Britain And Joining The Economic And Monetary Union

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to the EMU will be the expense and dislocation involved in replacing national currencies with the Euro. The UK decimalization in 1971 took almost 5 years to complete, yet this involved a change in only one currency compared with up to 15 if the EMU goes ahead. Apart from producing and distributing the new currency, IT systems, tills, slot machines and accountancy systems will have to be changed. These will also have to be adapted to operate dual-currency systems during the three years between 1999-2002, during which national currencies will circulate alongside the Euro. The European Commission argues that the cost of introducing the single currency will be relatively small compared to the efficiency gains, simply because the costs would be one-off. However, the cost for major EU banks has been estimated to ECU 10 billion, translating to �7.17 billion at February 1998 exchange rates, for a "big bang" conversion. For the UK banks alone, this will amount to ECU 1 billion ...

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and difficult process of adjustment.

LOSS OF SOVEREIGNTY

The loss of British sovereignty, i.e. the power of independent decision making seems to inspire the strongest opposition to a single currency. With a single currency, the UK (and other nations) would lose control over interest rates, monetary supplies and management of an own currency alongside monetary measures in general. These are instead to be decided upon from the centre, the European Central Bank (ECB), which some argue has been based upon the German Bundesbank. Patrick Minford, a monetarist from Cardiff Business School, states that " far from making the ECB an exact copy of the German Bundesbank as is often ...

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