Sterling is no longer the force it used to be within the global currency and economics market.
The $, EURO, YEN, take the lead.
The UK trades offshore in mainly these currencies and the cost to UK business and economy is large as money markets capitalize on the exchange mechanisms.
I would be quite happy in fact to seriously consider use of the EURO or the US$. Many businesses in the UK hold EURO and $ accounts for international trade. Travelers are forced to exchange the good old £ into more acceptable currencies at significant cost for the privilege.
What indeed is so special about the UK £?
You have no idea what you are talking about do you? I guess the problem you had was finding an article informing us how wonderful the Euro is.
It isn't that the pound is special or needs to be one of the leading currencies. You don't change your currency just for convenience there is a bit more to it than saving a trip to the currency exchange.
I'm assuming that your business, that can only trade with countries in the immediate vicinity, means that you need a Euro account for which your bank makes hefty charges?
The Euro actually illustrates the hidden dangers of the EU so I wouldn't expect you to spot them Waz or read or understand the following.
The Euro was needed for those who are desperate to united Europe. If/when the Euro did go into meltdown it would only bring its participants closed together = political union.
When the Euro was started it was like putting the roof on a house before putting up the walls but was a political decision rather than an economic one.
A common currency leads to a common state. There are examples of different states using the same currency but they are small countries sharing a currency such as some of the Carribean countries using the dollar. Nowhere other than the EU do major states of roughly equal size share a common currency. That is because any reasonably sized country likes to have a say in the issue and management of their currency.
The problems of sharing a currency with your neighbours is that one of your neighbours may operate policies that undermine the currency which can cause a banking crises, inflation, effect bond yields or even cause a currency collapse. So you need to have some sort of control of their financial policies and how can you do that without a political union? How Europhiles can still tell us that there is no intention for EU members to lose any sovereignty and justify the Euro is beyond me.
Were you to decide to share a currency or form monetary union with others you first need to find if you are both simpatico. Are you subject to the same economic shocks, can you both produce full employment without independently fiddling with different interest rates etc? The EU didn't do this, the Euro was created with no bail-out clause, the stability and growth pact wasn't worth the paper it was written on and most importantly there was no banking union.
Spain and Ireland had a credit explosion which led to their property market overheating but Greece is a simpler example.
Greece joins the Euro and now enjoys lower interest rates and goes on a spending spree. German exporters were the main beneficiaries of this spree.
Slowly costs and prices continued to rise faster in the little countries like Greece than in Germany and the Greeks couldn’t compete. This often happened in the past but now Greece can't depreciate the Drachma and get more competitive.
So when the 2008 crisis hit everyone badly, for the small countries in the Euro like Greece it was catastrophic.
Now the EU had to save Greece from bankruptcy. With their options limited due to the Euro they come up with an austerity programme to deflate the Greek economy. It was the same solution that had been tried and failed in the thirties. The trouble is deflation worsens the debt ratio.
The gains of the Euro in reduced uncertainty over exchange rates and increased market size and efficiency have been very small. Trade between Eurozone members grew no faster than it did between members and non-members. However costs and prices rose faster in those countries that had historically high inflation. So overall the Eurozone performance was poor overall. It has been a chief driver of the overall high unemployment throughout the Eurozone which was the main criticism of the Gold Standard. That’s what Keynes was keen to avoid when he designed the Bretton Woods fixed but adjustable exchange rate. So basically The Euro is the modern Gold Standard with all of its faults and few of its strengths. At least with the Gold Standard countries were at least still in charge of their own financial management although they had little room for manoeuvre. And the Gold Standard wasn't a ruse to remove national sovereignty because you could suspend it or leave it.
Comparing the average economic growth of the Eurozone it is a little over half what it was in the 18 years after the Euro than it was in the 18 years before it. Times have been hard since 2008 but the Eurozone’s performance is far below countries that aren’t in the Euro. Germany’s growth has been a little under the Uk’s and half that of the US but France is nearly half the UK and nearly a third of the US. Spain, Portugal, Italy and Greece have contracted.