A poll has shown that 71% of the British people are opposed to ditching the pound and joining the euro.
And, in the second article, Peter Oborne shows why it would be suicide for Britain to join the euro.
Majority of voters still oppose Britain joining the euro - 10 years after it was introduced
By Kirsty Walker
02nd January 2009
Daily Mail
The euro has almost achieved parity with the pound
Three out of four Britons remain opposed to joining the euro, a poll has revealed.
Around 71 per cent said they are against ditching the pound to sign up to the European single currency, which was introduced ten years ago.
The ICM survey for BBC Radio 4's World At One programme found just 23 per cent would say yes to the currency if it were put to a referendum.
The research comes at a time when the value of sterling has plummeted against the euro.
And yesterday Shadow Foreign Secretary William Hague told the Daily Mail that the Tories would never take Britain into the euro.
He said: 'Giving up our currency would mean we would lose a vital tool for trying to run the British economy in the interests of the people of Britain - and that means an unacceptable loss of the independence of this country.'
Despite the euro climbing to a record high of 98p against the pound this week, the survey also revealed the rise has done little to improve the currency's image in the eyes of ordinary voters.
Some 69 per cent said it made no differenceto whether Britain should join the single currency, while 15 per cent said it made them more keen on signing up.
Europe Minister Caroline Flint said Labour was concentrating on the problems surrounding 'first order' issues, such as housing. 'The issue is financial stability and packages for growth,' she added.
But Dr John Whittaker, UK Independence Party MEP for the North-West and an economist at Lancaster University, said: 'It might be the euro's 10th birthday but we would be crazy to join the party.
'The credit crunch has exposed its real weakness. While all economies are suffering, some eurozone countries are now in an impossible position.
'What these countries need is lower interest rates and devaluation but, stuck in the euro, there is nothing they can do.'
The pound may be in trouble but don't be fooled by the euro gloaters. Their bogus currency will never see its 20th birthday
02nd January 2009
Daily Mail
Peter Oborne
This week marks the tenth anniversary of the euro - and every eurocrat in existence is hailing the single currency as an exquisite success.
According to European Commission president Jose Manuel Barroso, the euro has helped create 16 million jobs. The French finance minister Christine Lagarde hails it as 'a zone of security and stability'.
Joaquin Almunia, the European Commissioner for Economic and Monetary Affairs, declares that: 'The euro has become the symbol of EU identity and is protecting us against the tremendous external shocks that we have had to cope with since the summer of 2007'.
Attack: The euro is being tested for the first time - and it won't survive the mauling
Meanwhile, there are many within the British political and business elite - among them Business Secretary Peter Mandelson and former Prime Minister Tony Blair - who secretly wish Britain was in the euro, and believe we made a terrible mistake when we refused to join in 1999.
To be fair, the europhiles do appear to have reason to celebrate.
Consider these statistics. Following yesterday's accession of the Eastern European state of Slovakia, there are now 16 members of the single currency, compared to a mere 11 in 1999. This means an amazing 330 million people now use the euro as their national currency - more than the population of the U.S.
No wonder, say the eurofanatics, that it has strengthened over the past few years and now stands at parity with the pound sterling - stronger than it has ever been.
Not merely that, there are also those who now believe that the euro will soon overtake the dollar as the world's reserve currency. Indeed, even the villain in the latest James Bond film, Quantum Of Solace, chooses to pay his debts in euros because, so he says: 'The dollar isn't what it was.'
But the truth is very different. As even its strongest supporters must admit, the new currency was mollycoddled during a decade of benign global economic conditions - and only now is being tested for the first time. And it is already showing signs of being unable to survive the strain.
Indeed, far from being the staggering success its supporters claim, the euro-zone is already inflicting huge damage on the nations within it. Many currency market experts believe that some of these struggling members may be forced to peel away from the euro - with devastating consequences for the rest of the world.
The greatest problems, in the short term at least, are in the four Mediterranean economies known as the PIGS - Portugal, Italy, Greece and Spain.
For each of these countries, the euro has already proved a disaster. Put simply, most of the PIGS are so heavily indebted that the market no longer believes they will be able to repay their borrowings.
Normally, if a country falls into too much debt, it can devalue its currency, essentially devaluing its debt burden - this is exactly what Britain has done over the past few months. In the euro-zone, however, the currency's value is set centrally.
This means the only way out for the struggling PIGS is to crash out of the euro, default on their debt and start again. At the start of 2009, this prospect is beginning to cast a huge shadow over the global economy, for the sums involved are huge.
Take the terrifying case of Greece, which was an economic basket case even before it entered the euro, and is even more of a shambles today.
Greek unemployment is soaring, and its current account deficit is a whopping ten per cent of gross domestic product (Britain's deficit is bad enough at three per cent).
But the largest problem is Greek government debt, which stands at a monstrous 94 per cent of gross domestic product - and rising fast.
Already investors have reached the obvious conclusion that there is a very high chance that the poor old Greeks will never be able to repay their debts. That is why the markets now demand to be paid an extra two per cent in return for lending to Greece compared to Germany, even though both countries denominate their debt in euros.
The brutal truth is that if the markets really believed the euro was going to survive, Greek and German debt would cost the same.
But soaring debt is not the worst of Greece's problems. The economy has tilted into recession, and unemployment has risen. Greece desperately needs interest rates to fall - but the European Central Bank is refusing to cut them. The effects are being felt on the streets, and the past few months have seen the worst riots in Athens since the country was a military dictatorship in the Seventies.
There have not yet been riots in the other PIGS - but Portugal-Italy and Spain are all heading for trouble. Spain, thanks almost entirely to the misguided policies of the European Central Bank, is now an economic disaster zone.
In the early years of the euro, the ECB kept interest rates far too low - fostering an inflationary property boom which has ended in inevitable collapse.
Now rates are much too high for Spain's broken economy. The Spanish jobless figure, thanks to the country's membership of the euro, is already 13 per cent. It is expected to approach a truly unbelievable 20 per cent by2010.
Things are already bad enough in Britain, where the jobless rate stands at six per cent.
At least Spain's public debt is relatively manageable, but that is not true of the remaining PIGS - Italy's government borrowing is actually larger than its gross national product.
The truth is that all the PIGS are paying a terrible price for their membership of the euro. If they had kept their own currencies, they would be able to use the traditional tools of economic management. They would set their own interest rates and they could inflate or deflate their national currencies as circumstances demanded.
As it is, however, governments in the euro-zone are utterly powerless to do anything about the menace of joblessness and economic collapse. And to appreciate how damaging that is, one only has to contemplate the fate Britain would now be facing if had we made the mistake of joining a decade ago.
For starters: Greece is just the first of the four major Mediterranean economies to turn into an economic basket case
In the early years, we would have suffered the problems of the poor, hapless PIGS.
The interest rates set by the European Central Bank would have been far too low - meaning the credit boom of the past decade would have been even more inflationary and damaging than was actually the case.
And the recession would have bitten far deeper. Interest rates have stayed far higher on continental Europe, driving millions who would otherwise have a job out of work.
And our currency would have been tied to the strong euro, rather than being allowed to depreciate, find its own level, and give vitally needed assistance to exporters.
Bad though the recession already is, it would have been far worse for Britain had we - as Tony Blair so desperately wanted - joined the euro.
That is why, as the euro celebrates its tenth anniversary, I predict two things.
First, it will never reach its 20th anniversary. The drachma, the lira, the peseta and the Portuguese escudo (and the Irish punt - Ireland can be regarded as an honorary PIG) will all make a return as the PIGS plunge for the exit.
Second, the collapse of the euro-zone will not be a peaceful process. Expect the European political elites to fight to save their beloved single currency.
Eventually, however, their citizens will take to the streets and force their hands. In Britain we can thank our lucky stars we do not have to go through the same painful and bloody crisis.
Gordon Brown had a mixed record as Chancellor of the Exchequer, and bears a heavy share of the responsibility for the recession. But he did one thing for which we should all be thoroughly grateful - he kept us out of the European single currency.
dailymail.co.uk
And, in the second article, Peter Oborne shows why it would be suicide for Britain to join the euro.
Majority of voters still oppose Britain joining the euro - 10 years after it was introduced
By Kirsty Walker
02nd January 2009
Daily Mail
The euro has almost achieved parity with the pound
Three out of four Britons remain opposed to joining the euro, a poll has revealed.
Around 71 per cent said they are against ditching the pound to sign up to the European single currency, which was introduced ten years ago.
The ICM survey for BBC Radio 4's World At One programme found just 23 per cent would say yes to the currency if it were put to a referendum.
The research comes at a time when the value of sterling has plummeted against the euro.
And yesterday Shadow Foreign Secretary William Hague told the Daily Mail that the Tories would never take Britain into the euro.
He said: 'Giving up our currency would mean we would lose a vital tool for trying to run the British economy in the interests of the people of Britain - and that means an unacceptable loss of the independence of this country.'
Despite the euro climbing to a record high of 98p against the pound this week, the survey also revealed the rise has done little to improve the currency's image in the eyes of ordinary voters.
Some 69 per cent said it made no differenceto whether Britain should join the single currency, while 15 per cent said it made them more keen on signing up.
Europe Minister Caroline Flint said Labour was concentrating on the problems surrounding 'first order' issues, such as housing. 'The issue is financial stability and packages for growth,' she added.
But Dr John Whittaker, UK Independence Party MEP for the North-West and an economist at Lancaster University, said: 'It might be the euro's 10th birthday but we would be crazy to join the party.
'The credit crunch has exposed its real weakness. While all economies are suffering, some eurozone countries are now in an impossible position.
'What these countries need is lower interest rates and devaluation but, stuck in the euro, there is nothing they can do.'
The pound may be in trouble but don't be fooled by the euro gloaters. Their bogus currency will never see its 20th birthday
02nd January 2009
Daily Mail
Peter Oborne
This week marks the tenth anniversary of the euro - and every eurocrat in existence is hailing the single currency as an exquisite success.
According to European Commission president Jose Manuel Barroso, the euro has helped create 16 million jobs. The French finance minister Christine Lagarde hails it as 'a zone of security and stability'.
Joaquin Almunia, the European Commissioner for Economic and Monetary Affairs, declares that: 'The euro has become the symbol of EU identity and is protecting us against the tremendous external shocks that we have had to cope with since the summer of 2007'.
Attack: The euro is being tested for the first time - and it won't survive the mauling
Meanwhile, there are many within the British political and business elite - among them Business Secretary Peter Mandelson and former Prime Minister Tony Blair - who secretly wish Britain was in the euro, and believe we made a terrible mistake when we refused to join in 1999.
To be fair, the europhiles do appear to have reason to celebrate.
Consider these statistics. Following yesterday's accession of the Eastern European state of Slovakia, there are now 16 members of the single currency, compared to a mere 11 in 1999. This means an amazing 330 million people now use the euro as their national currency - more than the population of the U.S.
No wonder, say the eurofanatics, that it has strengthened over the past few years and now stands at parity with the pound sterling - stronger than it has ever been.
Not merely that, there are also those who now believe that the euro will soon overtake the dollar as the world's reserve currency. Indeed, even the villain in the latest James Bond film, Quantum Of Solace, chooses to pay his debts in euros because, so he says: 'The dollar isn't what it was.'
But the truth is very different. As even its strongest supporters must admit, the new currency was mollycoddled during a decade of benign global economic conditions - and only now is being tested for the first time. And it is already showing signs of being unable to survive the strain.
Indeed, far from being the staggering success its supporters claim, the euro-zone is already inflicting huge damage on the nations within it. Many currency market experts believe that some of these struggling members may be forced to peel away from the euro - with devastating consequences for the rest of the world.
The greatest problems, in the short term at least, are in the four Mediterranean economies known as the PIGS - Portugal, Italy, Greece and Spain.
For each of these countries, the euro has already proved a disaster. Put simply, most of the PIGS are so heavily indebted that the market no longer believes they will be able to repay their borrowings.
Normally, if a country falls into too much debt, it can devalue its currency, essentially devaluing its debt burden - this is exactly what Britain has done over the past few months. In the euro-zone, however, the currency's value is set centrally.
This means the only way out for the struggling PIGS is to crash out of the euro, default on their debt and start again. At the start of 2009, this prospect is beginning to cast a huge shadow over the global economy, for the sums involved are huge.
Take the terrifying case of Greece, which was an economic basket case even before it entered the euro, and is even more of a shambles today.
Greek unemployment is soaring, and its current account deficit is a whopping ten per cent of gross domestic product (Britain's deficit is bad enough at three per cent).
But the largest problem is Greek government debt, which stands at a monstrous 94 per cent of gross domestic product - and rising fast.
Already investors have reached the obvious conclusion that there is a very high chance that the poor old Greeks will never be able to repay their debts. That is why the markets now demand to be paid an extra two per cent in return for lending to Greece compared to Germany, even though both countries denominate their debt in euros.
The brutal truth is that if the markets really believed the euro was going to survive, Greek and German debt would cost the same.
But soaring debt is not the worst of Greece's problems. The economy has tilted into recession, and unemployment has risen. Greece desperately needs interest rates to fall - but the European Central Bank is refusing to cut them. The effects are being felt on the streets, and the past few months have seen the worst riots in Athens since the country was a military dictatorship in the Seventies.
There have not yet been riots in the other PIGS - but Portugal-Italy and Spain are all heading for trouble. Spain, thanks almost entirely to the misguided policies of the European Central Bank, is now an economic disaster zone.
In the early years of the euro, the ECB kept interest rates far too low - fostering an inflationary property boom which has ended in inevitable collapse.
Now rates are much too high for Spain's broken economy. The Spanish jobless figure, thanks to the country's membership of the euro, is already 13 per cent. It is expected to approach a truly unbelievable 20 per cent by2010.
Things are already bad enough in Britain, where the jobless rate stands at six per cent.
At least Spain's public debt is relatively manageable, but that is not true of the remaining PIGS - Italy's government borrowing is actually larger than its gross national product.
The truth is that all the PIGS are paying a terrible price for their membership of the euro. If they had kept their own currencies, they would be able to use the traditional tools of economic management. They would set their own interest rates and they could inflate or deflate their national currencies as circumstances demanded.
As it is, however, governments in the euro-zone are utterly powerless to do anything about the menace of joblessness and economic collapse. And to appreciate how damaging that is, one only has to contemplate the fate Britain would now be facing if had we made the mistake of joining a decade ago.
For starters: Greece is just the first of the four major Mediterranean economies to turn into an economic basket case
In the early years, we would have suffered the problems of the poor, hapless PIGS.
The interest rates set by the European Central Bank would have been far too low - meaning the credit boom of the past decade would have been even more inflationary and damaging than was actually the case.
And the recession would have bitten far deeper. Interest rates have stayed far higher on continental Europe, driving millions who would otherwise have a job out of work.
And our currency would have been tied to the strong euro, rather than being allowed to depreciate, find its own level, and give vitally needed assistance to exporters.
Bad though the recession already is, it would have been far worse for Britain had we - as Tony Blair so desperately wanted - joined the euro.
That is why, as the euro celebrates its tenth anniversary, I predict two things.
First, it will never reach its 20th anniversary. The drachma, the lira, the peseta and the Portuguese escudo (and the Irish punt - Ireland can be regarded as an honorary PIG) will all make a return as the PIGS plunge for the exit.
Second, the collapse of the euro-zone will not be a peaceful process. Expect the European political elites to fight to save their beloved single currency.
Eventually, however, their citizens will take to the streets and force their hands. In Britain we can thank our lucky stars we do not have to go through the same painful and bloody crisis.
Gordon Brown had a mixed record as Chancellor of the Exchequer, and bears a heavy share of the responsibility for the recession. But he did one thing for which we should all be thoroughly grateful - he kept us out of the European single currency.
dailymail.co.uk