sussex2 wrote:In my opinion yes we should have.
For the Euro to survive in the longer term the Eurozone must introduce an open, transparent and effective fiscal transfer mechanism. A mechanism whereby Brussels can rapidly transfer funds to regions (read, countries) which it deems are in urgent, or long-term, need of those funds. The purpose of these transfers would be to eliminate, for example, the current account trade deficits of a particular region (read, country). We are not talking about long-term loans as has happened with Greece. There is no adequate fiscal transfer mechanism at present. The Germans (one of the richer members of the monetary union) strongly oppose its introduction. Greece ( one of the poorer members) requires it. All politically cohesive national systems, whether they be a federal system or a single country, rely on a mechanism of fiscal transfers from its wealthier regions to its poorer regions in order to try and achieve economic, political and social stability. This is effected through the national taxation system of each monetary area. The EU does have a form of fiscal transfer in the guise of EU Cohesion Policy Programme whereby the European Union uses fiscal transfers to national and regional levels to foster economic and social cohesion. But this scheme depends upon member states submitting applications which are then vetted and subsumed into a morass of bureaucracy. Nor are the sums involved sufficiently large enough to deal with the economic and monetary imbalances between the richer and poorer Eurozone countries. For a Eurozone fiscal transfer mechanism to work in a way that will save the Euro there needs to be a political will on the part of all Eurozone member states, both rich and poor, to hand financial sovereignty to a central political authority that is empowered to make fiscal transfers rapidly and almost at will. This is, and I suspect will forever be, politically unacceptable to Germany. German taxpayers have expressed their total opposition to... "baling out the work-shy southern Eurozone member states.
An open and transparent fiscal transfer mechanism can be introduced only once political union has taken place. By way of examples look at the history of the USA and the introduction of the US dollar, or the fiscal transfers from what used to be West Germany to what used to be East Germany after reunification. For the Eurozone to work effectively, and before it can survive in the longer term, there must be a political union of all its members. The leaders of the Euro member states are clearly hoping that the Euro will help drive the creation of a new or united country.
So, either the Euro in its present configuration will fail as a result of economic and monetary tensions brought about by the absence of an effective fiscal transfer mechanism, or the Eurozone will become a political union which will have the power to transfer funds for reasons of social and economic expediency. If the latter scenario ever becomes reality it will be the richer northern states who will be the donors and the poorer southern states the beneficiaries. If the UK had joined the Euro, we would have been a donor state in this situation.
For all of the above reasons I believe we were right not to join the Eurozone.