Friday, 18 November 2011

Will Britain join the Euro?

The papers and the mass media make you think that there is a confrontaton in the offing but... is the confrontation real?

After all the noises been made, I wouldn’t be surprised if they told me that Britain will finally join the Euro as part of a deal to reform the European Union and create a three-speed European Union with some countries leaving the Euro, others staying within the Euro Zone and the three more powerful economies and some others being part of the Euro Zone.

There are some signals: Firstly, Angela Merkel said that she would like Britain to be a member of the Euro Zone. Secondly, the visible efforts of the Conservative government in coalition with the Lib Dems led by a disciple of Leon Britten (Nick Clegg). Thirdly, the fact that the British government and the Bank of England seem to have run out of options and have little else to do to help the British economy.

The sale of Northern Rock at a loss of not less than 400 million pound is yet another indicator that the British government is trying to download loss making financial institutions because they believe that there is not going to be any economic recovery in the short and medium term.

The issue of immigration has been put in the back burner. The news is that all the mainstream political parties have looked the other way because they have a more pressing agenda and the said agenda is the political unification of Europe. There are other aspects that are also been taken into consideration. As a block they are thinking about economies of scale in the energy markets. Britain is running out of energy options and having to buy more and more of the energy it uses, taking also into account a 25-year deal with Qatar for liquidified gas. Germany has existing deals with Russia for gas and oil and a pipeline across the Baltic is already operational.

If a reformed European Union with three different membership categories can stabilize the currency and lower operational costs, the Conservatives will sooner than later change direction and all kinds of excuses will be made to avoid any public consultation about treaty changes.

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