is that the UK can catch up while it's still looking into the details of the original plans.
Who's saying we want to 'catch up'? We still have veto rights on taxation and all other things. The only thing we are seperate from (rightly) is the ECB, ie setting european interest rates. As far as decisions on the future of europe, we still have full rights, so we're not marginalised at all.

Talking about 'doing what's best for us', staying aloof, then finally scrambling to make a deal that ALWAYS has turned out to be a lesser deal than what they could have had if they would have been in from the beginning.
Name one lesser deal we've been forced to accept.

[Hazir]

Well of course you can stay in the EU in its present state, just like Switzerland stayed in the EFTA. The veto of nations under the provisions of the treaty of Amsterdam can no longer be used to block the closer cooperation of the countries that want to progress towards a closer Union. So there is nothing that can stop the other countries of the EU to form a formal federation with the exclusion of the UK. Sort of make the 14 vs 1 situation the UK seems to like so much official. It can all be done.

And the more often the UK uses its veto, the more often other countries will go their own way. Till we reach the point where the EU has become an empty shell.

Foolish is to not acknowledge what club you became member of. Obviously you believe your country became a member of an economic union. The other members of the club know that isn't the case; the economic union is a means, not a goal in itself and no matter how hard you shout that there is just an economic union will not make it one. And frankly, a point which seems to be missed on the other side of the Channel, nobody is listening to the UK any longer either.

As for the lesser deal, I don't have to get specific there, the UK wasn't part of the making of the structure of the Common Market it became member of. Thus it had to accept it as it was.

[RandBlade]

Originally posted by Hazir
Well of course you can stay in the EU in its present state, just like Switzerland stayed in the EFTA. ... Sort of make the 14 vs 1 situation the UK seems to like so much official. It can all be done.
Well everyone would be happy then.

And the more often the UK uses its veto, the more often other countries will go their own way. Till we reach the point where the EU has become an empty shell.
No, the EU would remain an economic union, it would just stop changing.

the economic union is a means, not a goal in itself
No. For us, economic union is a goal. What's your aim, why?

nobody is listening to the UK any longer either.
Then how come at Nice we succeeding in blocking the scrapping of tax vetoes, which France and Germany wanted. That's just not true what you said.

As for the lesser deal, I don't have to get specific there, the UK wasn't part of the making of the structure of the Common Market it became member of. Thus it had to accept it as it was.
Why weren't we a member. The French president rejected our joining on one date. We joined early anyway, and have helped shape the Common Market, its nothing like what it was when we joined.

[Hazir]

Randblade I am writing this reply off line so I won't quote.

You mention the veto, very nice indeed that veto. It gives a country in the EU the possibilty to block the adoption of certain policies in the entire EU. Mind you I said entire EU. Since the ratification of the Treaty of Amsterdam that word is very important, because that treaty gives the other countries the right to proceed with forming closer union inside the framework of the EU amongst themselves and with the exclusion of the countries that don't want to join. A big change from the old situation in which you needed the consent of all members to even make progress with a few nations. Like was the case with the EMU where the UK got its opt-out in exchange for its consent of the other countries proceeding.

You must see that this makes the veto a much less powerful weapon than it used to be. If the UK doesn't want something, and the other countries do, then the other countries are free to go ahead and do whatever they want without heeding the UK on the matter anymore. The EMU alsready shows how it works, the minister of finance of the UK can still sit at the table at the Euro-X meetings but he's supposed not to speak and he doesn't have a vote. And it isn't even certain he will retain this privilege once the UK should decide not to join the EMU. Such sub-councils can and will come into existence more and more. Making the UK less of a partner every time it happens. And if the UK should have a desire to talk about such an issue it will always have to deal with the fact that it is dealing with a monolyth on the other side that is communicating a consensus and thus doesn't have room for real negotiations. And you think the UK isn't getting marginalised ? I wonder what the word means for you then.

As for the membership of the UK in the beginning of the history of the EU. It was the UK that decided to stay out because of its percieved 'more important ties' with the British Commonwealth. It was only after the UK's government started to see that maybe Europe would be more important to it that it tried to become a member of the EC. And it was then that France started it's attempts to block the entry of the UK. Something which couldn't have happened if the UK had been a member from the start.

At the start of the ECCS and the EC the founders expressed their desire to prevent war in Europe through the means of economical cooperation. Economic cooperation was just percieved to be the easiest way to a permanent peace. With the coming of the euro we saw politics taking preference over economics again; Germany wanted the GDR included in the EU, the DM-block countries traded that off for a single currency. The original idea behind it all is still very much alive as we can see in the ideas expressed last month by the German Chancellor about the future EU.

[Hazir]

Hey Randblade,

I am watching Newsnight right now and although I didn't see the entire program I think Tony Blair has started saying basically what I am saying here in this debate, stay out of the EMU and you risk your EU-membership.

[RandBlade]

Hazir, we're in the middle of a general election. Tories are on the attack regardings the euro, TB has to defend his policy of possible membership. What do you think he's going to say?

In otherwords, I don't trust that one bit, its just a bit of election propaganda from a Prime Minister on the defence regarding europe.

[Hazir]

But it still is funny he picked exactly this stance :) .

To me it shows that the real agenda - also of British politicians - isn't that economics-motivated at al. Too bad though for Hague he can't afford to sound a bit more intelligent and has to keep drumming the drum of 'Labour will squander the Pound', where it would sound much more intelligent if he could fes up now and say; 'the Conservatives want a step back on European integration'.

I really feel a bit sorry for him, in my eyes TB managed - again - to make the leader of the opposition look totally inadequate. So who do you think will be the next leader of the Conservative Party?

PS what's the deal with the BBC broadcasting Buffy in the middle of the night?

[RandBlade]

Hazir, I'm not making my mind up due to what a politician says. For me the only concern is economical. If you question Hague or Blair's motives, then fine, but I'm not hiding some sort of agenda from the public am I?

Portillo's going to presumably be made leader of the Conservatives after the election.

Buffy's shown late night (about 11 IIRC). This is partly because it's already been shown on Sky (when its 8) before it reaches the BBC, as well as it being a late night sort of show.

[Hazir]

Originally posted by RandBlade
Hazir, I'm not making my mind up due to what a politician says. For me the only concern is economical. If you question Hague or Blair's motives, then fine, but I'm not hiding some sort of agenda from the public am I?

I sure would hope you're not, still hope you don't believe politicians when they say economics rule their actions.

Portillo's going to presumably be made leader of the Conservatives after the election.

Really ? I'm surprised, I always thought he was too rightwing to bring the party back on track. So they are going for oblivion?

Buffy's shown late night (about 11 IIRC). This is partly because it's already been shown on Sky (when its 8) before it reaches the BBC, as well as it being a late night sort of show.
It's on around 1 AM

[RandBlade]

Originally posted by Hazir
I sure would hope you're not, still hope you don't believe politicians when they say economics rule their actions.
Possibly, probably not. But the only reason to stay out is the one I've provided, and you're no longer disputing.

Really ? I'm surprised, I always thought he was too rightwing to bring the party back on track. So they are going for oblivion?
Going for oblivion? They got there in '96, and things haven't changed. He's very right-wing, too much IMO, but not as right-wing as the rest of what remains of the party, believe it or not. It says something of this campaign that Hagie's not really even bothering with the swinging voters, at present its only Tory loyalist who're really being targetted by the Tories. This is going to be the biggest landslide re-election you'll ever see probably.

It's on around 1 AM
Don't forget you're an hour off, that was midnight for us. Its normally shown at 11 or 11:30, as its only repeats now, even for the BBC, they're letting the time vary a bit, delaying it to midnight last night. Besides, we were all watching the football earlier on (England 4, Mexico 0)

[Hazir]

Originally posted by RandBlade
[QUOTE]Possibly, probably not. But the only reason to stay out is the one I've provided, and you're no longer disputing.

That's not true, in the economic arena the setting of the interest rates makes sense, and would be a strong reason to stay out. Hell, it would even be a good reason to dissolve other monetary unions, like the USA. But, this isn't the economic arena, so the reason isn't real important.
... This is going to be the biggest landslide re-election you'll ever see probably.
You obviously aren't the only one who's thinking that.

Don't forget you're an hour off, ...
I took that into account for me it was closer to 2 am.

[Hazir]

Hey Randblade, what if the Blair II government asks you :

Do you agree with an end to the opt-out of the UK to the EMU treaty ?

Yes

No

What is your answer going to be (I am not interested in your reservations, just the answer)

PS some interesting reading material would be 'a case for the euro' by a group named 'Europe in Britain'.

[Hazir]

Hehe the Conservatives are becoming really pathethic with their attempts to make it seem as if entering the EMU would be the start of the apocalypse. Yesterday they tried to make the british people believe it would cost the UK 36 billion pounds to change over to the euro.

That caused me to have a look at the Dutch estimates. According to the Dutch minister of Finance the one-off costs will be at the most 1.9 billion pounds with estimated yearly savings to the Dutch economy of at least the same amount.

So lets say the UK economy is about 3 times the size of that of the Netherlands. That would mean roughly 6 billion change over costs. And you can be certain that companies have tried to inflate their costs in hope of tax rebates later on. Very funny again, the Conservatives must be real desperate.

[Hazir]

Hi Randblade, I hope you passed this morning. Now get ready to have your nose rubbed into something :D

I was reading the Times this afternoon and in it was an interview with a departing member of the MPC (forgot her name DeAnne something) who said on the matter of the euro, the positive and negative effects or joining are in balance. It's a political decision which the British people will have to decide on in a referendum. There you have it, from the horse's mouth so to say.

[RandBlade]

That's her view. And I'd like to know where she got that from.

My universities economics faculty has a leading team of professors, graduates etc researching what the economic effects will be. And the reason is that no-one yet knows the economic effects of losing control of the monetary policy. No-one knows what the effects are, its not something that people have researched much before, which is why there's so much research going into it now.

In other words I don't believe her.

[Hazir]

Eh you do know what MPC I am talking about right ? This lady served three years on the committee that sets the interest rates for the UK, she's not just some 'informed' lay. She knows better than you or I how the system really works.

She is also retiring from the public sector so she doesn't have any reason to keep the government happy.

[RandBlade]

Yeah, I do know what the MPC is. But her view totally clashes with that of university professors and researchers and many significant others (economists, analysts etc) across the country, who aren't lay either. As far as research goes I'd put my money on the researchers.

Of course I respect her opinion. But when everyone else in the know says we don't have enough information to judge yet, and she suddenly makes this statement (with no extra information) then I don't believe her. And many in the know have also said the opposite, I don't believe them either.

The most honest, apolitical opinion, that is taken by the vast majority of those who know is simply we can't tell yet. There's no way for us to tell in advance how serious or likely these potentially destructive problems could be.

Remember the extreme risk is to be locked in recession or to face hyper-inflation. Neither of those are anything we can potentially say. It may be possible to judge in a couple of years, or a dozen, we just have to for now wait, see and research (the one TB never mentions).

When nearly everyone's honestly saying we can't tell (not a good thing to normally say) and a retiring MPC member says 'economically its neutral' then I'd really like to know why when no-one else has been able to tell.

EDIT: And neutrals practically impossible anyway. If loss of interest is a problem it will be serious and we should stay out, if it isn't then joining will mean a 1%GDP gain. It would be neutral iff (not a typo) loss of interest was important but not very and meant a corresponding 1% loss, and if it is important how can we yet tell it will be restricted to 1%?

[Hazir]

The famous 'Europe a la Carte' idea that really isn't going to work. For every concession of the other memberstates you have to pay. There is no such thing as a free lunch in the international arena. So that 'time to research' isn't going to happen for free either, the longer the UK stays out the harder it will be to adjust to the EMU.

Then about 'hyperinflation' that is a remark I don't understand in the least. If there is one thing the EMU has an allergy against then it's high inflation, so much so that the current targets are set a bit on the low side. And even though the UK doesn't have the biggest economy in the EU, if the country would be a member the interest-rates set would take the UK interests into account too. And with the size of the UK's economy the weight of 'British interests' would actually be quite big.

Lionel Jospin basically said the same yesterday, Europe is first and formost a political project. I think you still think I am contradicting your 'economical' arguments. I am not, I am just telling you that in the real debate they don't count.

[RandBlade]

Hyperinflation for one member nation could be a problem. Put it this way, at present Britain is in an ideal position, middle of a boom. Germany is on the edge of recession. Germany needs low rates, we need high ones. If Britain was in then what would be the result. The German economy would face a worse situation, Britain would now be inflationary rather than ideal. Lets say the German situation gets worse, then we'd get more inflationary.

Europe as a whole would have low inflation, but Europe's not economically a whole. As can be clearly seen from the differences. At present France has 9% unemployment. Germany has 9% unemployment. Italy has 10% unemployment. Britain has 5% unemployment. Do you wonder why we don't trust Europe with our economy? We're very different.

For France its a political project alone. Did any of the British leaders accept that? Not even the Lib-Dems (who are the post pro European party) accept that.

For France it may be purely political. But thats the sort of attitude thats made France have double the unemployment rate that we do.

You can't address or dismiss the economic concerns. They're real. It may be for you that its political, but if there's problems then we'll stay out. I want us to join ideally. But if there's any serious problems I have no problem giving up my ideal for a realistic alternative.

Monetary union is economic. It's motivation is political, but its an economic change and a very serious one at that. Before we jump into the deep end, we just want to make sure if its safe. That's sensible planning.

If you think economic concerns aren't real, then why are we still out? We're out because of those concerns, and they're grave ones at that. Monetary union is an economic change for political reasons. For the rest of Europe they may ignore the real world. Economics is the real world.

You can't dismiss economic concerns as not a real part of the debate. The name economics is Greek for 'house-keeping' and that's a good translation for it. What are the economic concerns? Mass unemployment. Lower wages. Higher inflation. Less opportunities. Less wealth for all. Etc

How can you say lower wages, mass unemployment, higher prices aren't part of the real debate?

You can ignore them if you want, but thats your folly. In Britain mass unemployment, lower wages etc are important aspects that we're not prepared to ignore. They are part of the debate, and that's why we're still out right now.

What's this so-called 'real debate' thats so important that makes mass unemployment, lower wages etc unimportant.

[Hazir]

:( my reply is going to come in installments because I'm sick and tired of writing long replies and then have my PC freeze in the middle of my last sentence :(

Originally posted by RandBlade
Hyperinflation for one member nation could be a problem. Put it this way, at present Britain is in an ideal position, middle of a boom. Germany is on the edge of recession. Germany needs low rates, we need high ones. If Britain was in then what would be the result. The German economy would face a worse situation, Britain would now be inflationary rather than ideal. Lets say the German situation gets worse, then we'd get more inflationary.

Europe as a whole would have low inflation, but Europe's not economically a whole. As can be clearly seen from the differences. At present France has 9% unemployment. Germany has 9% unemployment. Italy has 10% unemployment. Britain has 5% unemployment. Do you wonder why we don't trust Europe with our economy? We're very different.

You blow this whole interest rate thing completely out of proportion. If your take on it would hold op then the BoE wouldn't have lowered this month, but rates should have gone up or remained the same in the UK. Besides that there is a tendency to stress that the UK is 'different' than the EMU. Recent studies show that actually the UK is getting more and more in the same cycle as the rest of the EU. There is actually a bigger difference between existing EMU members than between the EMU block and the UK. Convergence seems to be what is happening though. Which is only natural in a situation where 60% of your trade is with the rest of the EU.
And then, if it would really be lower rates that the UK needed, with a director in the board the British vote could have made a difference between lowering interest rates or keeping them where they were last time round.
Furthermore, how serious would you take a person pleading for the abolition of the FED and the Dollar in the USA. That country has an economy which is bigger than that of the Eurozone with regional differences which are much bigger than what we see in Europe. And for most of the time the FED and the Dollar have existed there wasn't a mechanism to even out the effects of the 'one size fits all' rate. All the arguments against the euro are arguments that could be made against the dollar.
For France its a political project alone. Did any of the British leaders accept that? Not even the Lib-Dems (who are the post pro European party) accept that.

For France it may be purely political. But thats the sort of attitude thats made France have double the unemployment rate that we do.

Has it ever occurred to you that there is a reason why Britain never gets its way in Europe even though it is one the three big member states? In all the years of its membership the UK never got any further than delaying progress where the other states wanted to move ahead. On the jobless rate in Britain, I wouldn't be too proud of that, incomes in the UK on average are lower than in Germany and France. A class of working poor only means you have a different system of distributing wealth.
You can't address or dismiss the economic concerns. They're real. It may be for you that its political, but if there's problems then we'll stay out. I want us to join ideally. But if there's any serious problems I have no problem giving up my ideal for a realistic alternative.

Monetary union is economic. It's motivation is political, but its an economic change and a very serious one at that. Before we jump into the deep end, we just want to make sure if its safe. That's sensible planning.

Actually I think I have dismissed the economical arguments several times already :D . And I will keep dismissing them because they are irrelevant for the kind of decision you are facing. That decision is about power, raw power and nothing else. It is about who is running the show in Europe and who isn't. And staying outside for 'economical reasons' is only trying to change the rules while the games has already started. It may win you a red card in the end.

If economic arguments would have been all that important there couldn't be an EMU in the first place. Still there is one and it's set to grow dramatically over the next few years. Besides which, if economical arguments were all that important, why is it that only under the Blair government a set of economic indicators were invented to decide if the right time to join had arrived ? The rest of Europe has been working towards an EMU ever since 1992 ample time to come up with models to calculate the effects. Nothing of the sort happened though untill you got a government that wants to take the UK in the EMU.

Economics simply are very good to prove you are right once you have made your decision.
If you think economic concerns aren't real, then why are we still out? We're out because of those concerns, and they're grave ones at that. Monetary union is an economic change for political reasons. For the rest of Europe they may ignore the real world. Economics is the real world.
The Thatcher and Major governments didn't like the way Europe was going. Which was towards a federal state, forcing governments to transfer powers to the federal level. They consistently have fought against this movement with all means at their disposal. It obviously did something with the British psyche which makes 'Europe' a touchy subject in British politics. There is not a single country in Europe where 'Europe' is such a hot topic. Which is very easy to observe; the German Chancellor and the French PM have no qualms about sharing their visions for Europe with the rest of the world. The British PM doesn't get any further than saying he wants to be at the centre of Europe. How much more bland can it get? Economic concerns have always taken the backseat to the real big issues in politics; power, power and power, the three Big P's.
You can't dismiss economic concerns as not a real part of the debate. The name economics is Greek for 'house-keeping' and that's a good translation for it. What are the economic concerns? Mass unemployment. Lower wages. Higher inflation. Less opportunities. Less wealth for all. Etc

How can you say lower wages, mass unemployment, higher prices aren't part of the real debate?

What is it you are trying to say ? That the UK will plunge into an abyss when it joins the EMU ? The EMU represents the second-biggest economy in the world and the majority of those countries are richer than the UK. They have done better than the UK over a long period and it is only quite recently that the UK is doing better. The difference in growth is still withing 0.5% of growth of GNP. The effect of the foot and mouth disease could be enough to wipe out your entire advantage. And now you are trying to paint this Conservative style picture of hyperinflation and mass unemployment for the UK when it joins the EMU ? That's a bit rich isn't it ?
You can ignore them if you want, but thats your folly. In Britain mass unemployment, lower wages etc are important aspects that we're not prepared to ignore. They are part of the debate, and that's why we're still out right now.

NO, it is your folly to not want to address he real issues. What the UK needs is a serious rethinking on where it wants to go with Europe. The UK needs to come up with ideas of its own for Europe in stead of always just reacting to plans made elsewhere. It is only then that the UK's interest will be really served.
What's this so-called 'real debate' thats so important that makes mass unemployment, lower wages etc unimportant.
The real debate is about, which Europe are we going to build?

[Hazir]

Hmmm interesting, I think it was during Newsnight (not certain I wasn't watching, just heard the sound) tonight, 11% of Brits think the UK should join the EMU now. 46% think the UK should join at some time in the future. That would mean a solid majority for the euro if the government can convince people it's thr right time to join. Surprising information.

[RandBlade]

The result to a euro survey depends upon the question you ask.

I saw a survey for the election in a paper today.

1 question: If there was a referendum to join Europe how would you vote (2:1 out)

another question: Do you think Britain should join Europe.
Majority said 'wait and see'.

The British public hasn't decided what they want yet. I have.

Will respond to your above post when I can.

[Hazir]

Hmmm like I said, it was something in the background, but they had been carefull to not reduce it to a simple yes/no question so that people who were undecided could express that too.

2/3 of Brits want out of Europe ? Wow, what can I say, I don't really think they know what they want at all. Because though you could debate if it's a good idea or not for Britain to join the EMU, not being in the EU would be a disaster. There is no reason whatsoever why Germany and France would appease a Britain outside of the EU. That would probably mean slapping tariffs on British exports to the EU, thus affecting 60% of foreign trade.

Hehe.. I start to rant now, stupidity of this magnitude boggles my mind.

[RandBlade]

Late night typo there. 2:1 don't want to join the euro right now if there was a referendum today.

11% want to now, 22% don't ever, 61% want to 'wait and see'.

Given the choice to leave Europe or not, only a tiny fraction want to

[Hazir]

What does it mean by the way that Labour wants to have Health Care spending up to the 'European Average' in 2006 if the economy remains strong?

Does that mean Britain is doing significantly worse than the rest of Europe in this field ?

[Hazir]

Ok since nobody is responding at the moment, some little tidbits about the topic(s)

1. The Independent newspaper claims that Tony Blair will start up a pro-euro campaign in september this year.

2. The Prime Minister of the Netherlands estimates that 'assuming a Labour victory will happen tomorrow, the United Kingdom will be a EMU-member within the next 4 years'.

3. He also positioned himself in the 'future of the Union' debate on the side of the leaders of government that want to reinforce the federal structure of Europe, with a directly chosen President of the Commission, more powers for the Commission, stopping short though of the full-flung federation Chancelor Schröder proposed last month.

PS : if you didn't see the cover of the Economist weekly yet you should; they took Tony Blair's face, with Margareth Thatcher's hair, with the caption VOTE CONSERVATIVE

[Hazir]

Well, I don't know if there's anyone else than I still interested in this thread, but on the odd chance one of you brit-type people still read this.

Is there anyone who still understands Blair's position on Europe ? After the demotion of Robin Cook I personally have given up on ever understanding what it is that he tries to achieve. Or does he really think the shortest line between two points is a very very wide circle?

[RandBlade]

Yeah I understand Blair's position (hopefully). He wants to join - if the time is right. Cook wants to join ASAP. Cook was pressuring to join regardless, and would start campaigning already. This would definitely make Blair lose credibility, as the time IS NOT yet right, as he and Brown have already said.

In fact, it is quite likely that there won't even be a referendum THIS parliament. Our economies are still quite divergent, and he might choose to wait for 4-5 years until after the NEXT election.

Starting campaigning now would be the shortest route in. But he doesn't want to join right now. He doesn't want to join on ideology. He wants to join when the time is right, this is probably in about 18 months that we'll have the referendum, but not yet. He's not taking either the shortest route, or the longest, but the correct one. Join when (if) its economically viable. Not yet though.

What does it mean by the way that Labour wants to have Health Care spending up to the 'European Average' in 2006 if the economy remains strong?

Does that mean Britain is doing significantly worse than the rest of Europe in this field ?
We spend less per capita on Health Care than ANY other nation in Europe. This does not mean we're doing worse in Health Care than anyone else, our money is better spent. But our Health Care could be better, and we'll be spending a lot more in this parliament. If we spend as much as the European average, then the NHS should be better than the average.

Its not a case of being worse, but simply we've chosen to spend less.

1. The Independent newspaper claims that Tony Blair will start up a pro-euro campaign in september this year.
Only if he thinks the timing is right, its becoming very unlikely now though.

2. The Prime Minister of the Netherlands estimates that 'assuming a Labour victory will happen tomorrow, the United Kingdom will be a EMU-member within the next 4 years'.
No.

This is how we'll join (Labour policy):
[list=1] Blair/Brown call for Treasury analysis in the next 2 years
Treasury analysis on the 'five tests'
If the tests are passed then a Cabinet decision
If thats met then bill through parliament etc
If thats passed then a referendum[/list=1]
3 and 4 are guaranteed if 2 is met. However its uncertain that the tests would be passed. At present they wouldn't, and with the economies as they are, its unlikely they will be in the near future.

Also, if Blair loses the attempt to join the euro, it will probably be the end of his and Brown's career. At present they have higher priorities. The priority at present is public services, its increasingly unlikely we'll even have a referendum in the near future. He's said the analysis will (positive or negative) be called for in the next two years. This is not just to gain credibility, if we go to an election half-way through the process (even if the referendums been yes) the Tories can fight on a campaign to save the pound. At present however Blair's priority is Public Services.

3. He also positioned himself in the 'future of the Union' debate on the side of the leaders of government that want to reinforce the federal structure of Europe, with a directly chosen President of the Commission, more powers for the Commission, stopping short though of the full-flung federation Chancelor Schröder proposed last month.
We don't want a federation, true. We want an enlarged EU (more members) but less powers for the EU. IE, remove the CAP etc. We want certain policies to be done by the EU, but only sensibly international ones. Eg, combatting drug trafficing etc.

French, German policies have been not received well here, especially the Frence ones. We rightly do not want much of what the French of Germans have suggested.

I bought that issue of the economist. Its the first time the economist has ever said to vote for the Labour party.

[Hazir]

You're joking right ? The German plan got a better reception than the French plan ? If that's so I really start to think there is such a thing as national schizophrenia. It was the German plan which aims at a full federation, the French plan was more inter-governmental. I always understood the British position to be inter-governmental rather than federal and now you tell me rejection of the French plan was stronger.

[RandBlade]

The point you don't seem to understand is the we look at everything in a plan. That includes for the euro, all the effects.

The French plan was more governmental in name only.

The French want uniform taxes (an absolute no)
The French want uniform labour rights (ie the same as they have in France)

The Germans want a federation (in name) but still have a large amount of those powers decided in the nation-states. The French want a federation of nation states (name only slightly different) but want uniformity in these rediculous areas.

Both plans were rejected even by the Lib-Dems here. Neither plan will be accepted here. But the French uniformity absolutely won't.

[Hazir]

That's interesting, how can you call a system in which there is a central government with a chosen leader and a fully functional parliamentary system 'federal in name' only ?

The difference between the French and German proposal is exactly the way I said it was. The Germans want a federal Europe, the French an intergovernmental, not a federal one. What you seem to mix up is the structure and the policies you should pursue inside that structure. Seems to bee a hardlived British disease, not understanding that a federation can choose between policies. I call that shortsightedness. You say you want to look at a proposal from all sides, but you always mix up the debate about the system and the choices inside that system.

Not that that should surprise any continental European, because for all it's well thought out policies the UK never came up with its own vision for Europe, only with resounding 'no's' to plans of the others.

Which brings me back to a point I have brought up before, and that is that in the end the UK is going to loose either way. Ecofin (with the UK) is slowly losing power to Euro-X (without Britain) and the UK will become more and more a powerless appendix of the EU.

PS. If you want to base your policies on keeping your options for chosing between the US and the EU open, you should keep in mind the choice for the US is non-existant.

[RandBlade]

Originally posted by Hazir
That's interesting, how can you call a system in which there is a central government with a chosen leader and a fully functional parliamentary system 'federal in name' only ?

The difference between the two was name only. Germans want a federation, the French a federation of nation states. The extra 'of nation states' is meaningless.

The difference between the French and German proposal is exactly the way I said it was. The Germans want a federal Europe, the French an intergovernmental, not a federal one.
No, the French DO want a federal government as well.

not understanding that a federation can choose between policies.
Under the French plan we couldn't. Under the French plan, we'd have a Europe-wide regulation on many more policies than even the German one. Europe-wide taxes, 'rights' etc are all not just policies, but constitutional transfers of power to Brussels.

I call that shortsightedness. You say you want to look at a proposal from all sides, but you always mix up the debate about the system and the choices inside that system.
Call it what you want. We don't want to transfer those powers to Brussels.

Not that that should surprise any continental European, because for all it's well thought out policies the UK never came up with its own vision for Europe, only with resounding 'no's' to plans of the others. Actually we have frequently said what we want. Just in the proper places, such as our successful negotiations in Nice. We don't make improper announcements about the future of the EU as a federation, we do however state clearly what we want, and say no to what we want. And then make agreements with the rest. All the French and Germans have done is publicity stunts.

Which brings me back to a point I have brought up before, and that is that in the end the UK is going to loose either way. Ecofin (with the UK) is slowly losing power to Euro-X (without Britain) and the UK will become more and more a powerless appendix of the EU.
Why? What power?

We've lost absolutely nothing from staying out of the euro, we haven't lost power in negotiations, and we haven't lost our interest rates.

PS. If you want to base your policies on keeping your options for chosing between the US and the EU open, you should keep in mind the choice for the US is non-existant. [/B]
Have I ever said that nonsense?

And it was the Irish, not us that rejected Nice. Funny that we're losing power, we got what we wanted in the negotiations, they couldn't even accept it.

[Hazir]

I suggest you read the articles about Cooks former aide before you say the UK isn't losing power in Europe.

You repeat over and over again, 'we' only want Europe where it's good for our interest'. Europe is a game of giving and taking, exclusively serving your own best interest is impossible in a European context. Unless you are willing to compromise you can't really be in it. Which is shown by the British position. The 'vision' for Europe that Brittain is offering is referring to a station that the EU has passed over 9 years ago, it is not talking about the EU that exists now and needs a better and more democratic structure.

Transfer to the EU is by the way not what we are talking about in continental Europe, what we are talking about is preventing transferring powers and through that losing democratic control over those powers. Something we can only prevent by making the EU a full federation with full legislative powers. That is not transferring powers, that is making certain the people elect their rulers, and not government officials who subsequently hide behind the people they have appointed.

Then I see you addressed the Nice Treaty question inhere too. 50% of 35% of the Irish Electorate rejected the Nice Treaty. Which in my book means that little over 1 in 7 Irish voters is Eurosceptic. And since the Nice Treaty was the lowest common denominator anyway I don't see how its rejection could do much harm at all. Besides which, there are easy ways around this type of situation as the rejection of the Maastricht Treaty by the Danes has already showed. Next time when they have a vote just a little number of extra voters have to show up to overturn the decision. And there will be more voters because people will understand the stake is higher.

Even the way this treaty was presented in the media only showed people had no idea what it was about. The treaty wasn't about the enlargement, but about reforming european institutions.

[Hazir]

And according to this article the Danish government wants to get rid of the 'privileges' it gained too :D


Financial Times; Jun 13, 2001
By CLARE MACCARTHY

The Danish government yesterday began reshaping Denmark's relationship with the European Union by declaring that its opt-outs from the
euro and other key areas of EU co-operation were damaging the country.

"Crisis management, immigration policy and currency and judicial co-operation are all areas of special Danish interest. The opt-outs limit our ability to safeguard these interests," the government said in a white paper on Denmark's role in the EU.

Denmark's four EU opt-outs were an emergency response to the electorate's rejection of the Maastricht treaty in a 1992 referendum.

Their existence permitted Denmark to ratify the treaty following a second referendum and allowed other EU states to proceed with the single currency.

The opt-outs have since attained a status close to holy writ in Denmark and attempts to remove them, such as last September's referendum on the
euro, failed.

Although many Danes cherish their opt-outs as a bulwark against the expansion of EU power, the government now regards them as a blemish on the country's reputation abroad.

"The opt-outs can contribute to a picture of Denmark as amember state that doesn't participate wholeheartedly in the process of EU co-operation," the government said yesterday.

Anders Fogh Rasmussen, leader of the opposition Liberal Party and a confirmed Europhile, agreed that the opt-outs were damaging but he also criticised the government's white paper as defensive and unimaginative.

However, the consensus in Copenhagen yesterday was that the new government document was the opening shot in what is likely to be a long-running EU debate which could ultimately lead to the dismantling of the opt-outs.

[Hazir]

Just another little tidbit:

There are 8 coins in the denominational system for the euro. Each coin has a european face with the value and a 'national' side with national symbols which are different for all 12 member states. American could compare this to the 'state-quarters' that were introduced a year or two ago.

I was thinking for quite a while that that meant we would have 8 * 12 = 96 different coins, but today I learned I am sadly mistaken. From january 1st next year, there will be at least 234 different kinds of coins brought in circulation en estimate of the highest number would be 268.

Reasons for this :

a. there are actually more countries introducing the euro than the 12 countries that are members of the EMU, some mini-states like the Vatican, San Marino and Monaco will get their own coins.

b. only countries that don't have their monarch on their side have minted coins for 2002 only, the monarchies have minted coins with the actual year of minting them on them to avoid having coins with kings that were dead by the date of 'issue'.

c. Germany has 5 national mints that all have their own lettercode, thus effectively raising the number of German coins alone to 60

d. In some countries, the mint master has a personal symbol added to the coins that were minted while he was in office, every time the mint master changes the coins change too.

Something tells me this system of nationally recognizable coins isn't going to last very long.

[Dragon Revisited]

As an outsider new to this thread I find the entire discussion absolutely fascinating, especially in regard to England.

Here's the impression I get on the entire EU issue. The European nations are traditionally the "center of the world," but that has obviously changed over the last hundred years. Please don't assume I'm saying the U.S. is the center of the world, I'm not. I'm saying the world has no center today like it had one or two hundred years ago. Communication and trade has opened the world up, and the European nations are now beginning to suffer from the stark realization that by themselves they are simply small nations in a large world.

Enter the EU. This seems a necessary step to maintain their voice and power. The introduction of it was a smart step in recognizing this. But when it gets down to politics, everyone wants the benefits of a union and not the drawbacks. You can't bring together a group like that without making concessions. England surprises me the most. But maybe they still have their history echoing in their heads rather than seeing what's happening in the world right now. If they don't get in they're going to find themselves an isolated little island off the coast of the EU with virtually no power at all. They're trying to bargain as if they are a major power. If I'm sitting in Germany or France I would probably care less what the English think, their days of wielding the sword are long gone.

They're the kid on the playground who used to have the only ball in the neighborhood. Now everyone has a ball but the kid is still trying to sway people his way because he's been doing it for so long.

[Hazir]

That is the way the UK's position is actually viewed on the continent Dragon Revisited. It's as if they are trying to play cricket where all the others are busy with a game of soccer.

There are people who are very strongly against the EU because it would infringe on UK sovereignty (what sovereignty?), and who think the UK should become a member of NAFTA. Sometimes they even go as far as saying the UK could do that without leaving the EU. Which is a load of rubbish so big I have no dimensions for it neither in metric nor imperial.

The 'small country' thing is true by the way. Even though at the time when the first step towards the EU was made globalisation wasn't the strongest motivator at the beginning. It was the threath to Western Europe coming from the USSR.

[Dragon Revisited]

Current world economics definitely demands something like the EU simply to keep the individual countries stable and viable in the marketplace.

If Bill Gates became ruler of China he could economically take over the entire world with the untapped resources that country has available both natural and human.

Imagine the exports any individual European nation lives off of ... China could flood the market with that product and totally bankrupt them. Not even a union like the U.S. could compete against the cheap labor available in China.

Within just a couple years he'd have more than enough money to start building a new Microsoft campus on Mars. :D

[Hazir]

Just to keep this thread alive :D

23-06-01 Frankfurter Allgemeneine Zeitung said in an editorial that however much it may be popular with British voters to separate the euro from Europe, that is an approach which will not be accepted in Berlin or Paris. Untill the UK decides to become a member of the EMU it will be unable to excert influence in accordance with its size.

2-06-01 Belgian Prime Minister Verhofstadt said in a speech made in Austria that Europe needs stronger federal institutions for the tasks it has been given by the member states. On the euro he said that it needs closer economical coordination of government policies. 'There are countries without a currency, but there aren't currencies without a country'.

It really seems as if Europe is starting to get used to the idea that the UK will not become a member of the EMU and continental leaders are moving on with the project without thinking about collateral damage in Whitehall any longer.

A British pro-euro site http://www.yes-campaign.com/site/home isn't exactly flooded with visitors since its launch 4 days ago.

[Dragon Revisited]

So is England going to wait until the value of the pound takes a nosedive and then ask to join?

And if they do, will the others take them? ;)

[Hazir]

The situation in the UK seems to be that the ministry of finance is in the hands of Brown, who says he's pro-euro but whose every action seems to be geared towards making British entry impossible.

He stacks condition on condition and now it seems almost certain that he will block the evaluation of the feasability until at least 2 years after now. And it is generally thought that there is no way Labour could afford a referendum in the middle of this parliament. Which means there probably won't be a referendum this parliament at all. So that again means that the UK couldn't become a member before 2007 or so. And of course there is no way of telling what the situation will be at that time. It is very likely Britain will find itself in a situation not very much unlike the situation of countries that want to become members of the EU right now. They will be facing a 'take it or leave it' deal, in any case a much worse deal than they would get with early entry. This of course due to the fact that for all intent and purposes the EMU is still starting up and finding out about the best structures, so the UK could excert some influence over the way it is run. In 2007 it exists for 8 years already and by then it is unlikely they will reform anything at all for the Brits.

I must say I am surprised at how weak Tony Blair turns out to be. In private he seems to be all for taking the UK into the EMU as soon as possible. But he doesn't have the stomach to confront Brown.

It probably will turn into a situation similar to that between the USA and Canada. You can use the USD everywhere but the Can$ only north of the border. What will happen to the exchangerate is hard to predict, all you can say is that the volumes in Pounds will be relative to the Dollar and euro so small that you can see enormous changes in very short periods.

To give you an idea : CNBC only mentions the exchange rate for sterling in the news-sections, never in the forex segment. That is reserved for Dollar, Yen and euro.

[Hazir]

http://www.yes-campaign.com/images/yes-campaign2.gif

[Hazir]

From Handelsblatt.com this quote, that in my eyes means we are getting closer to a federal state, with full powers, either through the EU or EMU. I think this piece will make certain Brits (the eurosceptics and the wet blankets in government alike very nervous).

HB/jrr DÜSSELDORF. The debate about the EU's future role in economic and fiscal policy is heating up and an argument over the proposed economic government is set to follow the debate on tax harmonization. Brigitte Sauzay, German Chancellor Gerhard Schröder's advisor on Franco-German affairs, spoke out to Handelsblatt in support of a form of "economic government", as suggested by French Prime Minister Lionel Jospin in May this year.

Jospin's proposal formed part of an address in which the French premier spelled out his long-term vision of Europe. In it, he rejected the model of a federation with a central government that some leading German politicians have backed, and threw his support behind a less ambitious "federation of nation states." But just one week after the Franco-German summit in Mainz, it seems that France and Germany have grown closer on the issue.

"If we have a common currency for Europe, this creates the possibility of making practices such as tax dumping impossible," Sauzay told Handelsblatt. "That's why we need some kind of common economic government ? whatever we choose to call it." Schröder's advisor indicated that the German government is in favor of closer coordination of economic and fiscal policy and stated that there is little difference between thinking on the issue in Berlin and that in Paris.

[Hazir]

I know that one day Randblade will come back and read all of this thread. :D

According to the polls in the UK you see a funny phenomenon.

When you ask brits if they are for or against the euro, 70% say they are against.

But when you ask them how they would vote in a referendum on the euro, only 30% say they would vote against.

Somehow it seems the no-campaign won't be fighting an easy battle once a referendum is called. I hope Blair finally comes off the fence and acts on Europe.

[RandBlade]

We will only join when the conditions are right. They're not right now, and won't be probably for a few years. Blair has a self-imposed dead-line of 2 years to ask for an assessment. If by then the conditions aren't right (and I don't see how they could be) then we'll wait until the next parliament (were hopefully it'll be between Blair and Clarke).

Haven't read the new stuff, just thought I'd update you on the situation here. (I believe that Brown has recently said that the test would be failed if called today effectively bannishing it to the next parliament)

I don't expect a referendum this parliament.

[Hazir]

I was in shock to see somebody else than I had posted in this thread. :D

Guess you're right about the referendum not coming soon Randblade. But I don't think you're necessarily right on the 'we join when the conditions are right for us'. I see a situation emerging where in a couple of years the UK simply isn't welcome any longer.

[Dragon Revisited]

Randblade is somewhat correct on the "when the conditions are right" slant. But I don't think England will ever consider the conditions to be right until it's too late and they have to join or find themselves financially isolated from the rest of Europe.

As far as independent European nations, England still has some clout (although an increasingly shrinking clout) but as the Union grows that clout will vanish. They should be selling their souls to be the first in all aspects of the EU to maintain a credible voice.

Just my opinion ... but of course I think the U.S. should dump California and Texas, then declare war on them and nuke them into oblivion, so obviously I don't necessarily have a "level-headed" opinion. ;)

[Hazir]

Eh, the problem is that there is no way of telling when the conditions are right and then act on it. By the time you have established something as complex as 'the right conditions' being there, the world has moved on again. If things were that easy Alan Greenspan would be out of a job tomorrow. We pay politicians and officials to try to look ahead and make the right decisions. When they read their job description as 'wait for the public to make up its mind' we might as well do away with them altogether.

And you are right DR, the rest of the Union is not going to bide its time just for the UK to make up its mind. Part of this process is in the inertia. We need further Union because the reality has changed again, as it is always changing. First we had a deal on Steel and Coal, now we have a currency, and the real government will come about. Wouldn't surprise me if 8 years from now we have the first presidential election.

This whole attitude is a bit like as if NY had decided in 1776 to tell the other founding states, that it would join the United States 'when conditions were right'.

[Dragon Revisited]

So ... the best bet for the EU would be if England was accidentally nuked off the planet during a training exercise? ;)

[Hazir]

Originally posted by Dragon Revisited
So ... the best bet for the EU would be if England was accidentally nuked off the planet during a training exercise? ;)
Yep with an easterly wind preferably.

[Dragon Revisited]

Originally posted by Hazir
Yep with an easterly wind preferably.
That would be best. Residual radiation would hit the Northeast U.S. ... no big loss there, everything's named after British cities anyway. :D

[Dragon Revisited]

"Question Time" tonight was quite entertaining. I love British politics. Seems now that the elections are over the conservatives are coming out more vocally against the EU and the Euro as an issue of protecting British sovereignty, while some in the audience claimed there are valid economic reasons not to join rather than the political flag-waving the conservatives seem to be hiding behind.

Sounds like they might vote to bring back hanging. ;)

[Hazir]

Yes it was quite entertaining, did you notice how much more Ken Clarke got applauded? I was a bit surprised his support isn't that big after all. The media had been telling me for week he was the favorite and then all of a sudden there was this poll where the two right-wingers were front runners.

[Dragon Revisited]

I loved the way some audience members took open jabs at him as if he wasn't there. Hilarious! You just don't see enough of that in televised U.S. political debates.

[Hazir]

You get to see Question time on a regular basis ? I can if I want to because I recieve both BBC's. But usually it's about boring internal stuff. Some mother venting anger at Tony Blair about her sick baby. Somehow those emotional outbursts don't really impress me. What do these people want? That they get preferential treatment just because they managed to vent their anger in front of a camera? What galls me is that they probably will get it for exactly that reason.

[Dragon Revisited]

I get "Question Time" on the CSPAN network. They usually show sessions of Congress and the Senate but throw in politics from other countries. I don't get to watch it all the time, but when I happen upon it I usually stop and watch. It's kind of like watching a car accident. Like a political Jerry Springer.

[Hazir]

I know what you mean :) ever get that sort of program from other countries, or only from English speaking countries ?

[Hazir]

Hey Randblade,

Did you read the outlook of the Item Club on the UK economy? Looks like they see you slipping back behind Germany this year already if the BoE doesn't do something radical about the overvaluation of Sterling.

[RandBlade]

No I haven't read that report, could you send me a link to it?

I'm trying to find my notes I collected while away to show you still sorry.

[Hazir]

http://www.ey.com/GLOBAL/gcr.nsf/UK/Economic_Outlook_-_ITEM_Club_-_Latest_UK_Forecast

What it boils down to is that they say the BoE has to act to lower the value of sterling.

[RandBlade]

We are suffering problems because of euro's collapse, that's true. Still reading it.

I can't see anywhere where it says we'll be worse than Germany. Can you point that out?

And I've long expected a change in the euro at the end of the year, because of the introduction of it as a real currecny, I expect it to rise a bit (I'm considering converting what I can of my student loan into euros in November and back to pounds in Feb)

[Hazir]

Hmmm it's not in this report they say they think growth in the UK this year will be 1.8% as opposed to OECD prognoses of 1.9% growth in Germany. Not much, but still, the claim has been consistently - I'm not just talking about you - that the UK was doing much better.

Anyway, the more I look at the UK government's way of handling this whole affair I feel more and more they are totally dishonest about it. I mean, if you believe them on their word about waiting for the time to be right etc. Then still it doesn't make much sense they avoid the topic alltogether.

If they wanted to be serious about a referendum it wouldn't hurt their long term objective in the least if they tried to at least do something to counter some of the anti-euro rhetoric. Still all they do is giving off signs that they are delaying the matter more and more.

It's like a soccer game where one of the teams says it has set its mind set on winning, but still refuses to get on to the pitch.

[RandBlade]

My view is not that because of Labour. My view is simply mine. Its also the view of (almost) all the other europhiles in the UK.

The government is being sensible (for once) by not doing anything. Frankly most people don't think it should be a political issue. The government is making it an economic issue. And as such, if the government was supporting it, it would take that away and make it a party-political issue. That is in nobodies interests.

There will be a big and successful campaign when the economists give the green light. Despite the Tories spending the last four years with their 'save the pound' nonsense, the view of the British public is actually to say yes, when the times right.

At present we will win the referendum at the right time. If they were doing any more then they are now, it would become a party-political issue, and that would not be in anyone's interests. And if they supporting an early entry or making too much noise now, they'd lose credibility.

By being silent, they keep their credibility, despite the fact that if we were in now, we'd be suffering because of it. I think not only would they lose credibility, but the truth is that it would be damaging now because of inflation, and independent people would be saying that, hardening the soft dislike we have. If we're patient, those people would be supporting it.

Using your football analogy, its a case of my pro-euro team has our best players injured now, while the opposition is at full strength. We're waiting until we're back to full strength (at which time one of their players will have his leg broken).

Or better, normally one player (Mr Economy) would be a good player for us, but at present it'd most likely be scoring an own-goal, but will be back to full strength in the future.

[Hazir]

Come on, try to read what I write. What I am saying is that this government claims to be pro-euro and wants to enter the EMU 'at the right time'. At the same time they leave the whole debate to be a one-sided show by rabiate euro-haters. Which is already showing its results in the way the general public sees the euro. They don't have to push for a referendum to at least counter some of the idiotic claims the antis have managed to turn into 'generally accepted truth' about the euro.

Keeping your mouth shut is the most certain way to loose any debate.

[Hazir]

I wonder if we had a vote on UK membership on the continent. Probably there would be a majority against.

[Hazir]

www.independent.co.uk today
So that's clear then: or as clear as this Government gets. On the informal authority of the Treasury's chief economic adviser, Ed Balls, we now know that the UK is highly unlikely to be in the euro zone any time soon.

We know this because among the ranks of Whitehall advisers, Mr Balls is very special indeed. On paper, he is a civil servant, but in real life he is the only conduit through whom we have a cat in hell's chance of finding out what the Government's intentions are on the biggest question it faces.

What Mr Balls was really saying when he told the party's intelligence that New Labour should not involve itself in any activity that might be divisive or undermine its reputation for stability was this: Britain will not enter the single currency until Mr and Mrs Brown and the Brownling are safely ensconced in No 10. If then.

Fine by me and others who have always taken the view that the benefits of the single currency are unproven and that we should look at it for rather a long time before we leap. But it is an affront that we should have to rely for this intelligence on someone speaking at a party gathering, inadvertently relayed (through the pages of your soaraway Independent, as it happens) into the public domain.

In fact, Radio Balls has been broadcasting a similar message privately for some time with the intention that sooner or later, the truth would leak out.

The Chancellor should now come clean on the euro. If he wants to rule out participation for one term, then let him say so and face a debate about it. The illusion that the Treasury is subjecting the project to unsparing scrutiny is exploded by Mr Ball's free and frank assertion that New Labour should avoid any move which could benefit the Tories and destroy the Chancellor's – sorry, the Government's – reputation for delivering a stable economic climate.

If Mr Brown can't bring himself to tell it straight, then we could always ask the Prime Minister what he thinks. Tony Blair was last seen launching himself on a euro-friendly crusade, telling us that it was "good for jobs" and fretting that the eurosceptic press was having its wicked way with the argument.

So, has Mr Blair mellowed out and does he now consider that the pound is worth keeping and that the jobs won't melt away if we stay out? Or has Mr Brown simply refused to back Mr Blair in calling for a referendum in this parliamentary term? Or is there a sulky stand-off and a mighty clash looming between the two New Labour titans to make the Conservatives' infighting seem like the love parade?

The famous five tests are a sham. They always were, to the extent that it was always in Mr Brown's gift to decide when they should be applied. All he has to do to stay out of the euro is not invoke the tests. That was the simple, brilliant, self-preserving strategy dreamt up by Mr Balls on Mr Brown's behalf at the beginning of the first term and very useful it has been in hiding the strains, indecisions and contradictions in the Government's position. The only difference is that the inventor of the tests now effectively concedes they are a sham too.

What an inverted world now opens up before us. The Conservative leadership is being fought over by a dogged eurosceptic and a keen europhile. If Iain Duncan Smith triumphs, then both parties will be united in a "no" position and the only thing left for them to quarrel about will be the duration of that "no".

If Ken Clarke wins, we will shortly be faced with a disconcerting switch in each party's euro roles. The Conservative leader will be the voice most widely associated with demands to take Britain into the euro. The Government will be resisting this pressure. But only if Mr Clarke finds a way out of a permanent clash with the sensibilities of his own party. To do this, he would need to embrace what his supporters grandly call a "self-denying ordinance" on the euro. There's just one flaw with this: Ken is not your man for self-denying anything.

Sooner or later, though, we will remember that the Conservatives are not the main plot, even if they have provided a wantonly diverting side-show in the past few weeks. New Labour has not yet realised that the focus of attention and criticism will return sharply to it once the Tory party unfaithful have made their choice. Normal service will be resumed and Mr Blair will feel vulnerable again .

The Prime Minister is aware that his political epitaph is already being written and that it reads "Is that all there is?". He is sensitive to the charge that he presiding over a government which is regarded as moderately competent and incrementally modernising, but which will leave few solid monuments in its wake beyond the reform of the Lords and devolution. Euro entry would fill that gap in his reputation.

It would be a shift entirely congruent with Mr Blair's single greatest political asset – his capacity to engage with and instrumentalise change to the benefit of New Labour. It would wipe out any other mutterings about promises unfulfilled and scotch the charges of superficiality laid at his door.

When the full inside story of this Government comes to be written, I am convinced that this was the way Mr Blair reasoned to himself when, at the beginning of this year, he warmed up his euro rhetoric and voluntarily picked a fight with the press about it. Something has happened since. Mr Brown (for let us assume that he is that something), has managed to engineer a change in the way his party thinks about the euro. Suddenly, no one is in favour of entry for the foreseeable future. To be a passionate proponent is now considered just as odd as it was to be against entry in Mr Blair's first term.

These are transient fashions in New Labour. Very few of the main players have a strong view on the matter at all. Most New Labourites regard it simply a matter of positioning and the useful position to be in just now is the "no-for-now" camp. Rampant agnosticism means that personal political advancement tends to place an inordinately large role in determining what senior figures think. Conversions tend to be swift, unpredictable and short-lived. Stephen Byers, to name but one prototypical figure, started out as a mild sceptic, became full-strength pro-entry at DTI and is now in a shoulder-shrugging mood about it all.

It is all endlessly contingent, endlessly shifting: a recipe for deferring tension inside the Government, not dissipating it. As long as both Mr Blair and his Chancellor are happy to live in euro-limbo, each for their own purposes, then this poses no grave problem. Mr Brown has clearly calculated where his interests lie.

But I wonder whether Mr Blair is happy to have the Government's lack of interest in joining the single currency broadcast by an adviser of the Chancellor's. It's the sort of thing that can make a Prime Minister look strangely peripheral in his own government

Long article, but so true. There is no genuine desire to get into the EMU at all in the British government. I wonder when the UK is going to realise it's all alone on its way down. Lat time it took you 18 years to realise you couldn't pull it off on your own. Are we looking at a 2020 membership referendum now ?

[RandBlade]

The eurosceptics aren't changing anyone's opinion. All they look like are obsessed fools. And on a party-political basis, I think the reason that Labour stays silent, is that the bickering amongst the Tories over the euro is good for them.

As I have said too many times, the times not right it my view, and not because its Labours, its just a co-incidence we have the same view. I'm not going to debate Labour's position, can we please debate mine?

Can you show any harm in waiting?

[Hazir]

While you're talking about bickering in the Conservative Party, the real rifts are showing in Labour. This whole debate is leading exactly the same way as the debate about your EU membership.

20 years after the others got in you will be there, hat in hand, pleading to be let in. I wonder if you Brits will ever learn there is not a separate set of rules for you.

Actually I am starting to feel it is really a shame we let you on board in the EU. So far you have only been benefitting from it, but you are frustrating the process no end.

[RandBlade]

I repeat ... what is wrong with waiting until the times right? We're not the only ones staying out remember.

If we joined now, our inflation would rise suddenly and a sudden plummet in the exchange rate would be terrible. Those are two serious problems. Germanies on the brink of recession, we're not. If we join now either Germanies situation would get worse, or ours would.

Plus as you keep saying, many economies in Europe are going to keep facing problems until they reform.

And comparing those two numbers (1.8 for UK, 1.9 for Germany) is wrong, as they're from different sources. Whats the UK number for where you got Germanies from?

[Hazir]

Originally posted by RandBlade
I repeat ... what is wrong with waiting until the times right? We're not the only ones staying out remember.
You (the UK)signed up to be members of a club, still you never seem to want to bear any of the burden. This wait and see policy is another example of the UK letting the others run the risk and only wanting to step in once te rewards are going to be reaped.

I know there is a lot of rubbis about the puny contributions, but they sink into nothingness if you take into account that the UK has the amount of inward investment for no other reason than that it is a EU member. And that makes the UK stand out to be a bunch of freeloaders. Joe Average in a lot of EU countries see the UK as the trouble makers in the EU.

As for the others not being in, the Danish government is working out policies to lead the country into the EMU, same is true for Sweden.

[RandBlade]

We have inward investment because of the EU!? Sorry, I'm a strong europhile, but this is BS!

We have 40% of the EU's inward investment over the last 15 years. Out of 15 countries, thats 6/15 the total (ie 6 times our share if it was even) and nearly the total all other countries added together get! So how can you claim thats because we're in? I think one nation getting nearly the total the other 14 get is more than just because we're part of the 15. Certainly much more reason than that ludicrous "no other reason". Since '99 our inward investment has risen compared to that in the eurozone as well. We do pay all our debts to the EU, we just don't agree or leap into everything the French and Germans concoct (with good reasons).

And if you're not concerned about any problems with a single currency, whats wrong with taking the risk? Nobody forced you to take that risk. Are you saying that our problem is that we're not taking the risk? We should be forced to take the risk? Listening to the way you've spoken about this, I didn't think you thought there was one anyway.

Also in the news today (Financial Times) apparantly the conditions will be tested late next year, and if the tests are passed the referendum will be early 2003.

[Hazir]

Funny, I just read that editorial and I read in it : 'And he [Blair] should drop any pretence that the big political decision will depend on the results of five economic tests carried down from the Treasury on tablets of stone. How funny a financial newspaper utterly trashes the notion that this is a decision made on the basis of economical considerations.

Inward investment

1. If you want to make a statement about the benefits (more particularly on FDI into the UK) of EU membership, it doesn't make much sense to compare to a period where you already were members.

2. A big chunk of the inward investment into the UK is from other EU members. Expression of the fact that the UK is part of an integrating market. It might be interesting to see if EMU investors are more likely to invest in other EMU country or in the UK.

I don't think it's a bad thing to take a risk, but it does get irritating to hear Brits brag about their superior entrepreneurship where they very obviously lack the guts to thread where not everybody has gone before.

[RandBlade]

Funny, I just read that editorial and I read in it : 'And he [Blair] should drop any pretence that the big political decision will depend on the results of five economic tests carried down from the Treasury on tablets of stone. How funny a financial newspaper utterly trashes the notion that this is a decision made on the basis of economical considerations.
Who knows why politicians do things? I've said many times why the economics is important, can you reply to any of those reasons why, rather than keep dragging up newspaper articles. There are plenty of people writing editorials explaining why it is an economic decision, and some like the one you quoted. Do you want me to match you quote-for-quote? I am the quote master after all ;)

2. A big chunk of the inward investment into the UK is from other EU members. Expression of the fact that the UK is part of an integrating market. It might be interesting to see if EMU investors are more likely to invest in other EMU country or in the UK.
Well although I don't have the stats, our share of investment has not fallen due to being outside the EMU.

I don't think it's a bad thing to take a risk, but it does get irritating to hear Brits brag about their superior entrepreneurship where they very obviously lack the guts to thread where not everybody has gone before.
I agree, it gets very irritating when anyone brags. But who's been bragging? Not the person you're debating with.

And you still haven't explained at all why you called the UK the home of the slums.

[Hazir]

1. you're mixing up EMU and EU, in the long run it will be harder to differentiate between the two, but at this moment there is still a difference.

2. I would like to see the first politician - meaning one of the people who is going to decide - give me a reason think it is a economical rather than a political decision. Economists who don't understand the reality of that have both proven that the UK is ready for membership and that it isn't ready for membership. The 'tests' are vague for a reason.

3. You said some posts earlier you were doing much better than the rest of Europe.

4. I have been to the UK several times and it looks like the most run down country in Western Europe. If I compare it to the Netherlands we're almost talking about a 1st world 3rd world comparison.

5. You wanted to hear a reason why it could be harmful to the UK to stay out too long. The UK has a 2% of GDP deficit in its international trade. At the moment that isn't a real big problem, but if the economical slowdown you're heading for leads to a lower trust in the British economy by foreign investors your currency runs the risk of collapsing. At the moment the UK is playing a game like the US has been playing since the 1970's. The difference is that the US can afford to play it because their currency is the currency that constitutes about 60% of international currency reserves. Sterling is a minor currency, so there is no interest outside of the UK to support it if worst comes to worst. If you want to know what it means to live through a collapse of your currency look at the Turks. Their Lira (which means pound by the way) saw the USD win 100% in value within a matter of weeks.

[RandBlade]

Originally posted by Hazir
1. you're mixing up EMU and EU, in the long run it will be harder to differentiate between the two, but at this moment there is still a difference.
No, I'm differentiating between the two. Their are differences, we're in one but not the other. When have I mixed them up?

2. I would like to see the first politician - meaning one of the people who is going to decide - give me a reason think it is a economical rather than a political decision. Economists who don't understand the reality of that have both proven that the UK is ready for membership and that it isn't ready for membership. The 'tests' are vague for a reason.
Well you're not debating with a politician, are you. Is what I'm saying not good enough, because I'm not a politician? Do you want me to go through the reasons again?

3. You said some posts earlier you were doing much better than the rest of Europe.
No, I said that at present we are economically doing better, which is true. These things change as they go through cycles, I never said that we are better, just that we are at present, despite (or even because) of us not being in the EMU.

4. I have been to the UK several times and it looks like the most run down country in Western Europe. If I compare it to the Netherlands we're almost talking about a 1st world 3rd world comparison.
Where have you been too!? I've been to many areas of Europe, and could say a couple of things about many countries, and lived in Australia and throughout the UK. I can see many problems here, and everywhere, but never in my travels have I ever seen anything to call here run-down. Where have you been to, and what have you seen?

5. ... The UK has a 2% of GDP deficit in its international trade. At the moment that isn't a real big problem, but if the economical slowdown you're heading for leads to a lower trust in the British economy by foreign investors your currency runs the risk of collapsing ...
2% is actually quite low. If we had a disaster it might be important, but nothing realistically expectable, outside Japan (which has a persistent surplus - too its harm) 2% is really average amongst 'western' nations. Do you know what the German or Dutch figures are?

Also we're not necessarily heading for a slowdown, its potential, and the view differs between studies. The only reason we're potentially heading for a slow-down is if the Americans slow further, and the eurozone economies slow and the euro doesn't recover from its devastation. This is nothing that might lead to less trust here, its only being cause because all the other nations are slowing down etc.

Finally, we have been in recessions before, and come out of them. Nobodies saying that we're facing recession, Germans are.

The difference is that the US can afford to play it because their currency is the currency that constitutes about 60% of international currency reserves. Sterling is a minor currency, so there is no interest outside of the UK to support it if worst comes to worst.
Minor currency? I'm beginning to wonder how the Netherlands ever survived on its own. We're no-way near the euro or dollar, thats true, but its not true that we're minor. The biggest currecies in the world, in order, are: US Dollar, Euro, Yen, Sterling. Fourth biggest currency is hardly minor is it? Do you really think there's no interest outside us to support the fourth biggest currency in the world? Not that we've ever critically needed support before. And it doesn't seem like the euro's been supported to well either since its launch.

[Hazir]

Originally posted by RandBlade
[QUOTE
No, I'm differentiating between the two. Their are differences, we're in one but not the other. When have I mixed them up?[/quote]
In response to my claim that a great deal of DFI in the UK is dependent on EU-membership

Well you're not debating with a politician, are you. Is what I'm saying not good enough, because I'm not a politician? Do you want me to go through the reasons again?
Still doesn't take away from the fact we're talking about a political decision.
No, I said that at present we are economically doing better, which is true. These things change as they go through cycles, I never said that we are better, just that we are at present, despite (or even because) of us not being in the EMU.
That is something that remains to be seen obviously.
Where have you been too!? I've been to many areas of Europe, and could say a couple of things about many countries, and lived in Australia and throughout the UK. I can see many problems here, and everywhere, but never in my travels have I ever seen anything to call here run-down. Where have you been to, and what have you seen?
Kent, London, Devon and South Wales. As soon as you get into a built up area the place looks like there is rationing for paint. If you don't think the UK looks like a dump compared to Australia, that makes me feel sad for Australia.
2% is actually quite low. If we had a disaster it might be important, but nothing realistically expectable, outside Japan (which has a persistent surplus - too its harm) 2% is really average amongst 'western' nations. Do you know what the German or Dutch figures are?
We're talking € 30 billion on year basis here, I don't know the exact Dutch/German numbers, what I do know that all of the eurozone had a € 2.1 billion deficit in april. Having a deficit at all was something that hasn't happened to Germany or Holland for decades.
Also we're not necessarily heading for a slowdown, its potential, and the view differs between studies. The only reason we're potentially heading for a slow-down is if the Americans slow further, and the eurozone economies slow and the euro doesn't recover from its devastation. This is nothing that might lead to less trust here, its only being cause because all the other nations are slowing down etc.
No, it's not potential, you are slowing down, quite dramatically actually, or do you call a 0.6% drop over 1 quarter a 'potential decline'? Furthermore the € isn't devastated, if you look at the $ on a wider scale you will see all currencies are experiencing the same pressures. Internally the € is delivering; we have a relative price stability, and there is a gradual process ongoing towards an integrated financial market.

Finally, we have been in recessions before, and come out of them. Nobodies saying that we're facing recession, Germans are.
Did you do any comparing on the figures coming out of Gemany and the US ? What you're also forgetting is that the ECB has still all options open, whereas the FED with 7 rate cuts still is waiting if the first one finally will kick in.
Minor currency? I'm beginning to wonder how the Netherlands ever survived on its own. We're no-way near the euro or dollar, thats true, but its not true that we're minor. The biggest currecies in the world, in order, are: US Dollar, Euro, Yen, Sterling. Fourth biggest currency is hardly minor is it? Do you really think there's no interest outside us to support the fourth biggest currency in the world? Not that we've ever critically needed support before. And it doesn't seem like the euro's been supported to well either since its launch.
Fourth biggest? It's not even in the same league! And no, it has been proven before the outside world has no interest in the external value of Sterling. Remember 1992? And those were the other ERM members refusing to bail you out, not just some third countries. If you need some reminder, 1992 was also the year when the UK started to make clear it was hesitant about adopting €. France which was a certain future member and facing the same problems as the UK got 100% support from the other central banks. Result; Sterling dropped like a brick, the french franc came through the shockwave unharmed.

[RandBlade]

Originally posted by Hazir
Originally posted by RandBlade

No, I'm differentiating between the two. Their are differences, we're in one but not the other. When have I mixed them up?
In response to my claim that a great deal of DFI in the UK is dependent on EU-membership

Well you're not debating with a politician, are you. Is what I'm saying not good enough, because I'm not a politician? Do you want me to go through the reasons again?
Still doesn't take away from the fact we're talking about a political decision.

I disagree! I say its an economic decision as well as political. I've given you my reasons, do you want me to state them again?

No, I said that at present we are economically doing better, which is true. These things change as they go through cycles, I never said that we are better, just that we are at present, despite (or even because) of us not being in the EMU.
That is something that remains to be seen obviously.
No, its just a statement, at present we're doing well, Germany isn't.

Kent, London, Devon and South Wales. As soon as you get into a built up area the place looks like there is rationing for paint. If you don't think the UK looks like a dump compared to Australia, that makes me feel sad for Australia.
Never been to those areas. When I went to Frankfurt, there were used needles lieing on the streets, never seen them here.

We're talking € 30 billion on year basis here, I don't know the exact Dutch/German numbers, what I do know that all of the eurozone had a € 2.1 billion deficit in april. Having a deficit at all was something that hasn't happened to Germany or Holland for decades.
€30bn? Where'd you get that figure from, at 2% it would mean our GDP is €1.5 trillion, is that right? I thought the entire worlds GDP is $US 6 trillion.

No, it's not potential, you are slowing down, quite dramatically actually, or do you call a 0.6% drop over 1 quarter a 'potential decline'? Furthermore the € isn't devastated, if you look at the $ on a wider scale you will see all currencies are experiencing the same pressures. Internally the € is delivering; we have a relative price stability, and there is a gradual process ongoing towards an integrated financial market.
No, I call it foot-and-mouth. Our growth is still much faster than others.

Did you do any comparing on the figures coming out of Gemany and the US ? What you're also forgetting is that the ECB has still all options open, whereas the FED with 7 rate cuts still is waiting if the first one finally will kick in.
Still all your options open? The ECB rate is .75% less than the BoE rate, besides we're talking about ECB and BoE, not the Fed.

Fourth biggest? It's not even in the same league! And no, it has been proven before the outside world has no interest in the external value of Sterling. Remember 1992? And those were the other ERM members refusing to bail you out, not just some third countries. If you need some reminder, 1992 was also the year when the UK started to make clear it was hesitant about adopting €. France which was a certain future member and facing the same problems as the UK got 100% support from the other central banks. Result; Sterling dropped like a brick, the french franc came through the shockwave unharmed.
Wrong! The reality is, that we let our value fall in 1992. We didn't try to save it anymore, so we let it fall overnight. And whatever the reason why we let it fall, it was a good job we did. You should not try to distort the markets, and it did wonders to our economy letting it fall, while France has still got very serious problems.

[Hazir]

Originally posted by RandBlade
No, I said that at present we are economically doing better, which is true. These things change as they go through cycles, I never said that we are better, just that we are at present, despite (or even because) of us not being in the EMU.
That is something that remains to be seen obviously. There were claims to the same effect for 2000 during which euroland saw a growth of 3.4% as opposed to 3% for the UK according to eurostat. For the first quarter of this year they see a 0.5% rise for both EU and eurozone.
[/quote]
No, its just a statement, at present we're doing well, Germany isn't.[/quote]
The UK is not doing well, it may be doing better than Germany, which still remains to be seen. It is not doing better than the entire eurozone.
Never been to those areas. When I went to Frankfurt, there were used needles lieing on the streets, never seen them here.
I am certain you will also be able to find those in any big city in the UK. Which still doesn't take away from the fact that (western) Germany looks a lot less run down than the UK. And Germany is even lagging behind a lot of other continental countries because of the drain caused by the eastern states.
€30bn? Where'd you get that figure from, at 2% it would mean our GDP is €1.5 trillion, is that right? I thought the entire worlds GDP is $US 6 trillion.

The 2% comes from the Newspaper The Times. If it is correct it means that 2 of your GDP, which is about € 1,5 trillion indeed amounts to € 30 billion. The GDP for euroland is approximately € 6.4 trillion, which in its turn is about € 1 trillion smaller than the GDP of the US. Since I am working from memory, I could be a bit off, but not by far.

No, I call it foot-and-mouth. Our growth is still much faster than others.
You call it f&m, analysts call it the spreading of the downturn to the wider economy from the manufacturing industry.
Still all your options open? The ECB rate is .75% less than the BoE rate, besides we're talking about ECB and BoE, not the Fed.
I don't think too often about the BoE, you are right though in saying the refi rate in Europe is well below the one in the UK. And that is where it will remain untill you are EMU members. What really matters on a worldscale though are the actions of Fed, ECB and BoJ. Of these three the ECB still has kept its powder dry. It can afford to do this because even though there is a slowdown in the eurozone, it is still not as severe yet as in either US or UK. Besides which, kickstarting the economy is not a primary goal of the ECB.
Wrong! The reality is, that we let our value fall in 1992. We didn't try to save it anymore, so we let it fall overnight. And whatever the reason why we let it fall, it was a good job we did. You should not try to distort the markets, and it did wonders to our economy letting it fall, while France has still got very serious problems.
You let it fall? Yes of course you let it fall, because the BoE after trying to support Sterling found out that the marketforces it was working against were too strong. At the time there was an outcry in the UK about the treason of the Bundesbank. You trying to make it out to be a decision you wanted to make is ludicrous. As for France, I have got no idea what you are talking about. The only euroland economy that's really underperforming is Germany. Which isn't exactly small beer, but it's not amounting to all of euroland.

[Hazir]

I just found the data for the first 4 months at eurostat (man finding something at that site is like looking for a needle in a haystack)
EU deficit € 40.6 bn,
UK deficit € 21.7 bn.
Germany had a surplus of € 25.1 bn over the same period.

[Dragon Revisited]

Wow, this thread has really come back to life!

I was watching "Question Time" a couple weeks back, and one of the Conservatives ... I can't remember his name, but everyone talked about him as if he wasn't there ... who had been against the EU and the Euro for economic reasons during the election came flat out and said he was personally against it because it threatened the historical culture of the British people.

I think they spent the remainder of the program beating him with sticks. But honestly I would expect a lot of people to have similar fears when you talk about integrating a country with such a long past into something new which could (and probably should) one day swallow it up.

[RandBlade]

DRev, thats why the Tory party are full of unelectable fools.

The only 2 who people would talk about as if they're not their are IDS and David Davis. They both said they were 100% opposed to the euro. And IDS is now potentially the next leader, if he wins then I'm not sure the Tory party will survive as HM's opposition. I could well imagine the Lib-Dems becoming the official opposition and the Tories becoming a minor party at this rate. The political reasons to stay out are absurd nonsense.

Hazir, I'll reply once I've found my stats, will wait until then.

[RandBlade]

Well, I've just found the stats I've been meaning to show you since I was away. The economist (July 7-13th '01) had a review of Italy, and included charts of all key economic indicators, from 1990 to 2000, compared to 4 other EU countries: Britain, Germany, France and Spain. As well as the 5 European countries in all the charts, some have the US and/or Japan as well.

GDP growth: With each nation having their 1990 GDP set to the base rate of 100, 10 years later the US is 1st, Spain 2nd (although their serious unemployment problems is a key factor), Britain is 3rd. 1990-1992, we fell each year, since '92 we've been growing much faster than any nation other than the US and Spain.

Unemployment: Britain has been the lowest since Mid '95. 2000 figures: Britain 6%, Germany 8%, France 9%, Italy 11%, Spain 14%. In the decade, only Spain and Britain's rates have fallen. Germanies has doubled from 4, France rose slowly for 5 years, then fell slowly to be back where it started, Italy has been fairly steady but is up 3. Britain's fallen every year after '92 to half of the level in '92. Spain's is weird, in '93 it reached a peak of 24% and has fallen 10% since then (still by far the worst though)

Tax Revenues(% of GDP): Higher than Japan, US and Spain. Lower than France, Italy, Germany. Spain, Britain and Germany are very close (35,36,37 respectively). Big difference between US and Spain, and Germany and Italy. While France is a very high 46%

Investment: $130bn, more than quadrupled in value since '97, gone from barely highest to nearly double Germany (which is 2nd ~ $82bn).

Top Companies: (Not a chart, a table of the present figures) Of the 500 top European Companies, 132 are British ($1,940bn). Germany is second in quantity (87/500, $855bn), while France is second in value ($1,117bn).

Those are the plain stats. Since '92 (when we left the ERM), Britain has outperformed all other European countries on all counts(except taxation as you can't say whats good or bad with that), except GDP growth where we're second to Spain, but Spain is worst or second worst in all others. So economically, since '97, we've been outperforming all other European countries, and have better figures in all areas (except GDP growth with Spain).

By '97(Blair announcing no referendum this parliament), we were already 1 in all areas (2 in GDP) but since then rather than being punished by our absence from the euro, our chart kinked to becoming even better, with investment skyrocketting.

So those stats are the reasons why I said we've been doing better. And we've not been 'eating Germanies dust', we've been performing better for nearly a decade. The reason I have kept comparing to Germany its Germany thats second to us in most of the charts.

Well, those are just the plain figures, with my slant on them in the last three paragraphs. What do you think?

EDIT: Went to http://www.economist.co.uk to get the graphs on-line (as I don't have a scanner set up) but I'd have to pay. As I've already bought that issue, you can guess what I feel about that, so I won't be able to show you the graphs unfortunately unless I set up our scanner.

[Hazir]

Originally posted by RandBlade
[B]Well, I've just found the stats I've been meaning to show you since I was away. The economist (July 7-13th '01) had a review of Italy, and included charts of all key economic indicators, from 1990 to 2000, compared to 4 other EU countries: Britain, Germany, France and Spain. As well as the 5 European countries in all the charts, some have the US and/or Japan as well.

I have to concede it seems for the period behind us. I am not totally convinced this is also the case for the near future.

Some things I think remarkable:

1. unemployment Germany
*8% is remarkably low, to me it seems they are slowly getting the Eastern territories under control.

2. DFI
*quadrupling is impressive no doubt, which countries do the investments come from ? If there is a substantial part coming from the rest of the EU that means the EU economy is integrating further in the EU economy. It is still more difficult to buy into Germany than into the

===========================================================
Here is a little compiling I did on the Irish Referencum by the way. Instigated by a parallel debate in which people seemed to think they could use it as evidence of Irish euroscepticisme.
===========================================================
The Irish Referendum on Nice, myths and facts.

The eurosceptics love to use the rejection of the Irish voters of the Nice Treaty as evidence that the Irish people were expressing their dissatisfaction with the EU.

The Irish government campaigned for a yes, putting forward that the Treaty was to pave the way for enlargement of the European Union with a number of Eastern European Countries.

The NO Campaign on the other hand put forward a number of issues they claimed were sufficient reason to reject the Treaty of Nice.
* loss of neutrality because of the Rapid Reaction Force, the RRF is based on the Treaty of Maastricht which the Irish accepted in an earlier referendum, not the Treaty of Nice,
* the introduction of the €, again something that was dealt with not in the Treaty of Nice, but in the Treaty of Maastricht.
* fear of introduction of European Abortion Legislation, the first politician to promote European legislation on this issue is yet to be found, and furthermore the framework of the EU gives no basis for such Unionwide legislation.
* general rejection of the EU, which again was not the issue of the Treaty of Nice but a Union to which the people of Ireland had said yes to in a referendum on the Treaty of Maastricht.
* fear of losing contributions from the cohesionfunds and CAP because the poorer new countries would be more eligible than the old 'poor' EU members. Finally something that had a relation to the Treaty they were asked about.

The Irish electorate is about 3 mln, about 1 mln of the registered voters came to the polls to cast their vote. After the count it turned out that 50.000 people more had said no to the Treaty, so the Treaty couldn't be ratified.

Does this mean the Irish people rejected the Treaty of Nice? Judge for yourself :

In the Eurobarometer of spring 2001, initial results published july 17th by Eurostat.

When asked if EU membership is a good thing

72% of the Irish say it is a good thing
13% of the Irish say it is neither good nor bad
4% of the Irish say it is a bad thing
11% of the Irish say they don't know

When asked if they benefit from membership

83% of the Irish say yes
5% of the Irish say no
12% of the Irish say they don't know

When asked about the €

72% of the Irish say they are for
16% of the Irish say they are against
12% of the Irish say they don't know

When asked about the common foreign policy for the EU

56% of the Irish think having one is a good thing
20% of the Irish think having one is a bad thing
22% of the Irish don't know

When asked about the common defense policy for the EU

53% of the Irish say having one is a good thing
27% of the Irish say having one is a bad thing
20% of the Irish don't know

When asked about the enlargement

59% of the Irish are for
18% of the Irish are against
24% of the Irish don't know (rounding off causes total to be 101%)

Look at the issues, look at the figures.

For me personally there can be only one conclusion, the small minority of eurosceptics in Ireland managed to hijack a referendum because of the low turnout at the ballot box. The Irish government has every reason to investigate if a new Referendum on the Treaty of Nice should be called to give the majority of the Irish voters to express their opinion.

[RandBlade]

I saw nothing wrong with the Treaty of Nice, and would have voted yes if there was a referendum here. Same as the Treaty of Maastricht.

Regarding your stats though, it appears from what you said they were complaining about what they've already gone through, and over half-a-million regret Maastricht from what you said.

Also, you can't reject the results out-of-hand because it got the result neither of us would want, and there was low turnout. The fact is that a majority did vote against. And it means that at least half-a-million out of 3m voted against. That is a lot. And you can't say that the two million abstentions were for it, if they were they'd have voted.

[RandBlade]

This is the only image I was able to retrieve without paying. Shame I can't show the unemployment and investment, they are remarkable.

http://www.economist.co.uk/images/20010707/csu875.gif

Note that while our inward investment quadrupled, other nations had their levels barely changed. Germanies doubled, while most others stayed stagnant, so its not just a case of integration.

[Hazir]

What I said there is a case to hold a new referendum.

Also you should have a real look at the figures, if you do you will see that the no vote as a percentage of the electorate are just a few percentage points over the hard core of anti-europe Irish. For every Irish person that is against Europe, there are 5 in favour of Europe. AND as you also can see there is a majority of Irish people (59%) in favour of enlargement. Which defies the claim that the 17% no voters were speaking for the majority. They hijacked the referendum, you have to give them that. But they do not represent the people, just a minority. Also is your claim that people might be retreating on the Treaty of Maastricht is a bid odd. There is a big majority that says the EU membership is a good thing and that the Irish benefit from membership. The Treaty of Maastricht IS the EU. Your claim invokes an image in my head of an American who pledges allegiance to the US but rejects the Constitution.

PS national referenda about what is basically day-to-day running of the country is laying the axe at the root of the representative democracy and all it stands for.

[Hazir]

BRITISH Prime Minister Tony Blair last night issued a "make or break" ultimatum to EU leaders, telling them that failure to agree economic reforms next year would have a "crucial" effect on Britain's decision on whether to join the euro.

From the Irish Times, looks like Mr Blair is forgetting who is the supplicant. Really, Brits should stop having clowns for their prime minister.

[RandBlade]

I agree with Blair, and think you should too.

We've agree for ages that many European economies need reform, haven't we? So whats wrong with our PM saying what we both know?

Also, how is Blair a supplicant? I see no reason at all why he's a supplicant frankly, that comment is absurd.

[Hazir]

What Blair thinks is totally irrelevant to me. He's not my PM and as far as Europe goes he's got virtually no other effect on its leaders than that they are trying to avoid him. I sure hope that € vote results in a no ASAP, get it over and done with and then start working on severing ties with the UK altogether.

It is highly irritating to hear the Brits act as if they know how to run the world when they can't even run their own country.

Too bad the name Patagonia is already taken because it suits the British patronizing so well.

[RandBlade]

Patronising!? YOU have said there is need for reform. The purpose of the upcoming negotiations is to finally agree to reform that has been agreed for years now is necessary, but the Germans and French have been dragging their legs. So what at all is wrong with Blair pointing out that we should finally have implimentation of what we both agree, and what the leaders across the EU have agreed is necessary? What is patroinising with that!?

Blair is the leader of a country in the EU, now your confusing EU with EMU. And to say that we have no influence is to deny the truth. We're one of the biggest countries in the EU, and at the Nice treaty we got much of what we wanted and were able to convince other nations across the EU that what the French and Germans were trying to push through was wrong, and we were able to get majority support through other nations like Holland to be able to defeat the nonsense they were coming out with, that no-one else stood against until we did, then most of the other countries did.

Also, one of your arguments earlier in this thread was that the UK will in the future lose our influence if we stay out, and I showed then why that was nonsense (at least you dropped it when I rebutted it) so to come out now and say we have no influence is not just plain wrong, its hypocritical as well and you should know it to be nonsense.

Next, "can't even run our own country", we've already gone over this, Britain went through these reforms we both agree are necessary, Blair's saying is important and the other EU leaders agree is important but are finding excuses not to do, and now Britain is the most successful country economically in all of the EU. If being better economically than all of the rest of the EU is not even able to run our own country, I can't imagine what we'd be like if we could :)

Finally, who's been patronising. You've been coming out with regular offensive terms lately, "home of the slums", "not able to run their own economy" etc. What have I done thats patronising.

But most importantly, as I said and you still haven't answered ... why should Blair say what we all agree needs to be said? Whats patronising about that, and how are we uninfluencial? Especially when we've already agreed we are, and you claimed earlier that if we rejected the euro we'd risk losing that.

[RandBlade]

WEDNESDAY AUGUST 01 2001

Leading article

The toughest test

The EU must reform before Britain can even think of the euro

In the space of less than seven days, official policy, or what is suggested to be official policy, towards the single currency has been through a series of quite wild contortions. A report published in the Financial Times on Thursday night claimed that Tony Blair and Gordon Brown had reached an accord over the timetable for a euro referendum. This account was denied so forcefully by the Chancellor that his words were almost audible from New York City. Whether this exercise started as an attempt by pro-euro figures to destabilise Mr Brown while he was abroad, or instead to raise the profile of Europe to the discomfort of Kenneth Clarke during the Conservative Party leadership election, is a matter of pure speculation. In either case, it was an unattractive spectacle.
It is the substance of the single currency, not its spin, that should matter to ministers. Mr Blair acknowledged this on Monday when he contended that the prompt implementation of a substantial package of reforms would “make or break” the credibility of the European Union and, by implication, determine whether or not he could plausibly contemplate initiating a referendum campaign over the euro. The Prime Minister conceded that the process of radical economic liberalisation agreed in principle in Lisbon 16 months ago had not made the progress that he had wished for. Mr Blair will now demand both sweeping deregulation of monopolistic markets and an overhaul of the common agricultural policy at a Barcelona summit next spring.

The Prime Minister’s assertion that this is not a “sixth economic test” is, in a strict sense, entirely accurate. The original five tests issued by the Chancellor in October 1997 contained a number of references to the importance of the European economy demonstrating that it could implement the “flexibility” required to ensure that monetary union did not become a straitjacket.

But those references then were distinctly vague and did not appear to be central to any economic assessment. The flavour of the five “tests” four years ago was that they were an examination of whether the British economy could adapt itself to cope with the demands of the euro — and not a series of searching questions about the nature of the eurozone itself. If Mr Blair is willing to make meaningful EU reform a much more robust element of the Treasury review of the single currency, that is welcome and rational. It does not make the many severe constitutional or political objections to membership of the euro inconsequential, but it does offer the hope that the economic aspect of this debate might have ballast.

The Prime Minister is right to place his standard on this territory. His prospects for success at Barcelona next March are, however, limited. At the Stockholm summit four months ago, an event overshadowed in this country by the outbreak of foot-and-mouth disease, France and Germany combined to block measures which would have transformed the market for energy in Europe. With elections due for the presidency and the National Assembly in France a matter of weeks after the EU meeting in Spain, and a federal contest in Germany following some six months later, the chances of Jacques Chirac, Lionel Jospin or Gerhard Schröder producing dramatic concessions that might threaten local interests has to be deemed slender.

Mr Blair must appreciate these difficulties. It might be that he believes his best chance of securing reform rests in raising the stakes, or that he would prefer that the blame for a negative assessment of the euro could be redirected to the conservatism of other EU actors. Most words uttered by a Prime Minister on official trips overseas are instantly forgotten. These remarks will be seared on to the record
http://www.thetimes.co.uk/article/0,,248-2001262806,00.html

From The Times, leading article (editorial).

[Hazir]

What's the purpose of posting this editorial ? It hardly adds anything to the debate. What is happening is that the British government is fouling itself up at the mere thought of having to cope with two irreconcilable matters. Membership of the EMU in order to get back some clout over the business goin on inside the EU and their promise to the British electorate to up spending in the public sector.

The EMU treaties severely limit governments that want to increase spending without raising taxes. Probably it was the slap on the fingers that Ireland got that woke B&B up; if they want to bring public spending up to a European level under the conditions the EMU poses they will find very soon they have reached the limits of their economical freedom.

And that's where this totally dishonest pleading for a reform of the EU comes in. What they want is the hide the fact that it isn't Britain that isn't ready for the EMU, but that their Labour political program isn't ready for EMU membership. And so all of a sudden they start to make demands they know full well sound good in the newspapers but that don't stand a chance in hell because of the people who promote them. They know they are only irritating the other governments in Europe, making certain these dig in their heels and will not make ANY concession over EMU that Britain may want. But for the home public it seems like they're genuinly working to improve the working of the EU.

If they would have been for real reforms of the EU they wouldn't have been working so hard to frustrate any move towards a Union that works more logical and more open to the general public.

The way they come out - in Brasil and the USA, not Europe - to me only shows they are playing a dirty game with the British public. What they are not doing is working together with the other goverments of Europe to put their actions where their words are.

FYI, the headlines in Britain are not mirrored in the continental media. Hardly anybody pays any notice any longer to what goes on in your part of Europe.

And that will probably remain like that untill they stop talking crap and start to work on proposals like this one : http://www.europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/01/1096|0|RAPID&lg=FR

[RandBlade]

Thats not a proposal! It says theres going to be a study until 2002 and then another report, what are the governments supposed to do about that.

Now please stop ignoring my questions:
How is Blair a supplicant?
You have said reform is needed, so how was Blair wrong?

[RandBlade]

Originally posted by Hazir
What's the purpose of posting this editorial ? It hardly adds anything to the debate. What is happening is that the British government is fouling itself up at the mere thought of having to cope with two irreconcilable matters. Membership of the EMU in order to get back some clout over the business goin on inside the EU and their promise to the British electorate to up spending in the public sector.

No, you're the one that said that Blair had made the call for reform, which you said was needed as well (although you won't reply to this point). You introduced it, that editorial says again why the three of us (you, me and now him) are right, why reform is needed.

[Hazir]

Originally posted by RandBlade
[B
No, you're the one that said that Blair had made the call for reform, which you said was needed as well (although you won't reply to this point). You introduced it, that editorial says again why the three of us (you, me and now him) are right, why reform is needed. [/B]
Reform is needed, but Mr No isn't exactly the one who's been advocating real change over the last 4 years so his demands are a bit ludicrous. If he would have made a real effort towards reform of the EU then this would be an entirely different story. But so far all he does is play the British public and do nothing. All fluf and no substance.

[Hazir]

Originally posted by RandBlade
Thats not a proposal! It says theres going to be a study until 2002 and then another report, what are the governments supposed to do about that.

Now please stop ignoring my questions:
How is Blair a supplicant?
You have said reform is needed, so how was Blair wrong?
I just noticed this mail, the point may have been lost on you but it is the UK talking about joining the EMU, not the other way round. It would seem only logical that the smaller partner has to adjust more than the bigger one as it is the one to benefit most (given the fact that the 'ins' have already cashed in on the benefits and benefit relatively less from a UK membership now than from the establishing of the EMU 2.5 years ago).

Or to put it even blunter, we are not that dissatisfied with the running of the EMU/ECB, if the UK wants to join it shouldn't expect we're going to change it just because they want it. As far as the EMU is concerned there is no internal debate, there is a debate going on in one of the candidate countries, they have to sort out their problems on whether to join or not, not bother us with demands that will not be met.

Just like the US wouldn't change its Constitution for Puerto Rico to become the 51st state.

[RandBlade]

Originally posted by Hazir
I just noticed this mail, the point may have been lost on you but it is the UK talking about joining the EMU, not the other way round. It would seem only logical that the smaller partner has to adjust more than the bigger one as it is the one to benefit most (given the fact that the 'ins' have already cashed in on the benefits and benefit relatively less from a UK membership now than from the establishing of the EMU 2.5 years ago).

Or to put it even blunter, we are not that dissatisfied with the running of the EMU/ECB, if the UK wants to join it shouldn't expect we're going to change it just because they want it. As far as the EMU is concerned there is no internal debate, there is a debate going on in one of the candidate countries, they have to sort out their problems on whether to join or not, not bother us with demands that will not be met.

Well actually, the Europeans are the one's suggesting the UK join, most of the time. As you've been saying the Labour party haven't been very noisy about the reasons why we should join, the Europeans have been.

Also, we're not disatisfied with the EMU itself (at least I'm not). Its the economies within the EMU that need changing, not the EMU itself. I can't think of a single problem with the EMU (except that the timings wrong), there's no need to reform the EMU. But there do need to be genuine reforms, which we have been supporting for a long time, that we have got agreement to in the past, and that you too are supporting, but these countries are finding excuses not to implement.

[Hazir]

Originally posted by RandBlade

Well actually, the Europeans are the one's suggesting the UK join, most of the time. As you've been saying the Labour party haven't been very noisy about the reasons why we should join, the Europeans have been.
Where did you get that idea? In continental Europe the British membership is as close to a non-issue as it comes. For example, if you do a search on major continental newspapers on 'euro' what you get is hundreds of pages with stockquotes etc. If you do the same on the site of a British newspaper you get special reports on whether to join or not without end. The perspective is totally different.
Also, we're not disatisfied with the EMU itself (at least I'm not). Its the economies within the EMU that need changing, not the EMU itself. I can't think of a single problem with the EMU (except that the timings wrong), there's no need to reform the EMU. But there do need to be genuine reforms, which we have been supporting for a long time, that we have got agreement to in the past, and that you too are supporting, but these countries are finding excuses not to implement. So you realise the game can be played that way? Saying one thing and trying to pull off another? The more I think about it, by the way, the more amusing I find it. Because if the British government really wants what it says it wants there is no easier road towards that end than supporting the creation of this 'economic government' the French say they're for. That way you can overrule protectionist tendencies that still remain.

PS You claimed the other day that the UK had the fourth biggest economy. According to a list I saw today in an investment magazine, the UK would come 5th after France. (That is of course if you still see France as having a separate economy which will get harder and harder as EMU evolves).

[RandBlade]

I said fourth biggest currency. And at present the French economy is bigger than ours, but we've been consistently our-performing France for a long time now, and we will probably overtake France before long.

One thing I must say, I'm ashamed of the Tabloid press. I've kept saying don't think I've got the same views as the Labour party, I am certainly not a Blairite. And the tabloid gutter press is certainly full of fools, have no doubt about that. I don't care about anything those papers say, and just ignore them.

So you realise the game can be played that way? Saying one thing and trying to pull off another? The more I think about it, by the way, the more amusing I find it. Because if the British government really wants what it says it wants there is no easier road towards that end than supporting the creation of this 'economic government' the French say they're for. That way you can overrule protectionist tendencies that still remain
I don't understand :confused:

I truly dislike all notions of an 'economic government' that the French are proposing. All they mean, is for us to become as protectionist as them, not the other way around. Look at the language they use, "removing unfair advantages", what that really means is making us as high tax, with the same welfare regulation etc as them. A single economic government would drag all nations down to the lowest common denominator, not force other nations to improve. We could not tackle France's protectionism, but France is trying to force its protectionism on others.

I would support a sort of economic government as I believe you envisage, but the French would never accept it. I've told you, I want us to go as far political as to even become a European republic, but I don't want us to lose our economic powers, so long as the situation in the some of Europe (predominantly France) is economically as bad, and structurally in need of reform as it is.

But none of this has much to do with the EMU. The EMU is a currency, thats all. Its got nothing to do with taxation etc, the only serious economic component of the single currency is the single rate of interest, which at the moment would be inflationary for us.

That is of course if you still see France as having a separate economy which will get harder and harder as EMU evolves
This overestimates the significance of the EMU by far! All the € is, is notes and coins that can be used in 11 different countries, and the result shared interest rate. Its got nothing to do with economic integration. The EMU isn't going to evolve! Thats why I said that not having a voice now is insignificant, there's no real significant possible reform for the EMU, its as it is now. Currencies are only that, notes coins etc used to purchase goods. Its different taxations etc by political borders that make an economy, not the currency. Some countries only use the US$, but they're not the same economy as the Americans. Economy borders are purely political, and will be removed by the evolution of the EU, not the EMU, as well as further globalisation.

[Hazir]

You're really mistaken on the EMU, maybe institutionally there isn't further development, but there is a big spin off from it. First of those being the euro-X group of ministers of finance which is the place where ministers of 'rogue' states run a serious risk of a bloody nose when they don't stick to the rules of the stability pact. Ireland's 'transgression' got a lot of press, but it was Italy quite recently that got sent back to do its homework again to balance their budget. And guess what? The Italian minister did exactly that.

Also the EMU is putting a LOT of pressure on governments to come to the type of reforms we need to get a better working economy. Also is capital flowing free-er now that before EMU, just because of the removing of exchange-rate risks. A very visible effect of the EMU in Holland is that there came about a full merger of the stock exchanges in Amsterdam, Brussels and Paris, making it MUCH easier for retail investors to invest in the other countries.

And I understand that (part) of the low exchangerate for the € is that institutional investors had to realign their portfolios because euroland investments was resulting in an 'underweighing' of the international exposure.

So all in all EMU is reinforcing the single market very effectively.



What I really don't understand in you (or other brits for that matter) either, is this fear of the supernational structure in Europe, as if that can only be used to further the objectives of France and Germany. Sure enough, they can be used to do that, but they can also be used to achieve other objectives. Economically Spain and the Netherlands stand a lot closer to the British POV than to the German or French position. And probably Italy and Ireland can be counted in the same camp too. Forming coalitions other than those around France and Germany and protectionism are possible. But if the UK wants to take a leading role in that it should stop to act hysterically to the institutions and get working on the issues. In such a constructive way the UK can achieve quite a lot. As things are at the moment, the UK is just seen as a troublemaker on the institutions which makes it impossible for a coalition on issues to form. Because, quite frankly, the countries that are [b]potential allies of the UK on the issues, don't agree in the least with it on the Union. Sure enough we don't want an interventionist superstate. But a superstate we want.

[RandBlade]

Originally posted by Hazir
You're really mistaken on the EMU, maybe institutionally there isn't further development, but there is a big spin off from it. First of those being the euro-X group of ministers of finance which is the place where ministers of 'rogue' states run a serious risk of a bloody nose when they don't stick to the rules of the stability pact. Ireland's 'transgression' got a lot of press, but it was Italy quite recently that got sent back to do its homework again to balance their budget. And guess what? The Italian minister did exactly that.
This is just ensuring that the nations keep to a minimum credible level in the areas of their economies, its got nothing to do with further integration. It is good, although Britain has for a very long time been following those rules anyway. Italy on the other hand is a total mess, and it was frankly a bit of a surprise when they scraped through the minimum needed to join.

Also the EMU is putting a LOT of pressure on governments to come to the type of reforms we need to get a better working economy. Also is capital flowing free-er now that before EMU, just because of the removing of exchange-rate risks. A very visible effect of the EMU in Holland is that there came about a full merger of the stock exchanges in Amsterdam, Brussels and Paris, making it MUCH easier for retail investors to invest in the other countries.
The removal of exchange rate risks is one of the great thing in the euro, I granted that in one of my first posts, as one of the reasons I want to join, when we can. I haven't seen any reform yet though, whatever amount of pressure you may think is there. Also, the first idea for a combined exchange rate came between London and Frankfurt. Again thats not a result of the EMU.

And I understand that (part) of the low exchangerate for the € is that institutional investors had to realign their portfolios because euroland investments was resulting in an 'underweighing' of the international exposure.
You're saying that the problem was that investment had to be moved overseas?

So all in all EMU is reinforcing the single market very effectively. The only gain I can see of all those is the removal of the exchange rate between nations.

Any evidence/reason for this at all? I'll definitely debate this with you if you want in another thread.

What I really don't understand in you (or other brits for that matter) either, is this fear of the supernational structure in Europe, as if that can only be used to further the objectives of France and Germany. Sure enough, they can be used to do that, but they can also be used to achieve other objectives. Economically Spain and the Netherlands stand a lot closer to the British POV than to the German or French position. And probably Italy and Ireland can be counted in the same camp too. Forming coalitions other than those around France and Germany and protectionism are possible. But if the UK wants to take a leading role in that it should stop to act hysterically to the institutions and get working on the issues. In such a constructive way the UK can achieve quite a lot. As things are at the moment, the UK is just seen as a troublemaker on the institutions which makes it impossible for a coalition on issues to form. Because, quite frankly, the countries that are [b]potential allies of the UK on the issues, don't agree in the least with it on the Union. Sure enough we don't want an interventionist superstate. But a superstate we want.
Actually, we do work a lot with the other nations, as I've been saying all along. The problem is that the press here has an obsession with the euro. You just need to look at the negotiations with the Treaty of Nice to see that we do work a lot with other nations. The main difference is all just PR. The French and Germans love public announcements about the future of an EU superstate, but what they announce isn't real, little of it occurs. On the other hand, the present Blair government rarely makes big political announcements of plans in the public. But behind the PR on all sides, all the nations are working together, us just as much as any other.

What I am opposed to is a tax union. Economic union(ie the present), great. Monetary union, yes but we could find a much better time than now. Tax union, no.

Frankly, what is the point? Just using the UK and France, we want a non-intervenionist government, France wants an interventionist government. Why should either of us be forced to not get the sort of government we want? What advantages are there, as I see none. The French stand to gain if they force intervenionism on everyone else (because all others would lose), we don't want to force non-intervenionism on them. Thats why our position in no to a tax union. And every treaty, we've been able to get it rejected, continuing the choice of either, precisely through the sort of discussions with other nations that you don't seem to think we have. I'd prefer to debate tax issues in a seperate thread to this euro one though, if you want to debate it.

[Hazir]

Sorry I have to say this, but you obviously don't get information on the way the euro-x group works. The way in which business is done there is no longer the *****footing around you see in ecofin. Governments have a much bigger stake in eachothers decisions and are confronting countries that imperil the rest. This is also the reason why I think a tax-union will come about, because the EMU states need a mechanism that can serve to ease of pressures on the economy that are of a local nature.

On the position of Britain, maybe saying nothing is a bit too harsh, but it certainly isn't achieving what it could achieve with a little bit more coolheaded approach of Europe and a bit less hysteria on the structures. At the moment the UK is NOT the key-player it could be and therefore it's agenda is significantly less important than that of Germany and France.

On further union, I know the British press loves to overstress any kind of sign the French aren't really for a federal Union, but fact is that there is a push on the continent for federation. Actually, if the EEC wouldn't have grown so fast it would already have been transformed into a federation.

[RandBlade]

Originally posted by Hazir
Sorry I have to say this, but you obviously don't get information on the way the euro-x group works. The way in which business is done there is no longer the *****footing around you see in ecofin. Governments have a much bigger stake in eachothers decisions and are confronting countries that imperil the rest. This is also the reason why I think a tax-union will come about, because the EMU states need a mechanism that can serve to ease of pressures on the economy that are of a local nature.
I agree that other countries put you in peril, hence the pressure is definitely greater. What I said though is that what genuine reforms have occured? And since as you say, other members have need for reform, which we don't, mightn't it be advisable to let these nations get through the reform they need, and then join them? Although I expect we'll join long before some nations have reformed to our level.

On the position of Britain, maybe saying nothing is a bit too harsh, but it certainly isn't achieving what it could achieve with a little bit more coolheaded approach of Europe and a bit less hysteria on the structures. At the moment the UK is NOT the key-player it could be and therefore it's agenda is significantly less important than that of Germany and France.
Who's not being level-headed? Me? The government? The opposition? The Sun? The Tabloid gutter press are never coolheaded, and the present opposition are a bunch of fools who've been comprehensibly beaten twice now.

On further union, I know the British press loves to overstress any kind of sign the French aren't really for a federal Union, but fact is that there is a push on the continent for federation. Actually, if the EEC wouldn't have grown so fast it would already have been transformed into a federation.
Actually I think the gutter press loves to overstress any sign of a federal Union. To say it would be a federation now, is to just guess. And there's no rush, we're all fully functioning democracies as it is, I think its better to arrange the base, before rushing through federation (if you had rushed it through, the EEC would never have expanded). Very little if any expansion will occur once we are a federation.

[RandBlade]

bump to first page, in case you missed it due to the spam attack

[Hazir]

I don't agree that a full federation can't accept new member states. Just look accross the big pond. Even during the 20th century the US still was admitting states, and it's not unlikely the 21st century PR will be a state too.

PS: from where I live the UK looks more like a dysfunctional democracy.

[RandBlade]

Originally posted by Hazir
PS: from where I live the UK looks more like a dysfunctional democracy. [/B]
I said if you want to attack the UK, would you mind doing it in a new thread?

[Hazir]

Just a reminder to the euro-type people inhere, only 21 more weeks for your national coins and bills to go. And only 19 before Dutch euro-type people can get their free set of coins (oh well free, you've paid for it, but they don't make you pay for it again, so it feels like free. It's the thought that counts)

[Hazir]

Here's the reaction of the British Y€S campaign to the speeches of the British Prime minister

THE SEVENTH TEST? :

It is a worrying indication of drift when no EU story can pass without the press pack leaping to the conclusion that it is a yet another obscure omen for the euro campaign. Last week the Prime Minister made a speech calling for greater trade liberalisation and reform of the common agricultural policy (CAP) from Sao Paulo in Brazil. This was largely reported (although denied by government) as a sign of "a hardening of the position" against calling a euro referendum.

The implication being that while the 5 'economic' tests and unspoken 6th exchange rate test will measure whether Britain is ready for the euro, a seventh, namely the pace of EU economic reform, will determine whether the EU single market is really ready for Britain.

Having started in this vein the Prime Minister then, like Sir James Goldsmith, used the Mexican portion of his tour to finger the French as primary obstacle to reform. This was attacked by former Commissioner Leon Brittan as "over the top" and vapid. The argument for liberalisation has largely been won in the EU, the issues of pace and adoption are more complex than pining the blame on one country. Further in a system when one obdurate member can block progress for the rest it is hardly helpful to enforce stereotypes of 'le sabotage' as a precursor to a difficult summit in Barcelona where only full consensus can deliver results.

YES CAMPAIGN SAYS:

It is a dangerous game to imply British membership of the EU is only legitimate to the extent the other nations of the EU are 'people like us'. Either the Prime Minister is brilliantly painting a straw man to knock down - so that he can claim a victory for a liberalisation agenda as a precursor to a referendum campaign or he is sowing the seeds that will harden eurosceptic opinion amongst the British people.


As you will understand from my earlier remarks I couldn't agree more.

[Hazir]

Hi Randblade,

Some reading material for you, now that you're working at Mac you'll have less time to discuss I suppose.

U.K. Already Meets Euro Tests, Analysts Say; It's Up to Brown
By Farah Nayeri


London, Aug. 10 (Bloomberg) -- Chancellor of the Exchequer Gordon Brown says Britain can't join the euro until it passes five tests to prove the U.K. economy has converged with the rest of Europe.

Analysts say Britain can't join the 12-nation currency until Brown notices that, to the extent it can be measured, the tests have already been passed. A bigger hurdle to euro membership, they say, is the chancellor himself.

Prime Minister Tony Blair wants to enhance the U.K.'s position in the European Union and persuade Britons to overcome their opposition to joining the 12-nation currency. He can't do it without Brown, the first Labour chancellor to deliver low inflation and four years of uninterrupted growth.

``Gordon is head of the Treasury and too powerful a figure'' to oppose, said Frank Field, a former minister in Blair's first government who does not favor joining the euro. ``Blair would be broken-backed, finished were he to move on the euro without Brown's agreement and then lose the referendum.''

Brown has given himself until mid-2003 to determine whether the U.K. is ready. If he decides in favor of the euro, voters then get the final say in a referendum.

Many economists say the tests he has drawn up are a political delaying tactic and that from an economic standpoint a case can be made that the U.K. is ready to go in.

Taxi Tests

The tests -- drawn up by Brown in 1997 in the back of a taxi, according to press reports -- are that the U.K. economy must converge with that of the 12 sharing the euro and be flexible to outside shock, while the euro must be a demonstrable plus for investment, financial services and jobs.

``The five tests are designed to enable the Treasury to say yes or no depending on the political state of play,'' said Lucy O'Carroll, an economist at the Royal Bank of Scotland.

Today, analysts say, the U.K. economy -- as measured by short-term interest rates and growth potential -- has indeed converged with that of the euro countries.

The U.K.'s base interest rate is 5 percent, barely above the euro area's 4.50 percent floor rate. Four years ago, U.K. rates were nearly triple Europe's 2.5 percent benchmark. Converging rates indicate comparable inflation risks.

The rate at which the economy can grow without sparking excessive inflation is 2.5 percent in the U.K., according to the Bank of England, and between 2 and 2.5 percent in the euro area, according to the European Central Bank.

Moving Together

``The U.K. economic cycle has become significantly more closely aligned with that of Euroland,'' PriceWaterhouseCoopers said in a July report.

The pound and the euro move in tandem in foreign exchange markets. The euro has fallen 5.6 percent against the dollar this year while the pound has fallen 4.7 percent. About 60 percent of the U.K.'s exports go to the euro region. Remaining cross-channel differences are no larger than between such euro countries as the Netherlands and Germany, economists said.

``Economically speaking,'' the U.K. ``could go in,'' said DeAnne Julius, until last May a member of the Bank of England's monetary policy committee.

To be sure, some of the tests involve predictions. Whether the euro would increase investment and jobs, and help the financial services industry, remains speculative.

A pro-euro lobby group headed by former European Union trade commissioner Sir Leon Brittan projects that London's City financial district could lose as much as 14 billion pounds ($20 billion) in fees if the U.K. remains outside the euro. And many businesses say adopting the single currency would allow them to trade more with the continent, increasing jobs.

Other Opposition

Still, Brown regularly stamps out speculation that the government will use its landslide June 7 reelection to rush in.

``To join in the wrong way or on the wrong basis would not be in Britain's national economic interest,'' he said in late July, cautioning against ``shortcuts or a fudge of the assessment.''

Brown entered parliament the same year as Blair and the prime minister has said he is aware of Brown's ambitions to succeed him. A failed referendum or an ill-timed move into the single currency would politically taint both Brown and Blair.

The arguments against the euro are not just political. Some manufacturers are concerned the U.K. might peg the pound to the euro at a level that will hurt exports. In the three months to April, Britain posted a record trade deficit of 7.9 billion pounds, the highest since records began in 1697.

Sterling is likely to drop before euro membership -- it shed 2 percent in the week before the June 7 election on talk of joining -- and that could boost inflation. The Bank of England might respond by raising interest rates, making it harder for U.K. rates to match euro rates.

Some executives point to higher taxes, larger government pension liabilities and more regulation of business on the continent as reasons not to join.

``You've got two different systems that are out of kilter,'' said Adam Afriyie, managing director of Connect Services Plc, a London-based computer-services company. ``They may meet from time to time, but that doesn't mean they're going in the same direction.''

[RandBlade]

Originally posted by Hazir
Sterling is likely to drop before euro membership -- it shed 2 percent in the week before the June 7 election on talk of joining -- and that could boost inflation. The Bank of England might respond by raising interest rates, making it harder for U.K. rates to match euro rates.

This article was nonsense for the above reason. In order to join, its been estimated we need an exchange rate 15% lower than our present one. This will increase inflation quite a bit, meaning we need even higher interest rates. But European interest rates are half-a-percent-point lower before this increased need. We'd end up with an interest rate about a percentage point to low.

I'm trying to find whatever time I can to come back here, but unfortunately, I won't be able to find much time now. I've got my shift now, and I'm working 5 days a week, today and wednesday my days off (for this week at least). I'll join whenever I can still though :)

Wonder when we together make this thread hit the 1/4k mark?

[Hazir]

Randblade,

The desirable rate for entry into the EMU is 1€ = £ 0.66 . As we speak the rate has dropped to £ 0.6313 . Are we going to witness a change in British policies now that the five tests are met (according to a host of analysts) and the rate is getting into range ?

[RandBlade]

Maybe. Another sign you could have leapt on, we've got even lower inflation figures this month than last month. Although you probably wouldn't mention that (as it shows again how we're not performing badly;)) it bodes well for potential euro entry in the nearer future, as it means the lower euro interest rate will potentially be OK for us soon, which it wasn't when we started debating.

I still say not yet though (although I think I'm more pro-euro that Brown at least).

The reason is, that the global economic situation right now is very uncertain. Even though the tests are getting closer to being met (although still not yet as making IR match will stuff up exchange rate and vice-versa) even if these so-called tests are met, I personally have a sixth one:

The economic situation of the rest of Europe and the UK isn't one of these tests. Either party could be in recession and the tests could be passed. Until this economic downturn has blown over it would be folly to introduce such a major change (because if either party enters recession, its then that dramatic interest rate changes occur).

Btw, any guess as to the PC of this thread by the time that bill of yours is real?

[Hazir]

Wow, it seems we're getting a pointer as towards a changed attitude in this article :

By George Trefgarne and Benedict Brogan (Filed: 15/08/2001)


GORDON BROWN has ordered the Treasury to begin assessing his five economic tests for joining the euro, in an operation involving hundreds of civil servants across Whitehall.


Click to enlarge
The existence of the operation to prepare what are described as "voluminous documents", examining all the relevant issues on scrapping the pound, was admitted by the Treasury last night. A source involved in the work said "huge numbers" of officials from the Treasury and other departments are contributing to the process.

Mr Brown set the tests in 1997. They are designed to measure whether the British economy has converged with the euro zone. Tony Blair has said that an assessment would be undertaken within two years of the last general election. News that the work is already under way is bound to excite speculation that the Chancellor and Mr Blair are preparing to announce plans for a euro referendum.

Sources close to Mr Brown insisted it was just preliminary "technical work" and that the actual assessment of the tests had not started but an official Treasury spokesman confirmed the work had begun, and claimed it had already been announced.

The spokesman said: "The Chancellor has said that preliminary work is being done. People at the Treasury are looking at things like the performance of the euro area and the UK economy. They are also looking at what lessons we can learn from the National Changeover Plan, which was launched in 1997."

The spokesman claimed that the Chancellor had revealed the commencement of work on the tests in his Mansion House speech six weeks ago. However, the speech's text does not say this. Mr Brown told his audience at the dinner: "We cannot pre-judge the tests." He also said: "We are committed early in the next parliament to making an economic assessment of the case for British membership."

Another Whitehall source said the work had not been announced publicly. But, he added: "This is the worst-kept secret in Whitehall. I cannot understand why it has not come out before." The tests are designed to see if the British economy has converged with Europe.

Officials involved in the assessment believe that, far from gearing up for a referendum, the Chancellor is aiming to "park" the issue. One said that the depth of the research being done means that "almost any answer may be found in the results". The Chancellor has said the tests must yield "a clear and unambiguous case" for joining the euro.

The source said this was a very high threshold and that the inconclusive answers would allow him to say the referendum should be put on hold for the moment. "He can say we have been thorough, we are working hard towards joining, but we are not yet ready."

One civil servant said: "Anybody who claims to know exactly what is in the Chancellor's mind on the politics of this subject is simply wrong."

The assessment is being co-ordinated by Gus O'Donnell, the second permanent secretary at the Treasury. He is one of the most senior Whitehall mandarins, who served as John Major's press secretary, and is the director in charge of the Treasury's macro-economic and international policy making department.

About 150 staff report to him and most of those are understood to have some input on the work on monetary union. Mr O'Donnell is said to have begun the work about a month ago but he was not available for comment yesterday because he is on holiday.

[Hazir]

Originally posted by RandBlade
Btw, any guess as to the PC of this thread by the time that bill of yours is real? HUH ?

[Croi Makin]

I'm not taking the time to read all this so: What the heck are you guys arguing about?

Croi

[RandBlade]

Well that certainly is interesting. I like this one though: "One civil servant said: "Anybody who claims to know exactly what is in the Chancellor's mind on the politics of this subject is simply wrong." "

My final comment, was how many posts do you think we'll have made in this thread, by the time the euro currency (like the one in your sig) is real, next year.

Croi, we're debating anything to do with the euro, in particular should Britain join?

[Hazir]

Randblade, that really depends on when your government actually DOES something. If they keep dodging the question it could go real high, if the referendum is around the corner I don't think we'll get past the 300.

[RandBlade]

There's no chance at all of a referendum being held before the end of the year. Once the time is right, a while will be needed before actually calling the referendum, to convince the public.

And there's no chance at all for any unofficial campaigning until the Tory leadership race is over.

Heard an interesting idea in a newspaper. If Clarke wins the Tory leadership race, then Blair could next election (4-5 years time) campaign on the issue of the euro. Then the Tories will be in real trouble, as Clarke would either have to campaign against something he so publicly believes in, or accept a Labour Campaign pledge, against the wishes of his party members.

I'd certainly hope that wouldn't happen, but it would almost assure Blair of winning the election if it did ...

[RandBlade]

Did you here the latest unemployment figures for the UK? Down once again, we're now down to 3.2%

Thats practically 'full employment' (ie the point you reach when the rate can't get any lower due to unavoidable 'natural unemployment', said to be 3%)

Gee, we're really taking a beating by not being in the euro right now, aren't we?

Manufacturing lost 110k jobs, services created 240k

[Hazir]

Originally posted by RandBlade

Heard an interesting idea in a newspaper. If Clarke wins the Tory leadership race, then Blair could next election (4-5 years time) campaign on the issue of the euro. Then the Tories will be in real trouble, as Clarke would either have to campaign against something he so publicly believes in, or accept a Labour Campaign pledge, against the wishes of his party members.
...
Well since Blair obviously cares more for being in power than the interest of the nation that wouldn't surprise me.

As for the full employment thingy, we've known that for a couple of years now. It's a guaranteed way to drive up inflation, and it makes it extremely difficult for employers to find people. In the month july we had 216.000 job openings with 132.000 jobless people.

Oh, and according to a British research institute the Netherlands is the best country in the world to invest in.

[Hazir]

Niall Fitzgerald repeated, tonight in Hardtalk with Tim Sebastian, that it is better for the UK to be in the €uro because that is the only way he sees Brittain can be a fully functional and leading member in the EU.

Even though things seem nice and pretty at the moment, you can't sit still and just stop thinking. Sebastian reiterated that Britain is the biggest international investor and the biggest recipient of FDI so it really doesn't need to be in the €uro. Fitzgeralds answer to that was that investment decisions take about 2-3 years to take effect. And that the investment you see today is the result of decisions made at a time it seemed certain Britain would go into €uro during this cabinet. If the picture changes to Britain staying outside of €uro that will make for a totally different investment environmnet.

[Hazir]

The countdown continues : 130 days to go till €-day

Guardian Newspaper


New Euro Coins Begin Trip in Italy

Friday August 24, 2001 8:30 pm


ROME (AP) - Some 7.2 million newly minted euro coins were loaded aboard two heavily armored trains and a tractor-trailer Friday to begin a journey to distribute the new currency throughout Italy.

The euro will begin circulating Jan. 1, 2002 in the 12 European Union countries that have adopted it.

Other euro-points have also adopted tight security as the transportation of the new currency starts. France this week shipped out more than 100 tons of newly minted euros under heavy guard to warehouses. French banks will soon receive the coins.

In Italy, the trains and truck were scheduled to travel through the night and arrive in Milan on Saturday morning, then embark on the second leg of their journey to 15 regional distribution centers.

Within the next few months, 50 armored trains and 200 trucks will be distributing the coins throughout the country.

The distribution of euro bills is also beginning, but Italy's central bank, the Bank of Italy, refused to provide details. French officials were similarly secretive about bill distribution that was under way there.

``Information about bank note distribution is being kept secret for security reasons,'' said Paolo Orsi, a Bank of Italy spokesman.

Each country that has adopted the euro has its own version of the coins. In Italy, the two-euro coin bears an image of the poet Dante and the one-euro coin shows a drawing by Leonardo da Vinci. There are also coins worth 50, 20, 10, five and two cents as well as a one-cent coin.

The euro is currently worth just under a dollar.

For the last year or so, Italians have been getting a sense of euro prices since utility bills and bank statements routinely list a euro-equivalent alongside the cost in lira. But many stores still post lire prices prominently and leave euro prices for the small print.

The Italian postal service said Italian consumers and merchants will start getting euro ``starter'' kits in mid-December to help them get familiar with the new currency's look and feel.

Other countries are also working on ways to ease adjustment to the new currency system.

In Belgium on Friday, police unions and the government reached an agreement on overtime payments and holiday compensation, averting the threat of police strike during the year-end holiday time, just when the euro goes into use.

The government agreed to pick up the tab for overtime for certain duties, including guard duty for the euro's distribution
[SIZE=3][SIZE=1]

[Dragon Revisited]

I'm being very lazy here, because I'm sure this has already been answered somewhere in the 200+ posts on this thread ... but will the currencies of the participating nations be phased out by the Euro?

Probably a silly question, because I assume it will, but those wacky Europeans ...

[Hazir]

Yes in the period from januari 1st 2002 till february 28th 2002 all present currencies of the participating countries will cease to be legal tender. Depending on the country you will have a number of years to change your old coins and notes. Although in general after june 30th you'll have to refer to the Central Bank of the issuing country.

So that means Austrian Schilling, Belgian Frank, Dutch Guilder, French Franc, Finnish mark, German Mark, Greek Drachma, Irish Punt, Italian Lira, Luxemburg Frank, Portugese Escudo and Spanish Peseta will be withdrawn from circulation. All notes and coins will be destroyed.

[Hazir]

Hehe, I just noticed I will be outside of Europe on the day they are going to have a formal presentation of the new €uro notes on thursday.

[Dragon Revisited]

So how long do you plan to be gone? You know ... just in case there's big news out of Turkey during your stay. ;)