Abandoning the pound is in the best interest of all of Britain

1. Abandoning the pound is in the best interest of all of Britain • Larry Mallari • Tom Brinkerhoff • Tom Schemkes

2. Pro-Euro Politicians • Polls suggest a slight majority of Swedes and Danes favor the Euro • If the EU enlarges to the east, Britain alone could be left as the only member remaining outside the currency union • Britain would have more influence in the EU if they joined the common currency

3. Benefits of a common currency • Reduced transaction costs • Reduced uncertainty risk • Create long-term capital flows • Extinguish hot monies • Synergy between member nations

4. Prime Minister Blair’s Comments • During the election campaign, he wanted Britain to join the Euro • “Save the Pound” politicians slogans have backfired in the opinion surveys • Put Euro membership to a referendum providing that the five self imposed economic tests are met

5. Five Economic Tests • Is there enough flexibility in the economy to deal with problems • Would entry encourage firms to make long-term investments in Britain • Would entry damage the City’s financial services industry • Promote growth, stability and jobs • Is the UK business cycle compatible with the eurozone

6. Opinions • Recent opinion surveys in the U.K., Sweden, and Denmark show a distinct warming toward the Euro • Bank of England Governor Sir Edward George called the single currency a “fantastic success” and said the introduction of euro notes and coins this year has been an “absolute triumph”

7. Conclusion • Polls seem to suggest that Britain will join the euro eventually • It will reduce transaction costs because of reduced exchange rate fluctuations which will increase economic growth • Joining the euro should lead to more investments, more jobs, and lower interest rates through fiscal responsibility demanded