Ollie Kamm on the euro

Yes, I know, he\’s now on the leader writing team at The Times. Still missing some understanding of economic history though (if one can say such things about such an august figure?)

The issue of euro membership is whether the benefits outweigh the costs. A useful test is whether the opponents of the euro consider that that calculation has been affected in any way by the greatest financial crisis since the 1930s.

Britain\’s escape from the Great Depression was in fact triggered by our coming off the gold standard in 1931. A standard we\’d joined at too high a rate in 1925. The calculation therefore is that in times of great stress on the economy we don\’t want to be locked into a fixed exchange rate system.

I do agree however that the issue with the euro is whether the benefits outweigh the costs. As my answer (and that of reputable economists as well) is "no" then that rather settles the matter, doesn\’t it?

4 comments on “Ollie Kamm on the euro

  1. I’m not sure reputable economists are able to weigh the political benefits and costs (e.g. the risks of France, Italty and Spain strong-arming the ECB to monkey with rates to suit their domestic political agenda) which surely have to be a factor too?

  2. “The Economist” is pushing a line that the euro will have a problem during a recession so euro-states should push through flexible labour markets and ways to boost productivity.
    Just what they are not going to do; they should have done that first, then joined.
    Doing it now, in a sharp recession, either won’t work or will start riots that will make the recent Greek events look like a scuffle at closing-time.
    Or maybe both at once.
    Yes, some people did say this at the time. But “I told you so” is rarely a pleasant feeling if you care about the people involved.

  3. People who think the whole thing should be decided on a cost/benefit analysis are missing the point.

    The Euro is a political project, and our decision to join – or, hopefully, not to join – is therefore a political one, not a technical one.

    The question is, do we want to surrender the last (admittedly tiny) vestiges of our independence and sovereignty, and become just a small part of the “great” European super-state?

    And the answer, I hope, is “no”.

    It’s nothing to do with costs. Don’t fall into their trap, God knows the programme is no longer a secret, even if it ever was.

  4. Andrew Duffin hits the nail on the head.

    Its like discussing the economic benefits of choosing Real Ale over Lager. Irrelevant.

    The Euro is about Politics, no more, no less.

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