I refer to the letter from Nagindas Khajuria (Letters, page 13, 26 July), in which he attempts to put forward positive reasons why this country should scrap its own currency and join the euro.
Like most of the arguments that we see in favour of the euro, the vast majority of the points are subjective and thus difficult to refute. I will not, for instance, attempt to argue with the view that the advent of the common agricultural policy of the European Union has avoided a third world war. In his concluding paragraph however, Mr Khajuria states that ‘it is a fallacy to believe that somehow the euro reduces our sovereignty and our ability to manage our own economy’.
The questions I would ask Mr Khajuria are: 1. Is the ability to raise or lower interest rates a tool in the management of the economy? 2. If we entered the euro, would we retain our ability to set our own interest rates?
On the assumption that Mr Khajuria would agree that the answers are ‘yes’ and ‘no’ respectively, then entering the euro would reduce our ability to manage our own economy. QED.
Attempting to control an economy without the ability to set interest rates in line with the requirements of that economy is somewhat akin to attempting to drive a car without control of the accelerator or brake pedals, as the Germans and Irish are beginning to realise.
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