The euro debate: pros and cons
Pro- euro:
George Eustice, Director of the No Campaign:
“This is the right decision for Britain – the time is not right to join. The euro isn’t working for those countries already inside the currency, with Germany on the brink of recession, unemployment rising and eurozone growth half the level in Britain.”
- Trade with the UK’s euro partners could grow between 5% and 50% over 30 years if the UK joins the euro
- The UK could be between 5% and 9% richer if it joins the euro (and trade grows at the upper end of expectations)
- Maybe consumers will benefit from increased competition in the UK service sector
- Prices should come down, leading to greater transparency and competitiveness
- Both large and small companies would benefit from diminished exchange rate volatility, especially in the manufacturing sector
- Holidaymakers and travelers would no longer incur the costs of currency conversion when traveling between Britain and other euro countries.
Anti-euro:
Sir Richard Branson, chairman, Virgin Group
“Having a separate currency from the consumers and competitors of our largest market is a big barrier to success.”
- A common European interest rate could lead to instability in the UK housing market
- Evidence shows that London has participated fully in euro financial markets, since the introduction of the single currency
- The UK financial services sector will remain competitive in or out of the euro? Uk doesn’t “need” the euro
- Some retailers would use the introduction of the euro to round-up prices
- The Bank of England will lose its power to the European Central Bank in Frankfurt
- The strength of the euro was supposed to be guaranteed by ensuring that the economies of all the participating countries were in a healthy state and had significantly converged at the time of joining by insisting that they met strict entrance criteria. In reality some members don’t meet the required budget deficit figure of 3% of GDP