JULY 2003 BROADSHEET - Changing To The Euro – Effects
The Club met on 26 June for its monthly event, entitled “Changing To The Euro – Effects”.
The meeting was tinged with sadness, as it was the first event to be held since the sudden and unexpected death of the Club’s long-serving committee member and Honorary Secretary, Nigel Wallace. The Club’s Chairman, Roy Cuthbert, made some moving remarks about Nigel and invited the audience to observe a minute’s silence in Nigel’s honour. Roy reminded everyone that the very fact that the June event was going ahead was largely due to the efforts of Nigel, who surely would not have wanted to see the event cancelled.
A knowledgeable audience was both entertained and informed by our two guest speakers, who managed to convey opinions and observations without taking political sides.
Max Beber is a Fellow in Economics at Sidney Sussex College, Cambridge and an Associate Research Fellow of the Royal Institute of International Affairs. Max put the Euro topic in context by setting out the historical economic background, before exploring the current economic rationale for the Government’s thinking on whether to join the Euro. Max reminded us that monetary sovereignty is a relatively new concept, having come into play after the First World War. Before that, the fact that everyone traded in gold or gold-related paper meant that there were not any exchange rates as we know them today. While the UK is rightly fearful of the link between fixed interest or exchange rates, Max observed that there has been a continuous, subtle development of economic integration over the last 40 years or so. Interestingly, the EU has not become the “fortress Europe” that some anticipated; EU trade with non-EU countries has in fact grown since 1970.
Bob Watson is a Cambridge graduate who started working life as an automotive engineer. He is now the Chief Executive of the EEF Mid-Anglian Association, which is part of the Engineering Employers’ Federation. As a trade body the Association does not have views itself, but its members do – 55% of whom are still undecided on the Euro. Bob set out the practical issues concerning the Euro, as seen by the Association’s and Federation’s members. These issues include: the exchange rate for entry (members currently think €1.54 – 1.58: £1 would be acceptable); the commercial impact of the continued uncertainty about whether or when the UKwill join (the UK’s share of inward manufacturing investment into the EU is down from 26% in 1998 to 12% in 2002); and the level of regulation imposed by Eurocrats.
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