Britain and the Euro

Paper Summary:

This paper explores the pros and cons of Britain joining the euro. It discusses the impact that the euro will have on the British economy, politics and business including its potential impact on interest rates, exchange rates, inflation, trade, foreign investment, jobs and national identity. It concludes with how the author believes, that for the time being, Britain should stay out of the euro since the U.K. currently has a thriving economy and joining when the effects on the euro are unknown is too risky.

From the Paper:

"Currently Britain is enjoying a period of economic growth and stability which has been achieved by being able to adopt the economies appropriate to her circumstances. In particular, the setting of interest rates that are appropriate to the current economic conditions. By joining the single currency, Britain would lose control of monetary policy (interest rates, etc) to the European Central Bank in Frankfurt. Therefore in the future Britain could endure rates inappropriate to the current phase in the economic cycle. So interest rates which are suitable for one country may be unsuitable for the economy of another (i.e. one country may be in recession while another is in boom)."

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