It all seems so long ago, those heady days of 2003, when the first Euro coins bearing the head of Elizabeth II were unveiled by the Royal Mint. Getting there hadn't been easy, however. When Tony Blair first announced he was keen to join the Euro, early on in his premiership, he faced fierce opposition from his then Chancellor of the Exchequer, Gordon Brown. Brown, and his aid Ed Balls, refused to let Britain join the Euro until the economy had passed five economic tests, which guaranteed that the move would be good for Britain. But after the 2001 election returned Labour with another massive landslide, Blair began to grow impatient. Added to this was the momentum; William Hague's main platform had been 'Save the Pound', and he had been punished at the polls as a result. But still, despite all the urging and pressure, Brown wouldn't budge.
The opportunity to break this impasse came in 2002, when the International Monetary Fund began to seek a new Managing Director, to begin in 2004. Blair put Brown's name forward, and Brown resigned from the government to contest the job, having become fed up with fighting Blair. Into Brown's place Blair appointed the New Labour stalwart Alan Milburn. Despite an enormous backbench rebellion, Milburn managed to force through Parliament a Bill to join the Euro, providing a referendum held in late 2002 was passed.
To almost everyone's amazement, the referendum passed the public vote by 52% to 48%. This came as a surprise to many, not least many in the Cabinet who were expecting it to fail. But with the Conservative Party under Iain Duncan Smith in no position to offer a coherent resistance, the combined efforts of Labour, the Liberal Democrats, the SNP, Plaid Cymru, and a host of smaller parties was enough to overcome public scepticism. The start date for the new currency was 1st January 2004.
At first, the fuss seemed largely pointless. The 'UK Euro' had the Queen's head on it, and the widespread financial chaos predicted never materialised; indeed, some older people observed that the move to decimal had been much worse. Travelling abroad became much easier, while in Northern Ireland the move was widely praised for helping to bolster links with the Republic. Michael Howard's promise to bring back the pound may have won him some votes in the 2005 election, but his party was still badly beaten by Labour. As time went by, the issue faded from people's memory.
Until 2007. The financial crisis which overtook much of Western capitalism placed the European single currency under enormous pressure, exacerbated by the different priorities of the Eurozone countries. With Blair gone, Milburn had now become Prime Minister, and as a response to the near collapse of the UK's banking sector he poured billions of euro into the City of London to help shore it up. The national debt ballooned, and it rapidly became clear that the markets were spooked by this level of debt. The obvious answer would have been to cut interest rates and devalue the currency, but Britain's membership of the Euro prevented this from being done. The markets were briefly calmed by the election of the Conservative-Liberal Democrat coalition in May 2010, but before long the pressure was rising again. Despite slashing public spending as fast and as deep as it could, in the face of enormous public dissent and protests, the government was unable to meet its borrowing requirements, and in November 2011 was forced to turn to the IMF for a bailout. Some have speculated it was the punishment handed out by Gordon Brown when his IMF team stormed in and imposed strict controls on the City which goaded Cameron into using his veto, bringing the UK one step closer to the ultimate goal of both men; to get our own currency back.
At first, the fuss seemed largely pointless. The 'UK Euro' had the Queen's head on it, and the widespread financial chaos predicted never materialised; indeed, some older people observed that the move to decimal had been much worse. Travelling abroad became much easier, while in Northern Ireland the move was widely praised for helping to bolster links with the Republic. Michael Howard's promise to bring back the pound may have won him some votes in the 2005 election, but his party was still badly beaten by Labour. As time went by, the issue faded from people's memory.
Until 2007. The financial crisis which overtook much of Western capitalism placed the European single currency under enormous pressure, exacerbated by the different priorities of the Eurozone countries. With Blair gone, Milburn had now become Prime Minister, and as a response to the near collapse of the UK's banking sector he poured billions of euro into the City of London to help shore it up. The national debt ballooned, and it rapidly became clear that the markets were spooked by this level of debt. The obvious answer would have been to cut interest rates and devalue the currency, but Britain's membership of the Euro prevented this from being done. The markets were briefly calmed by the election of the Conservative-Liberal Democrat coalition in May 2010, but before long the pressure was rising again. Despite slashing public spending as fast and as deep as it could, in the face of enormous public dissent and protests, the government was unable to meet its borrowing requirements, and in November 2011 was forced to turn to the IMF for a bailout. Some have speculated it was the punishment handed out by Gordon Brown when his IMF team stormed in and imposed strict controls on the City which goaded Cameron into using his veto, bringing the UK one step closer to the ultimate goal of both men; to get our own currency back.
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