web analytics

Nosemonkey's EUtopia

In search of a European identity

An unpopular view: The UK missed out by not joining the euro

Hell, this would have been an unpopular view at most stages in the last decade and a half, even when it looked like the eurozone was doing well. So it’s a brave British politician indeed to make the argument that Britain should have joined the euro – this week of all weeks… Hats off to London Labour MEP Mary Honeyball for having the guts to say it (emphasis mine – and emphasised because those are the bits I agree with):

“Although it’s by no means all set to go, it does look as if the 17 Eurozone countries are coming closer together and accepting the need for a central Eurozone authority look at budgets and fiscal policies.

“Britain as ever is not part of what promises to be the most important European project since the formation of the Common Market. Unfortunately 50 years or so later, we still don’t get it. Europe is where the future lies. If Britain has any hope of being more than a bit player outside our own shores, we have to be a leader in the European Union. Today that means being up there with France and Germany in the Euro. Very unfortunately we did not join, and this blog post explains just how serious a missed opportunity this will turn out to be.

“To add salt to the wounds, if Britain had joined the Euro, there is little doubt we would have been at the top table with France and Germany. Yes, we would have suffered from the current crisis in the Eurozone countries, but thanks to dogmatic Tory Chancellor George Osborne and Prime Minister Cameron we are suffering a double dip recession anyway, even outside the single currency. The Euro was always a political as well as an economic project and the UK has comprehensively failed to grasp the political opportunity.

As it stands, Britain is again on the sidelines, watching nervously as a whole bunch of its major trading partners hover on the brink with no power to influence them.

I’m certainly not as confident as Ms Honeyball that history will show Britain’s decision to stay outside to have been a mistake (I’ve never been fully convinced of the arguments in favour of joining – though I tend to like the basic *concept* of an EU single currency, I was never convinced that the euro was being set up sensibly). But the counterfactuals thrown up by the idea of Britain having joined the euro from day one are frascinating. Would the sloppy rules and lack of sensible structures have been allowed through if the more cautious Britain had been part of the discussions? Would the presence of another major economy in the eurozone mix have lent greater strength to the whole? Would the presence of the UK have helped prevent German dominance? Would the UK’s apparent preference for quantitative easing to tackle downturns have pushed the ECB into printing money? Or would it just have meant that Britain was even more economically screwed than she has ended up on the outside?

4 Comments

  1. Honeyball – serial EU trougher – bigs up the fast failing Projekt.

    In other news, Ursine continue to defecate in arboreal regions.

    Kind regards

  2. The ECB would have doomed us.

    We would have had a worse financial crisis because the ECB would have refused to use the Bagehot playbook in time. It would then have crushed internal demand. We would be really screwed.

    I’m not a fan of the BOE but the ECB is the worst central bank in the world. Look at Draghi today, he’s blackmailing elected politicians, failing to fulfil his mandate and screwing millions of unemployed.

    I haven’t a huge problem with the UK being a bit player on the international stage. Maybe we could do with less influence. Although I do tend to think we’d improve a hegemonic Europe. Hmm..

  3. Perhaps, maybe, in the medium-term the UK will regret losing influence over the political project. In the immediate, I’m pretty sure had Britain been in the euro, the dysfunctions and over-indebtedness of its economy (largely due to bailing out the banks’ “imaginary economy) would have made it fit snugly among the GIIPS. Maybe its economics would have been directly administered by Brussels (and Berlin… sshh!) by now.

  4. Had we gone in in 2002, UK politics would have made us a super-Finland when it came to negotiating bailouts, emergency measures, etc., not least because large parts of the governing Conservative party would be desperate to “withdraw from the Euro”.