It has been bizarre to hear eurofanatical journalists ringing up the European Foundation to ask why Britain is not joining the eurozone, now celebrating its tenth anniversary. I mean, I do not even know what solid information this is based on? Could be poor speculative journalistic guesswork, but there is no solid long-term economic reasoning behind it. Martin Wolf at the FT sounds as stumped as I am.
So, following on from my earlier piece, Martin Wolf puts forward a more cogent economic case for Britain being better off outside the euro:
… there is no evidence that being outside the eurozone has imposed a performance penalty upon the UK economy. Between the first quarter of 1999 and the first quarter of 2008, its economy expanded by 28 per cent, against 21 per cent in the eurozone as a whole and 16 per cent in Germany. As I noted this week ("Emu's second 10 years may be tougher", May 28), there is no evidence that Emu has improved the economic dynamism of its members. If anything, membership seems to have reduced the pressures for reform.
The proposition then is fundamentally an economic one: remaining outside the euro preserves the safety valve of currency flexibility, while losing nothing in aggregate economic performance. Being outside has not even hurt London's position as a financial centre.