Should Britain Join the Euro?

80 Pages Posted: 19 Mar 2005

See all articles by Patrick Minford

Patrick Minford

Cardiff University Business School; Centre for Economic Policy Research (CEPR)


European economic and monetary union is driven by politics, but the economic costs and benefits of Britain's membership can and should be assessed, argues Professor Patrick Minford in this careful and succinct analysis of the cases for and against Britain adopting the euro.

The core argument in favour is the reduction of exchange-rate risk, but because the euro is a regional currency that has fluctuated considerably against the dollar, exchange-rate variability might not be less under the euro and could even increase. In any case, financial markets can diversify away such risks.

Minford sees substantial costs of membership: increased variability of UK output, employment and prices in response to shocks; damaging harmonisation of tax rates, social support and regulation; and the possibility that British taxpayers will have to meet some of the costs of big projected state pension deficits in Germany, France and Italy. He concludes that EMU, 'as it is constituted and planned would be strongly against British interests to join'.

Keywords: euro, EU, interest rates, ECB

JEL Classification: E40, E42, E50, E60, F00

Suggested Citation

Minford, Patrick, Should Britain Join the Euro?. IEA Occasional Paper No. 126, Available at SSRN: or

Patrick Minford (Contact Author)

Cardiff University Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom
+44 29 2087 5728 (Phone)
+44 29 2087 4419 (Fax)

Centre for Economic Policy Research (CEPR)

United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics