Euro time for the UK?

Dannyboy83

This link/images show just how drastic the situation has become in the UK.
We are looking at a replay of the Weimar Republic or something approaching it.

1. What is the probability that the UK will now join the EMU and what are the barriers to a speedy entry in order to prevent collapse??
2. How long would it take the UK to enter?
3. What would be the effect of the UK within the EMU for Ireland?

Irelands trade partners
http://www.cso.ie/statistics/botmaintrpartners.htm
Great Britain and Northern Ireland
Imports 20,869.2
Exports 16,742.8

http://www.marketoracle.co.uk/Article7526.html

smallBiscuit

I'm not an economist so I don't know how good it would be for the UK to join the EMU, but it would cause murder here as the overcharging becomes even more noticeable. Personally I'd love it

thebman

Yeah I eagerly await it

About time I don't have to change currency because I drive too far north on the island.

Stubborn Brits.

Fluffybums

Based on those figures, I don't think Germany and France would let the UK in. Plus point for the UK, based Dannyboy's information, is that UK won't continue as a net contributor to the EU.:D

ArmaniJeanss

Dannyboy83 wrote: »

This link/images show just how drastic the situation has become in the UK.
We are looking at a replay of the Weimar Republic or something approaching it.

1. What is the probability that the UK will now join the EMU and what are the barriers to a speedy entry in order to prevent collapse??
2. How long would it take the UK to enter?
3. What would be the effect of the UK within the EMU for Ireland?

I believe that in order to join the Euro that a currency had to trade in a very narrow band against the Euro for 2 years from the date at which it makes the commitment to join the Euro. So by definitition after deciding the conversion rate it then has to maintain base interest rates the same as the Euro for that 2 years.

So the barriers to speedy entry are a) the 2 year wait which a currency has to go through to prove its stability and b) the current 1.25% difference between Euro and BOE interest rates and c) the doubt as to whether sterling would be stable enough for those 2 years to maintain the conversion rate.

Germany/france would possibly willing to make some exceptions to those rules (spcifically the 2 year rule) in order to get the UK on board.

Time Magazine

Dannyboy83 wrote: »

We are looking at a replay of the Weimar Republic or something approaching it.

No, we're not.

For one thing, you linked to a graph detailing a housing price crash. Prices are falling. You know, the opposite of inflation.

Weimarian inflation was measured in thousands of percent. British inflation will probably be less than 4% this year.

portomar

sterling was overpriced anyway, its merely a (severe) correction on the steep rise of recent years, and in that chart is dollar strength v sterling, and euro strength also. house price drop here would look even more pronounced if anyone was telling the truth about how much they are selling for. Debt thing doesn't rule them out as that's not gov debt it household (the real debt bit).

politically, can't see it happening. ever. the UK probably has the only economy in europe with any argument for staying out of the Euro, not saying they should but there is an argument, where as the reasons for the larger continentals are clear, and for the smaller ones...look at denmark, tiny country, major trading partners are euro, hence; they effectively have to peg to the euro, like being in it but not having a seat at the ECB and still having the pain in the ar*e of changing currency at borders. or even better look at iceland.... and if we'd have listened to some people we'd have stayed out. idiocy.

ArphaRima

Never underestimate the power of pride.

A lot of political effort has been put into reminding the population of the UK of their patriotic link to sterling, and how they need sovereign control over their own taxes and monetary policies.

Besides now is not the time for them to join. They are nowhere near the natural level for sterling to join. I expect to see them inside the club this decade, but not in the next few years. Sterling needs to appreciate somewhat, even if it was overvalued before.

Dannyboy83

The Economist wrote: »

No, we're not.

For one thing, you linked to a graph detailing a housing price crash. Prices are falling. You know, the opposite of inflation.

Weimarian inflation was measured in thousands of percent. British inflation will probably be less than 4% this year.

I'm open to correction here, but it seems 4% is too optomistic
Its already at 3.2%
http://www.independent.ie/business/european/uk-inflation-jumps-on-back-of-weak-sterling-and--food-prices-1684821.html

I guess at the moment, its impossible to say or rely on anything :pac:

jimmmy

Dannyboy83 wrote: »

This link/images show just how drastic the situation has become in the UK.

In your first graph, is there only a 15% fall house in house prices spread over too years ? Thats nothing compared to Ireland. I know of one property sold recently here in the Republic for just over half its 2007 price. Many auctioneers I know still have property on their books from 07, even though they have reduced the prices.
Lets hope sterling prices remain low for all those Irish shoppers who go across the border, and who cannot afford to shop south of the border.

The UK can set its own interest rates, and control its own destiny. While the Labour government has made a total mess of the UK economy, lets look closer to home ; have we been able to set our own interest rates we would have been able to control the property bubble, instead of toeing the line to suit the Germans / letting them set the interest rates.

getz

jimmmy wrote: »

In your first graph, is there only a 15% fall house in house prices spread over too years ? Thats nothing compared to Ireland. I know of one property sold recently here in the Republic for just over half its 2007 price. Many auctioneers I know still have property on their books from 07, even though they have reduced the prices.
Lets hope sterling prices remain low for all those Irish shoppers who go across the border, and who cannot afford to shop south of the border.

The UK can set its own interest rates, and control its own destiny. While the Labour government has made a total mess of the UK economy, lets look closer to home ; have we been able to set our own interest rates we would have been able to control the property bubble, instead of toeing the line to suit the Germans / letting them set the interest rates.

i have yet to find anyone in the uk who would want the euro-no british goverment[so far dare even to talk about it ]because it they would have to go to the people and would loose power ,the pound sterling and the uk economy is far closer to the dollar than the euro-ie in the passed when the dollar and the american economy strengthens so dose sterling-and that will happen again

Time Magazine

Dannyboy83 wrote: »

I'm open to correction here, but it seems 4% is too optomistic
Its already at 3.2%
http://www.independent.ie/business/european/uk-inflation-jumps-on-back-of-weak-sterling-and--food-prices-1684821.html

The 3.2% is the rate at how prices will rise over 12 months if they continue the rise as they did in Februrary -- just to clarify that it's not the case that prices have already risen 3.2% this year.

We're arguing here about inflation being between 3% and 4%. I repeat that inflation in the Weimar was about 15,000%. You're over-reacting.

Liam Byrne

I have to say that I LOVE :rolleyes: the big red "HOUSE PRICE CRASH" label on the graph.....where's the "HOUSE PRICE GOING OUT-OF-KILTER F**KUP" label while it was on the way up ?

Fratton Fred

I know that Sterling is low against the euro, but against the dollar it is probably at the right level, about 1.5.

I can't understand why Sterling is so weak though. i know the UK has racked up an eye watering amount (To quote Simon Peston) of debt, but the debt level in Europe looks set to escalate, especially if they take on Iceland.

Deedsie

It would be great if they did change over.

I have to say i did respect them for holding onto there pound for so long.

Will be handy for the border areas now though.

Change there traffic signs to kilometres & an All Ireland communications network, and you wouldnt even notice you were in a different country.

Bit of normality for the people around the border area.

Dannyboy83

The Economist wrote: »

The 3.2% is the rate at how prices will rise over 12 months if they continue the rise as they did in Februrary -- just to clarify that it's not the case that prices have already risen 3.2% this year.

We're arguing here about inflation being between 3% and 4%. I repeat that inflation in the Weimar was about 15,000%. You're over-reacting.

Ah, I see your point now. Crossed Wires.
I'm didn't intend to say that the UK has already reached a Wiemar situation, I intended to say that it is on a Weimar Crash course, its approaching a similar course.
i.e. if they don't change course & keep up current spend/debt targets, with a BOE bail out, they will end up in the Weimar toilet.
Sorry bout that.


http://www.timesonline.co.uk/tol/news/politics/article5971296.ece