The question of the adoption of the Euro by the United Kingdom

Résumé du document

The Euro was introduced as a single currency on January 1st, 1999 in the European Union and replaced national currencies. Put in circulation on January 1st, 2002 under its fiduciary shape, the Euro succeeded the European Currency Unit (ECU), established in 1979. The Euro is today common to sixteen member states, which forms the Euro area. This currency is presented as the guarantor of stability and prosperity in Europe. The Euro appeared in a particular context, the crisis of the 1970s marked by the inflation and monetary laxness. The monetary policy of the Euro area is fixed by the European Central Bank (independent institution, created in 1992 by the treaty of Maastricht which has for main objectives to fight against the inflation). The United Kingdom did not adopt the Euro and preserved its national currency, the pound sterling. It profits with Denmark from a clause of exemption allowing them not to adhere to the area. But the question, very taboo and political, about the possible adoption of the euro by the United Kingdom begins to resurface. So, we are lead to wonder if the United Kingdom will be one day a member of the Euro area. Furthermore, is it ready to adopt Euro?

Extraits

[...] It was the cause of a big crisis of confidence in pound sterling, from the investors. At the end of GBP represented 1.02 euros. The current situation; 2010: The year for changes? During a speech in Paris on February 26th Peter Mandelson said that the United Kingdom will adopt one day the Euro:. He added: Euro area has already a unique monetary policy, and I am convinced that Great Britain will be one day a member“. Peter Mandelson is one of British politicians the most favourable to Europe. [...]

[...] Besides, after the respect for the five criterions, it was necessary to obtain the agreement of the government, the parliament and the people (by referendum) about the membership in the Euro. For the British government, these conditions were never performed (according to an official report of 2003) and the United Kingdom thus cannot join the Euro area. A first assessment: there are no many economic obstacles. In fact, there is a convergence of the British and European economies. The British companies realize of their exchanges with the Euro area. But the United Kingdom has not yet subscribed to the Euro because of political reasons. [...]

[...] If we arrived almost at a parity 1 GBP = 1 Euro, it would be a favourable argument to an integration of the United Kingdom in the Euro area. The exit of the United Kingdom of the crisis in the fourth quarter 2009 will be perhaps not sufficient to allow the Labours to win the elections. The New Labour party, led by Gordon Brown, allowed Great Britain to face the crisis but what about the control of the resumption? It is true that the Labour party is in the power for approximately 13 years: in principle, a government in position since a long time should be isolated. [...]

[...] But the question, very taboo and political, about the possible adoption of the euro by the United Kingdom begins to redo surface. So, we can wonder if the United Kingdom will be one day a member of the Euro area. Furthermore, is it ready to adopt the Euro? Even if there are some obstacles about it admission in the Euro area the United Kingdom is on the road to adopt the single currency (II). Some obstacles which still remain about its admission in the Euro area Economic obstacles In 1992, the “protocol on some clauses about the United Kingdom” was annexed to the treaty of Maastricht. [...]

[...] The question of the adoption of the Euro by the United Kingdom The Euro was introduced as single currency on January 1st in the European Union and replaced national currencies. Put in circulation on January 1st under its fiduciary shape, the Euro succeeded the European Currency Unit established in 1979. The Euro is today common to sixteen member states, which form the Euro area. This currency is presented as the guarantor of stability and prosperity in Europe. The Euro appeared in a particular context, the crisis of the 1970s marked by the inflation and a monetary laxness. [...]