Some have asked whether being in the Euro would have avoided the current recession we are in. I don’t believe membership of the Euro would have avoided a recession.
In the boom years 2006, ECB interest rates were lower than UK, therefore the housing boom would have been greater.
Membership of the Euro did not prevent housing boom and bust in Spain and Ireland.
Global nature of the credit crisis. Germany is in serious recession, despite not having same levels of personal borrowing.
UK public borrowing was relatively good compared to Eurozone members – only 36% at start of 2007. Most other Eurozone countries like Greece have much higher public sector debt. It is argued that membership of the Euro gives a false sense of economic stability. Because countries are in a strong currency and risk of currency collapse is limited it encourages them to borrow recklessly.
The UK made many mistakes but, membership of the Euro wouldn’t have avoided current difficulties. (in my opinion anyway)
1 comment so far ↓
I think to some extend it would have helped but basically UK’s economic problems start from not solving them in the last 10 years.
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