Re: Re: Should the UK join the Eurozone?


West Germany were an economic powerhouse even before the Euro and were referred to as an economic miracle even then. They have many traits to be admired when it comes to their work ethic and unlike in Britain, their trade unions always saw themselves as partners with the bosses in making their companies perform well rather than as adversaries, out to get as much of the pie for themselves as they could..

Reunification slowed them down for many years but they were overcoming that and then came the Euro.

As was said earlier in this thread, Germany took full advantage of the Euro and it’s relative cheapness to what the DMark would have been has been an enormous advantage for their exporters. Just look at the number of German cars you see in the PIIGS and Britain who really shouldn’t have been able to afford that many, but could due to cheap money and, in the case of the PIIGS, the fact they shared the Euro currency with Germany.

It has been asked why Britain could not now join the Euro and emulate the German success story. I suggest the answer is that if we were capable of emulating them we would have done so years ago. Joining the Euro would not make one jot of difference to that.

Personally, I always wanted Britain to be in the Euro for selfish reasons i.e. holidays, foreign purchases etc. but I now see how wrong I was. The Euro is fundamentally flawed, which wasn’t a problem in the boom years but is a waking nightmare now. The Euro can only work long term if fiscal and political union in Europe becomes a reality. I see no way of that happening at this time.

This week there have been several articles which are reporting that it is widely accepted in financial circles (press and financial institutions) that 2012 will be the make or break year for the Euro.

Here are three, all from the BBC:

In summary something has got to give. Either Germany bites the bullet and bails out the rest of Europe by accepting the idea of Eurobonds and the ECB as lender of last resort in which case the Euro survives or they don’t and the Euro goes pop, either by Germany leaving it or the rest of Europe defaulting on their loans and making the Eurozone a no go area for the rest of the world.