MONOPOLY MONEY

The hottest issue in Europe just now is undoubtedly the single currency, which chuntered into half-life amidst the traditional disagreements and backbiting on January 1st, 1999, and was finally fully launched three years later. But what are the pros and cons of this, and should Britain join or stay out? This page sets out both sets of arguments, and leaves readers to find their own conclusions.

--------------------------------- ----------------------------------

ARGUMENTS IN FAVOUR

Having a single currency will increase trade in Europe, as businesses would no longer have to take exchange rates into consideration when planning exports/imports.

Partially true, although exchange rate fluctuations work both ways for businesses, so the net gain in investment would probably be negligible. Also this argument assumes a single market and no unfair trading barriers, which the European Commission's funding of inefficient Continental state airlines shows is not happening.

The single currency will give Europe greater influence in world finances.

Oh please! Remember 1992 and Black Wednesday, when the combined endeavours of all the European banks came not even close to stopping the determined acts of speculators in America and the Far East, as well as in Europe. Though some in the Union will never accept it, the moneymen will always have the last word.

If Britain doesn't join, we shall lose out on investment.

Probably true, though not for the reasons claimed. There have already been hints that the 'in' countries would discriminate against Britain (illegal but near-certain), and it is well known that Germany would like to see Berlin replace London as the financial capital of Europe. However, this argument supposes that the whole thing actually works, which is far from certain.

Britain might find itself forced out of the E.U. if we don't join the single currency.

Sorry, that one belongs in the column below, which is ....

--------------------------------- ----------------------------------

ARGUMENTS AGAINST

Britain will lose control of its finances, and hence its independence.

Technically we started to lose control when the first merchant ship sailed for foreign shores. However, under the entry criteria Britain would have to give control of all its gold reserves to the new European Central Bank in Germany, whom of course we could trust completely. Just as we can trust those pigs currently flying by my window as I write this.

The whole system will be inflexible, unlike the European Monetary System. Unable to adjust their exchange rates, countries will be able to do nothing to curb unemployment.

True. Though governments cannot do much to stop the fluctuations in unemployment, the single currency would take away even that room for manoeuvre.

The whole thing will be run by unelected bankers.

This might be a good thing if we could assume that these bankers would not be subject to pressure from their own national governments, let alone the E.U. And we could also assume bacon can get airborne again.

The whole thing could collapse if the entry criteria are fudged.

AND AMAZINGLY THEY WERE!!!!! The Union allowed all sorts of financial wheezes to allow countries to qualify. For example, a large portion of the National Debt in Germany was written out of the equation as 'health costs', whilst the French government raided the state pension funds to reduce its debt. The problem is, of course, that weak countries like Eire and Greece are unused to the financial strictures (witness their struggles to meet the criteria), and may find it difficult to stay in. And the collapse of a single currency would be disastrous for everyone in it.

The system will eventually require uniform tax rates, so money does not flow into low-tax countries.

True. And Britain has comparatively low tax rates, which would make us one of the chief losers. VAT will have to be applied to a whole range of products, including children's clothes, water, newspapers, food and public transport. In addition, this would in turn lead to uniform pensions provision, which would mean Britain paying for pensions in Germany and elsewhere.