Letter: Who will tell us the truth about the single currency?

Michael Spencer-Smith
Saturday 19 October 1996 23:02 BST
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Everyone, including your correspondent John Lichfield, seems to think that sterling would decline against the euro if we do not join a single European currency. Why should it? Recently, sterling has risen sharply against the mark and the dollar. Given that, due to the fudges necessary for many countries to pass the Maastricht criteria, it is likely that the euro will not be as hard as the mark, it seems much more probable that sterling will rise against the euro when it arrives.

Europhiles always invoke the spectre of "speculators" waiting in the wings, ready to pounce on sterling if it stays outside the fold. But that is to equate size with strength. How hard is the dollar these days? The Swiss franc is the hardest currency in the world, yet Switzerland is not even a member of the UN, let alone the EU. Besides, if "speculators" could bring down sterling any time, why aren't they doing it now? The Europhiles fail to understand that it is governments trying to fix their currencies at unrealistic rates that invites attack from a market which knows their real value. That is why sterling was ejected from the ERM.

Currency rates are only a thermometer. You do not make your economy stronger by artificially boosting them. We should not join a single currency until we can do so without shackling our economy in the process.

Michael Spencer-Smith

London SW10

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