Online Currency Facts

The Euro: the facts, the UK referendum, the arguments
 

Linda McAvan MEP

The Facts

• The Eurozone: Twelve EU countries adopted the Euro as their currency on January 1st 2002. Only three EU countries remain outside: Denmark, Sweden and the UK. Countries joining the EU after 2004 will also adopt the Euro.
• Euro coins and notes: There are seven banknotes: 5,10,20,50, 100, 200 and 500. Notes are the same across the Eurozone to prevent fraud. However, Euro coins have one side with a common design, and one with a national design for example the Belgian King is on the Belgian coins. If Britain joined, we would be able to have the Queen's head on our coins. Each Euro is made up of 100 cents and there are eight coins worth 1 and 2 Euros, and 1, 2, 5, 10, 20 and 50 cents.
• Who decided to have the Euro? The member governments of the Eurozone decided to create a single currency because it would improve their economic performance. No-one can impose membership, each country has taken its own decision.
Why hasn't the UK joined the Euro yet?

• It's our decision: The government is in favour in principle of joining the Euro, but it has promised a referendum so that British people can take the final decision.
• Joining must be in the National interest: We will only join the Euro if it is in Britain's national interest. This is why 5 economic tests must be met before a referendum is called: whether Britain's economy has converged with the Eurozone; whether there is enough flexibility to cope with membership; the effect on investment; the effect on the City of London; the effect on growth and jobs.
• During previous assessment, the government determined that the 5 economic tests have not been met, and the referendum will not be held until they have.
Will the Euro be good for Britain?

• Jobs: 3.5m UK jobs depend on our trade with EU countries – and 60% of our exports. We export more to Belgium than Japan and only 16% of our goods go to the USA. Fluctuating exchange rates mean risk for businesses which export their goods. The Euro takes away that risk – and the cost of insuring against it. When people talk about saving the pound, they should make sure it's not at the expense of their job!
• Prices: Many people fear that prices will rise if we switch to the Euro. Evidence from the Eurozone, shows that though some prices were rounded up, others were rounded down, the overall effect on inflation being minimal. In the long term, the Euro will create competitive pressure, as it will be easier to compare prices across borders and shop around for cheaper suppliers. Prices should fall as a result.
• Investment in the UK: Many foreign companies invested in the UK to have access to the EU's common market. But research shows that some foreign manufacturers, hardest hit by the strength of the pound, are switching new investments to other countries. Investment in the UK fell by 15% in 2000, while it increased by 38% in the Eurozone, France being the most popular destination.
Arguments against the Euro

• An independent currency? Many people argue that if we switch to the Euro, we will lose our economic independence. But in the modern world, our economic prosperity is closely tied in with that of our main trading partners. Whatever affects France and Germany, will affect us. We can retain the pound as a separate currency, but that does not make it independent.
• What about our national identity? Our sense of who we are and our traditions do not depend on what currency we carry in our pocket. When we travel abroad this year, we will see that the French are still French, the Spanish still Spanish… .despite the Euro!
• More power for Brussels: there is a common misunderstanding that "Brussels" can impose laws on Britain. But the reality is that the European Union only has the powers which governments have given to it. It cannot take powers on its own. Most policy areas – in health, education, housing, pensions – are entirely in the hands of national governments.

If you want a Currency Quotation please follow this link:
UK Online Currency Conversion

Article Reference: lindamcavanmep .org.uk/special_reports/euro

Photo: rotherhamweb .co.uk/features/mcavan/1.jpg