Magazine article The Spectator

The Euro's Sixth Test: To What Problem Could It Possibly Be the Solution?

Magazine article The Spectator

The Euro's Sixth Test: To What Problem Could It Possibly Be the Solution?

Article excerpt

We must all make sacrifices. Gordon Brown's Cabinet colleagues spent a weary weekend ploughing their way through the Treasury's answers to his five tests for the euro. I had evaded this chore by going to Venice, to study the effect of currency reform on comparative purchasing power. The verdict is grim. Gone with the lira is the 3,000-lire negroni. The flashy new banknotes have fewer zeros on them but they do not buy so many drinks. Currency reform can do that, as we discovered when the pound went decimal. It weakened the instincts on which price resistance depends, and we had to learn new ones. Making life easier for travellers was never one of the five tests, but the euro's friends liked to claim that it would be a boon for us. Now we could travel in and around Europe without the fuss that we had come to associate with changing our money. …

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