Indeed, No, No, No.
I am surprised that some of the people writing into this site think joining the Euro might now be a good idea.
When Euromania was at its height I wrote a book entitled “Just say No”. It set out 100 reasons why abolishing sterling would be a bad idea, for the EU as well as for the UK.
From the UK point of view it will always be a bad idea, for all those of us who want to keep a democracy in these islands. The electorate needs to be able to appoint and sack the people who make the big decisions which affect our economic well being. That includes keeping our own power to determine interest rates, how much currency is in circulation, and our budget deficit or surplus.The fact that our governemnt has been making a mess of using those powers should not dim our belief in keeping them here, under democratic control.
The UK economy is too big, and too dependent on global trade and dollar business, to be a comfortable part of the Eurozone. Whereas today some of the strain on the economy can be taken by changes in the exchange rate, were we to join the Euro more of the strains would be taken in lost jobs and lost investment.
In order to join the Euro, a country is meant to keep its currency stable against the Euro for a period of years to show it has converged with the others. Sterling has moved from 71p to the Euro, to 60p to the Euro to 83p to the Euro now – wide fluctuations showing our economy has not converged, and is not about to. Our miserable experience in the Exchange Rate Mechanism showed how much damage to jobs and asset values pretending we had converged could cost. Why do that again?
A country also needs to keep its deficit down to a maximum of 3% of National Income. Our Treasury is now forecasting an eye watering 8% of National Income. Whilst I would like our deficit to be reduced, slashing it from 8% to 3% would be too far too fast requiring in the short term crippling tax rises as well as spending cuts in a way which could damage the economy further.
Euroland would be foolish to want the UK in at any price. Just as the UK destablised and then wrecked the Exchange Rate Mechanism, so in this condition we could damage the Euro. Euroland is already struggling to discipline or live with the excesses of Italian, Spanish and Greek economic policy. Incorporating sterling would be a bridge too far, and would end in disaster.