Local view for "http://purl.org/linkedpolitics/eu/plenary/2000-05-17-Speech-3-056"
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"en.20000517.4.3-056"2
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"Mr President, on behalf of the Liberal Group I would like to welcome Greece into the euro and say that we shall certainly be voting in favour of Greek membership. For those other ‘out’ countries, including my own, I very much hope that they will be able to join the euro soon. I very much regret too that there are so few British Conservatives here in the Chamber today because it shows, with Greece now the twelfth member of the euro zone, how far from reality British euroscepticism about the future of the currency is.
The euro has successfully delivered low inflation, rising growth, falling unemployment and protection for the euro zone economies from the ups and downs of the foreign exchanges. Indeed, the British perception of the euro as a failure, because of its fall against the dollar, simply misunderstands the whole project. The key test of a currency is price stability within the economy, not the value of the currency against other currencies outside the economy.
On the test of internal stability, with inflation at less that 2% and growth higher at 3.1% in the euro zone than in Britain, the euro is clearly succeeding. Indeed, research at the Bank of Tokyo-Mitsubishi recently calculated the euro’s value as if it had existed over the last few decades, weighting each predecessor currency's value to create a synthetic euro. Historically, that research found that the euro actually swooped between a high of USD 1.70 in December 1979 and a low of just USD 0.69 in February 1985. In other words, the euro could stay within its historic trading range and happily now either fall by a further 23% or rise by 188%. Certainly that synthetic euro included currencies such as the Italian Lira, but the same point applies even to the mighty German Mark on its own.
If the euro is a weak currency, than the Mark was positively anaemic. It plunged to DEM 3.45 against the dollar at the end of February 1985, which is a third below its current rate of DEM 2.16 to the dollar. Within three years, and a dollar crash, the Mark was back to DEM 1.57 during December 1987.
The truth is that the history of foreign exchange is a history of gross misalignments, of overvaluations and undervaluations, each inflicting either depressive pain or inflationary costs on the economy and, as Greece has rightly recognised, the euro is a way of regaining control over a key part of our economic environment."@en1
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