We need to join the Euro

12 December 2008

This week the pound hit its lowest level against the euro, reaching a new record low of 1.12. Is it time to give up the queen in our pockets? I never thought I'd say this but I think it's time.

Let's look at the facts. We are a £1.5 trillion economy supporting a banking system with £7 trillion of assets. Good old Gordon has borrowed a phenomenal amount of money to bail out our broken banks, and it's going to be impossible to pay it back and raise taxes with us all feeling the pinch.

Then there's the trade argument. Businesses here are going down the pan quicker than Lewis Hamilton, with those that export to the eurozone smarting from poor exchange rates. There's no doubt that they would be more stable if they could deal in euros, and the Treasury would find it far easier to borrow on the international markets to support our broken financial services industry and economy.

But then there's the most powerful argument- just look at how strong the euro is against the dollar, the 'world's currency'. If we want to do business with the rest of the world we need a currency that rivals it – unfortunately the pound doesn't look like it's the answer anymore.

Don't get me wrong, I have always loved spending the pounds, it's been a part of all our lives, familiar – comforting even - but there's just no room for sentiment anymore. Eurosceptics will argue that we'd be losing control to Frankfurt, having interest rates set from abroad. Yet recent events have shown that the Bank of England is hardly free to change interest rates as it pleases!

And yes, Barcelona's housing market may be different from Birmingham's, but the European Central Bank's interest rates have never been sky-high. Perhaps joining it would not only help keep interest rates low, but help bring back some stability to the housing market. Didn't Gordo say he wanted 'an end to boom and bust'?

Unfortunately though I just don't see it happening. But should a referendum ever be called just remember one thing - those with dollars in their wallets caused this global credit crunch, a currency that matches it may just go some way to healing it.