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UK dollar change?

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  • duplix
    replied
    Originally posted by paulc
    The problem with the euro is the loss of control that the UK would suffer with regard to its economy. The Bank of England would no longer set interest rates - it would be done by the European Central Bank (ECB) and the rate they set may not be 'right' for the UK economy.
    The Bank of England would still have some power in controling the interest rate. Like all EMU members have.

    I have done some studying on single currency zones. Ill try and explane the basics.
    The economic advantages of a single currency are mixed. Lets say two counties, the UK and France, have a single currency. The UKs economy is booming and Fs is in a slump. Then a common CB would set an interest not 'right' for both countries. This would result in the UKs economy to overheat, and F would not be able to recover. There are ways to overcome this problem, even with a single currency (labour mobility, wage/price increase/decrease, deficit spending,...).
    On the other hand, when both UKs and Fs economy are in a bad shape, the interest rate would be right for both countries. With two different currencies, both UK and F would compete agains each other (competitive devaluations and stuff like that to promote exports) and partly negating each others efforts. The result would be that recovery is slower than if they would have a single currency.
    Now, the cost/benefit of a single currency is the occurance of asymmetical shocks (first example) relative to symmetrical shocks (second one). And this is what Gordon Brown is trying to find out with his famous five indicators.


    It does seem (to me) that the EU has a set of rules which are ignored by certain countries if they do not like them and they are allowed to get away with it. Take BSE and British beef - the ban on the sale of british beef was lifted 3 years ago yet it is only in the last few months that it has been on sale in france - yet there are still cases of it appearing there.
    Well, why do you think they are called 'french'

    The UK is generally resentful of the EU because it the laws it passes seem to have a negative impact on the UK and its industry
    I dont really know the exact situation in the UK, but in Belgium politicians are frequently pointing at the EU if something has to be done against the general opinion ("Europe does not allow us to do that", "we have to, EU regulations",...). Its a way of avoiding taking responsability for taking unpopular (but most of the time necessary) measurements. But it gives Europa a bad image.

    - like the Common Agricultural Policy (CAP) which is something in need of desperate reform.
    Couldn't agree more.

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  • paulc
    replied
    The problem with the euro is the loss of control that the UK would suffer with regard to its economy. The Bank of England would no longer set interest rates - it would be done by the European Central Bank (ECB) and the rate they set may not be 'right' for the UK economy.

    There is also a massive mistrust of the European Commission as it is seen as an unelected, unpoliced and totally corrupt organisation. The EU commisioners themselves (the UK ones anyway) are failed politicians who were rejected by the UK voters only to land easy jobs with vast salaries and power over the UK. Neil Kinnock was a leader of the Labour party and managed to loose 2 general elections - yet he was given the job as commissioner. He has overseen the massive loans given to Air France and Iberia which were totally against the rules. He, along with the other commissioners were forced to resign over corruption allegations a few years ago (led by Jaques Santer) no charges have been brought against any of those people and some still hold positions of power.

    It does seem (to me) that the EU has a set of rules which are ignored by certain countries if they do not like them and they are allowed to get away with it. Take BSE and British beef - the ban on the sale of british beef was lifted 3 years ago yet it is only in the last few months that it has been on sale in france - yet there are still cases of it appearing there.

    It also means we would be handing control of our economy to people we cannot remove from power - unlike a government when we have the option to get rid of them every 4 or 5 years.

    The UK is generally resentful of the EU because it the laws it passes seem to have a negative impact on the UK and its industry - like the Common Agricultural Policy (CAP) which is something in need of desperate reform.
    CAP only benefits the french farmers at the expense of UK ones - just try buying a UK grown apple at your local supermarket - it may be more difficult than you think.

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  • AC_A340-500
    replied
    Teehehehe??
    yeah, it's an effort not to over-rely on green emoticons...

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  • JeffinDEN
    replied
    Teehehehe??

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  • AC_A340-500
    replied
    yea, that's a good one. I have a box full of 10,000 mark notes in my basement my Grandfather left me. Can you exchange them for me?
    Ummm....JeffinDEN: I said Deutschmark, not Reichsmark. Otherwise each one of those 10000 Mark notes would still be worth about $6000 USD. Maybe it's time you crack a history book. It's that square looking thing on the shelf next to all those wooden nickels of yours. Teehehehe!

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  • JeffinDEN
    replied
    Originally posted by AC_A340-500
    I kind of still wish we had the Deutschmark here in Germany. Now that was a stable currency.
    yea, that's a good one. I have a box full of 10,000 mark notes in my basement my Grandfather left me. Can you exchange them for me?

    Leave a comment:


  • AC_A340-500
    replied
    Not sure that the Euro can be called a "weak currency". Ok, it's been pretty low on average over the past few years, but seems to have recovered (as a result of the plummeting USDollar).

    Ok, do I think that the UK is at an economic advantage keeping the Euro? Doubt it. However, I think it's nice that the UK isn't giving in to "new world" pressures to accept the Euro.

    The biggest factor stopping a switch to the Euro is tradition. It's kind of like asking the Americans to switch from feet/pounds/gallons to the metric system. Some habits just die hard.

    I kind of still wish we had the Deutschmark here in Germany. Now that was a stable currency.

    I wouldn't mind hearing the opinion of a certain member of this forum...he's an economics major...but I'll wait for him to speak up.

    Leave a comment:


  • AEagle40
    replied
    Originally posted by kaddyuk
    Originally posted by Airigami
    Prime Minister Tony Blair seems to cautiously favour a future switch to the Euro, but Gordon Brown (Chancellor of the Exchequer) is definitely against it. In my opinion, it will happen, just not anytime soon.
    I dont know how I feel about the euro. I like it as an idea. but I dont want to use the same currency as the french!
    Good man...

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  • Airigami
    replied
    Prime Minister Tony Blair seems to cautiously favour a future switch to the Euro, but Gordon Brown (Chancellor of the Exchequer) is definitely against it. In my opinion, it will happen, just not anytime soon.

    Leave a comment:


  • pbateson
    started a topic UK dollar change?

    UK dollar change?

    Why the UK don't want to change to Euros from Pound?

    What's going on in UK the ppl get mad to change the dollar?
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