EMU: smoothing the UK's ruffled feathers

Article Abstract:

The UK government's opposition to integrating into the European Monetary System (EMS) is costing it credibility in the areas of economic policy and commitment to the single European market. Rising interest rates, foreign exchange fluctuations, and foreign account deficits have undermined government economic policy. In contrast with the volatility of sterling, the EMS is successful in achieving monetary stability for its members. UK membership in the EMS would: help the UK economy by stabilizing inflation and exchange rates and decreasing interest rates; boost the competitive position of UK business by stabilizing sterling; and remove dissension within the Cabinet and restore credibility to the government's commitment to the single European market.

Great Britain

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In the shadow of a monetary monolith

Article Abstract:

The exchange rate intervention mechanism within the European Monetary System (EMS) will not stabilize exchange rates, lower interest rates, and lower inflation, despite what EMS proponents had promised. Stability in the foreign exchange market can only be achieved when rates are free to fluctuate. The EMS is a layer of interfering bureaucracy which worsens inflation rates for all members, but at the same time rewards those countries with an expansionary demand management strategy and a tendency to finance public sector debts in the open market.

Europe, International relations, European Union, British foreign relations

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