We're pretty sure we don't know anyone who actually thought the Pound was going away (well, aside from a few newly minted INSEAD students we met at an Irish pub somewhere or another) but it was always good for a speculative laugh, or to tease the Germans about. Still, we thought we'd report the news anyhow: Clever investigative reporting reveals that Britain isn't adopting the Euro.
Britain's respected Institute of Fiscal Studies, giving its traditional post-budget summing up of U.K. fiscal policy, said on Thursday that Britain faces "two parliaments of pain" living with the bitter taste of excess borrowing. It will take 20 years, the institute says, before national debt falls back to the 40% of GDP that the Labour government previously said was the maximum acceptable.
Even as a non-member of the single currency system that started in 1999, the U.K. plays a key role in European Union psychology -- as a sometimes positive, but also a negative example for other countries.
The survival of the system requires countries' continued willingness to submit to economic discipline. This applies both to current members and to candidates wishing to join from central and eastern Europe, such as Poland, Hungary and the Baltic states.
Alone because of this reason, the European Union could in no way afford to let in countries such as Britain now sitting in a dramatically exposed way in the fiscal sin bin.
Sort of scary when your country is mentioned in the same paragraph as the words "fiscal" and "Baltic states," no?
Britain sticking with the pound [Marketwatch]