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MASTER 2

EUROPEAN ECONOMY

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UK and the Euroscepticism: good or bad decision?

Introduction

United Kingdom joined European Union in 1973. Since this date, UK has shown difficulties to fully trust the UE. However, Great Britain stays one of the main actors of European Union, it is third most powerful economy in EU and the fifth in the world. It belongs to OCDE, G8 and also common wealth. We can say that UK is an important part of EU but it always doesn't fully agree with European union ways and especially with the single currency.
We’re going to study the Great Britain Pound. First of all, we will highlight the reasons of English refusal concerning Euro adoption. They had the right to not accept this currency but the most important question is why did they refuse?
Then, we will try to find if they did wright by not joining the third phase of European Union which is being part of common currency. Comparing pound with Euro and Dollar will give us some answers.

1. Historic and arguments in favor of the British euroscepticism

England has obtained a specific clause called « op-out » which lets UK the choice to adopt or not the third phase of monetary European Union (MEU). And UK used this option and decided to not accept this currency. England is still in the second phase of MEU and this clause was one condition to make UK agreed to the entire treaty.

Protocol says that some treaty clauses can be avoided by UK: • Power of UK in monetary policy field stays the same, which means (UK keeps power on this fields according to national right) • UK is not submitted to treaty constraint concerning huge deficits • UK is not concerned by treaty about central banks European system, European central Bank and those institutions’s decisions.

England didn’t accept Euro as its currency because of many reasons. We would like to understand those reasons in order to study further the economical aspect of this refusal.