What would be the consequences of Britain joining the single European currency (the euro)?
It is important to remember that the process of joining the single currency – EMU – stands for Economic and Monetary Union and not, as is often mis-stated, ‘European’ Monetary Union. Should Britain join EMU it will surrender all powers to determine interest rates, the rate of inflation, the levels of unemployment and the rate of growth. As Professor Sir Alan Walters notes: “This is no theoretical abstraction, as we saw in the late and unlamented European Exchange Rate Mechanism (ERM), which was – indeed still is – a trial canter at monetary union. * During the period of Britain’s membership of the European Exchange Rate Mechanism (ERM), from 8 October 1990-16 September 1992, the British economy shrank by the equivalent of 3.9% GDP, and unemployment rose by 1.2 million. * The damage inflicted on the UK economy through the loss of sovereignty over interest rate decisions should Britain join the euro has been estimated as potentially the equivalent of more than 1% of national income, or £
