Letter published in the Financial Times, 19 May 2010
Sir, Thank goodness we are not in the eurozone, we are told. Look at Greece. But the UK is not in the eurozone and yet look at us. Poor Greece cannot devalue because they are in the eurozone. Yet we have been able to devalue because we are not in the eurozone and we are in the same mess. I am confused.
Martin Wolf keeps thanking Gordon Brown for not taking us into the eurozone. “I shudder to think what would have happened if the country had been in this trap” (14.5.10). Presumably he thinks things could be worse. Why do we not start comparing ourselves with Germany and eurozone counries not small and on the periphery.
The eurozone has helped to avoid the competitive devaluations of the 1930’s and their dire consequences. Greece has been helped by its partners. The time might come when we could do with some help, but we are on our own.
Is it not time to think a little more about old economic shibboleths of national currencies in a global financial world?