January 4, 2009
Ok so been listening to a lot (too much!) of the UK media comment on prospective UK membership of the eurozone now that the pound is collapsing….consensus seems to be (consistnent with my previous posts) that UK citizens continue to feel pride in the picture of the sovereign on their notes and imaginery bridges simply will not work!
The UK view also seems to be that UK membership would be a major boost to the eurozone and create a (true) European alternative to wall street…..how true is this?
First, London is an important euro financial centre even if not in the eurozone – in fact i would guess (ok, not really a guess!) that a majority of the transactions carried out in London financial centres are € denominated
I don’t accept that UK membership of the eurozone is key to euro zone financial success – this is not a question of eurozone governance – this has been covered in my last post. The eurozone as it is current constituted is a major economic force (sizee, trade links, etc). It can keep that position based on current membership (if, as per my prior posts, the eurozone starts acting as a single monetary area)
But basically my view is that the constant obsession about UK membership is a distraction from getting the eurozone properly structured – in other words delaying the proper governance of the eurozone until the UK joins simply postpones what is key for euro sucess – and pointlessly because the UK isn’t joining!
So an important European country ( the UK) isn’t important to the future of the eurozone…..
JAuthor : jpf74