Mar 24 2007
Any Answers? The pro Euro minority reinforce their bad economic advice
I had assumed the massive anti Euro majority would flood the phone lines to Any Questions??? Instead the pro Euro minority (under??1 in 5 and falling) made a number of specious comments which the BBC aired instead.
I argued that no business need run currency risk in the modern world. For a very small premium it is possible to protect yourself against adverse changes in currency values for the year ahead. My critics tried to claim this is currency speculation, aided by the BBC! It is the very opposite of currency speculation. If a business knows it will have a stream of revenues in pounds or Euros or dollars, and wishes to ensure no loss in its own currency, then it can arrange this. You can sell the revenues forward at a specified rate, or you can simply take out protection against the currency falling.
I argued that if someone wanted convenience when travelling they could use a credit or debit card rather than having to change lots of bank notes. My critic argued that this would mean large banking commissions which would not be payable if we all worked in Euros. Someone should tell him that there are transaction charges in Euro to Euro transactions just as there are in sterling to Euro transactions. Indeed, the EU has been so upset by the scale of these cross frontier??charges it has been trying to get them down.
??I argued that the Exchange Rate Mechanism experience for the UK had warned the public off wanting the ERM version you cannot get out of called the Euro. My critic argued that the ERM was obviously flawed because it invited speculation against the currency, in the knowledge that the?? central banks would bail out the position. As he was a proponent of the Euro shouldn’t he have first apologised to the British people for the fact that the EU got its European Monetray system so wrong? As one of the few critics of the EMS at the time I was well aware of the lunacy of guaranteeing inetrvention at given rates. It is important to understand, however, that the ERM was necessary preparation for the Euro. A country that cannot keep its own exchange rate in line with the others is not ready to join the single currency. A fluctuating exchange rate shows the economies of the currencies concerned have not come together, and need differing exchange and interest rates.
The pro Euro people still concentrate on the relatively trivial issues and ignore the big issues. They still cannot understand that it gives countries the wrong interest rates, which will either?? destroy jobs or create more inflation. They seek to attribute any favourable trend in Euroland to the currency, and make excuses for all the unfavourable ones. They fail to see that it exerts much more strain on the economy if the rate camnnot adjust, and ignore the removal of democratic accountability for the sinews of economic policy.
5 Responses to “Any Answers? The pro Euro minority reinforce their bad economic advice”
John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College...
Suggest to the Euro worshipers that if a currency union with a large block is a good thing of itself, why not union with the pre Gorbachev Rouble block? Many might say, yes, that would have been a good thing, given that many of them are collectivists at heart. Then suggest union with the US$, suddenly you see them coughing and spluttering performing cartwheels trying to explain why a currency union is not such a good idea after all. It can be great sport.
Redwood: “I argued that no business need run currency risk in the modern world.”
Not even the BBC.
“At 31 March 2006 the Group had entered into a net commitment to purchase foreign currencies amounting
to
You correctly protest that “the pro Euro people still concentrate on the relatively trivial issues and ignore the big issues”. This can hardly be surprising, as when asked why Britain should adopt the Euro your fellow panellist, Professor Brigid Laffan: Jean Monnet Professor of European Politics, University College Dublin, could only proffer as a reason that she would then not need to buy sterling when she visited London!
The Any Questions/Answers programmes become increasingly frustrating to listen to, particularly due to the partisan way in which Jonathan Dimbleby so clearly reveals his own opinions during both programmes and often stifles the opinions of those responding in Any Answers.
Brian Tomkinson: “The Any Questions/Answers programmes become increasingly frustrating to listen to, ”
That is a fact. It may go some way to explain why few anti calls came in. I haven’t listened to the BBC Radio 4 nor watched BBC TV Question time for about 18 months.
In fact the last time I sat through a Question time was made memorable by one of the panelists offering as a solution to mobile phone theft, making mobile phones less portable.
They put people like Eddie Izzard on, Eddie Izzard has some merit a comedian, but his solution to world ills, we should all hug each other, is facile in the extreme.
APL You are dead right, the modern media world where many of the panelists make no real effort to address the points raised and simply mouth the pre-prepared soundbite makes the show almost pointless.
I think it was William Hague who said we effectively elect a dictator for five years, and he’s right on the money, so these shows offer little. I think the only people who now watch have pretty much made their minds up politically, and so aren’t really open to argument, and as a means for holding politicians to account, it’s pointless.
Now if the could all be attached to lie detectors…