Should the UK have adopted the EURO ?

Hi

Back in the early days when the EURO was introduced in Europe the then government along with the banks

decided that if the UK were to join the common currency Bandwagon a reasonable rate of exchange would

be 65 pence =1 euro (a fact) . As we havent joined and now probably never will due to the turbulence in some

E.U economies  sterling has been see-sawing between its high of 1.65 euro to a low of nearly just 1 to the

pound thus creating  havoc with the markets.with imports and exports.The biggest factor for expats is the

uncertainty as to which way the currency will be tipping in the future affecting sterling pensions and so forth .

Today sterling is trading at 1.178 in the banks for small amounts and  circa 1.21 for large amounts,

a massive drop in a short space of time.when we thought sterling was going up and up.

In  short, had we joined at the time when the Euro was first introduced we would not have to worry about these

crazy whim fluctuations and we would all know where we stand..Needless to say some people have made a

nice little earner  on large transactions but i think these are confined to the money markets only.

Any thoughts or views on that?

 I don't think the banks and financial institutions care a lot about the exchange rate the expat gets.  By keeping your own currency, you can set interest rates to your benefit instead of a one size fits all.  The lowering of the pound, whilst bad for those of us living abroad, has been good for the UK as exports are cheaper and therefore more competitive.  

A monetary union is fine providing all members are on an equal footing.  Unfortunately, as recent events have shown, one poorly performing country can bring down the economy of the stronger ones.  With the euro, it has been several badly performing countries and the need for the stronger ones to prop them up is getting unsustainable.  

The absolute disaste of the UK joining the ERM back in 1990 and then crashing out of it (with the pound being hit very badly) should show the faults in this type of system.  IMO, if we'd joined the euro when it was launched we'd be in an even worse state than we are now and inflation in UK would be even higher.