David Sumberg MEP
Date: 20/05/2003
My fellow North West MEP Gary Titley has been making much noise in support of joining the Euro. But though he is well meaning joining the Euro would spell economic disaster for the UK. I do agree with Gary, however, when he says a decision has to be made on Euro entry.
It is critical Tony Blair calls a referendum immediately.
More dithering will only trigger massive economic instability.
My argument against the euro can be made in nine straightforward points:
1. The British economy is different to the Eurozone and needs different policies. We do more of our trade (57 percent) with countries outside the Eurozone, and we receive large amounts of our investment from the US. The Bank of England currently sets interest rates according to the need of the British economy. Inside the euro we would have to accept a single interest rate set by the European Central Bank in Frankfurt which would usually be wrong for us.
2. We don't need to join the euro to trade with Europe. Since the launch of the euro, the value of British trade with the EU has risen by 25 percent.
3. The last time we linked our currencies with Europe, in the Exchange Rate Mechanism (1990-92), was a disaster. Unemployment doubled and we lost 100,000 businesses. We don't want to make the same mistake.
4. A European currency needs a European tax to make it work - this means higher taxes.
5. The British economy is doing well outside the euro. Unemployment in the Eurozone is nearly double the British rate. We have the lowest inflation in the EU and we receive the most foreign investment in the EU - more than France and Germany combined.
6. We do more of our trade in dollars than euros. If we joined the euro, which has been highly volatile against the dollar, it would destabilise British trade.
7. The major euro economies have bankrupt state pension systems. Joining the euro would be like opening up a joint bank account with people going bust.
8. The Government should be doing what it was elected to do - sorting out our public services - not wasting time and taxpayers' money on the euro. The European Commission has warned if Britain joins the Euro it will we have to cut spending on public services by £10 billion.
9. Now, we can vote out
politicians if they perform badly. Inside the euro, economic decisions would
be made by unelected officials in Bussels and Frankfurt.