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Had we joined the euro, the British economy would now be a catastrophe (rather than a mere disaster)

DAVIS DAVID official Don't just take my word for it, David Davis wrote a super piece in yesterday's Evening Standard, speculating about the economic state in which we would find ourselves, had Britain signed up to the euro:

"Our already damaged economy would have been crippled by a fixed exchange rate set by the so-called "successes" of the financial sector. Instead, when our financial sector collapsed, the pound fell. Outside the euro, sterling has been trading at a competitive level in global currency markets. British exports remained at attractive prices while euro-denominated goods raced to all-time highs against the pound and the dollar in 2009. This is the main reason we had a record manufacturing upturn in January, and without the beginnings of that upturn we would have still been in recession. In Greece, Ireland and Spain, all in the eurozone, manufacturing is struggling. The biggest of these, Spain, is unlikely to see an economic recovery this year.

"So managing our own currency is critical to our ability to compete. Giving up our currency would also have meant giving up to the European Central Bank our ability to control interest rates. The ECB has kept interest rates significantly higher than rates in the UK. The Bank of England has kept our rates low and pumped money into the economy, allowing companies to absorb the shock of recession and start to recover. None of this would have been possible had we joined the euro."

It should never be forgotten that whilst the late 1990s were not the Conservative Party's finest hour electorally, the party's campaign against British membership of the euro was utterly in tune with the view of the British people, at a time when both Labour and the Lib Dems would have ditched the pound at a stroke if they could have got away with it. Without the Conservative Party's determined opposition to the euro during William Hague's time at the helm of the party, Tony Blair would have been able to abolish our currency and the consequences would have been dire.

Jonathan Isaby


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