h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

Madent -

I see your point that given 2 factories, one that will cost a fortune to close and one that won't, companies will invest in the expensive-to-close one ...

... but surely most companies are smart enough that, when setting up a factory, they take that into consideration? And would open their factory in the low-commitment country?

In other words, in your example, an investor would open their factory in the UK not France because of employment laws? So your example, Fergusson Massey moving from the UK to France, argues against the thoery you are proposing!

Perhaps I am just confused ...

Gif

I seem to remember that Nissan, who opened a much trumpeted plant in Washington, Tyne and Wear some 15 years ago have openly said that they are considering closing the factory and moving it to continental Europe because of Britain's continued dithering on Europe.

So we should give in if Big Business bullies us then, Blues Shark?

Not entirely my point.

Nissan must have some idea what is good for them. Why assume, automatically, that what is good for them is bad for others?

But on the other hand, do you have an alternative? As Maggie and her Merry men sold this country's economic future into the hands of big business, this is the reward we get. If big business does, unilaterally, declare that it will no longer, or can no longer, invest in a Britain that will not join the Euro, what will we do then?
As the Americans have been finding out the hard way, it's an irreversible trend. Companies can and will black mail governments into what is in their interests. Probably the best we can hope for is to have some sort of influence over the big businesses with regard to their interests also being ours.

Which is why talk of refusing to surrender our economic soveirgnty always strikes me as hilarious. We don't have any economic sovereignty. Economic policy is no more determined by No 10 (or No 11) any more than I have influence over the orbit of the moon.

We have entered the age of the zaibutsu, the mega corporation. They aren't remotely interested in the economic situation in any one country, but how best their economic interest can be served across the globe. Their decision isn't whether they would be better suited to build a factory a Shropshire or Sussex, but wherther they should build in Britain or the continent, in the US or Mexico. And they do not give a tinker's cuss about your (or my) economic realities.

It's quite interesting to note that Nissan Motor Manufacturing (UK) only started complaining that Britain wasn't part of the Euro, and threatening to move to the continent after they merged with Renault of France. Hmmmmmmm

Manufacturing in the UK is no longer as important as it was back in the 80's. It is sadly a dying industry in Britain, and joining the Euro will make no difference to that.
It now only makes up about 5 % of our G.D.P. So big companies can't excert that much pressure on our government, but we are obviously still keen to attract any overseas busuiness and remain competetive with the rest of the world.

Most large corporations see Britain as a very viable place to invest or set up business. They all understand how to hedge currency risks, so that does not enter into the equation. Just look at the number of 'European' banks who's head offices are in London!

Addmittedly it makes more sense for a manufacturer to set up business in a country with low costs and a stable economy. And while Britain is stable, it's harldy cheap, but then France and Germany aren't that much cheaper.
These comments about leaving Britain for the continent because we are not in the Euro are almost entirely political. It may be cheaper to manufacture on the continent, but that has nothing to do with currencies.

Large corporations or 'zaibutsu', do have alot of power, but due to the current global economic slowdown, they have alot less than they did a few years back. Governments are still the ones with the largest coffers and most power. And I'd prefer a local government looking after my interests, rather than one single government for the whole of Europe with the impossible task of keeping everyone happy at once.

Blues Shark, it is true that No 10 no longer determine our economic policy. I'm actually glad that they don't. Polititians have too many motives.
But who would you prefer to control our interest rates... The Bank of England. Who monitor the UK economy closely and gauge changes in rates to keep our inflation low and our growth stable.
Or the E.C.B. Who have to consider what's best for every country in the E.U. before changing policy ???

We are part of Europe, and I'm actually quite proud of that, in a funny sort of way. But I don't see why we can't be part of europe and keep Sterling as our currency.

Simon the

I actually tend to look at the bigger picture and ask;
'Why can't we do something that will benefit everybody-ie the less rich of Italy, than just thinking abouit ourselves when it comes to interest rates?'

That's logic that no one can argue with.
But then not everyone is so kind and generous. Especially not Governments or big corporates.
It's refreshing to see there are still selfless people about though

Wouldn't there be more deserving recipients that Italy? The poorer African nations, for example. Would they benefit if the UK changed currencies? I'd rather request our Government to give them more aid.

Just because all the European nations join together in harmony around the Euro campfire, that doesn't mean the rich will stop getting richer and the poor will stop getting poorer.
I wish it did, but life just isn't like that.

The simple, easy and inexpensive way to deal with poverty in Africa isn't more aid, it's cancelling third world debt. That wouldn't cost the tax-payer a penny extra, either.

I only picked italy as an example because they are the most likely and obvious recipient of economic stability. Most of eastern europe would benefit as well.

Doesn't America have the largest Debt of any country? Should we cancel that ?

AFAIK third world loans charge zero interest, and have no deadlines for repayment.
But they are still 'loans'. If and when a country gets back on it's feet, they will be repayed.
To a lending government they are a long term asset. Which is why cash rich countrys like Japan give so much.

If you turn them into gifts, instead of loans, they will virtually stop overnight. No government is a charity, no country will give anything away for nothing.

More and more countries would request financial aid, as it would be cash for free, and their governments may be tempted to deliberately waste money, just to get this aid.

I think even Christian Aid, together with the IMF, the World Bank, and every developed country in the world agreed that scrapping world debt is a bad idea and would make the situation a thousand times worse.

Time to add my 2 euro-cents worth.

I'm from the UK but living and working in one of the 12 Eurozone countries, out of the 15 currently making up the EU (some quick definitions thrown in for free there).

On a day to day practical basis, using the Euro is very easy, it makes travelling from one country to another much less hassle, and the price differentiation on goods ( a litre of petrol, a pack of cigs) is immediately obvious. This gives the consumer greater power.

Each of the EU nations with which I am becoming more familiar has its own strong national identity and culture, of which they are all individually proud. I have never heard any of the EU12 suggest that joining the Euro has diluted their own nationality. The French are just as French as ever they were! Why does the UK feel differently?

OK, there are differences between countries in terms of weather, industry, fiscal policy, produce, tax regimes, what side of the road etc etc. This doesn't seem to have hampered nations as diverse as Finland and Greece from perceiving a benefit to themsleves and the rest of the EU on joining. But the UK feels its differences are, well, different.

There is a long list of candidate countries applying for membership. (Not aware of any African ones, though ) They all see some sort of advantage. But the UK doesn't.

And I like the design on the notes. The pictures are symbollic, so that they apply to all Member States: the front depicts windows, openings, opprtunities; the reverse depicts bridges, co-operation, overcoming obstacles.

euro

No, third world economies are crippled even attempting to repay the interest on debts that are held in Europe and the US. They grow cash crops (bananas in South America, as well as cotton and other 'commodity' crops) for export and fail to raise the necessary food crops to feed people properly.

Nobody is suggesting the extension of loans to countries that see it as a free meal ticket. Merely cancelling the repayments (which they *do* pay) would make a huge difference.

Simply expecting them 'to get back on their feet' is a little naive. There's no incentive to do so if the money will have to be repayed, is there. They might as well continue taking the money and not making the repayments in the model you talk about.

http://www.s-j-c.net/Debt%20campaign.htm

Try that for size. For something so many people have decided would be a disaster, looks like a pretty healthy campaign to me.

Totally agree with you Luckystar.

I'm amazed at how the Germans have taken to the Euro, after all the DM was their big symbol of how they rebuilt their country (with and without aid from outside) and after (re)unification it was a symbol of that too.

Now they see the Euro as a sign of moving forward. (with higher prices)

OK, that's the people's perception. It is having an effect on the economy, and I'm sure it's not all good. But, for the benefit of the EU as a whole, I'm sure that in the long term the benefits will outweigh everything else.

And I have to say, that it's getting to be fun now, now that people are starting to come back from their holidays, bringing coins with them, how many different nationalities of Euros and Cents I'm getting in my change. (and on a completely trivial note: my kids are enjoying hearing about the different countries the coins come from, finding them on maps and so on)

Big companies may be trying to "blackmail" Britain into joining the Euro, I remember Toyota making a statement that they would only be paying suppliers if they were invoiced in Euros etc etc, but is that bad? The whole "moving our factory" thing crops up from time to time and until it was "blame the Euro" it was blame the efficiency, blame the unions, blame the weather type of stuff, so this is something that won't go away. Ultimately companies only want profit, and they will do their best to get it.

BTW: who was talking about African nations joining the EU? Because on the Today programme yesterday they said that an African Union had been formed, modelled on the EU. So perhaps that was what you heard about?

Sorry, I couldn't access that site, I was restricted by my works firewall for some reason.

I'm guessing it was the petition to cancel third world debt right?
22 million signatures at the last count I heard.

I wonder how many signatures you could get to keep Sterling... hmmmmm

As this thread is about Britain and the Euro, do the E.U. have any different views on cancelling third world debt?

I doubt it.

It's not the petition, it's the central site dealing with the specifics of how and why for each region, along with the latest news etc.
A lot of stuff on there about G8 atm, as they basically ignored the problem at their last meeting.

Hi Simon,

>Doesn't America have the largest Debt of any country? Should we cancel that ?

Not as a percentage of GDP it doesn't, no. The US has the resources to repay its debt over a very few years. Many 3rd world nations effectively have GDPs smaller than their interest charges and so can only ever slip further into debt. If they were companies, they could declare themselves bankrupt and be protected.

>AFAIK third world loans charge zero interest, and have no deadlines for repayment.
>But they are still 'loans'. If and when a country gets back on it's feet, they will be repayed.

Don't know where you heard that from. In fact, 20-30 years ago many lending nations bumped up their interest rates without consulting the borrowers (again, that would be illegal with any other loan), which is a large part of the reason many nations cannot pay the interest.

>To a lending government they are a long term asset. Which is why cash rich countrys like Japan give so much.

Yes, interest on these is a constant boost to the economies of the lenders, including the UK.

>If you turn them into gifts, instead of loans, they will virtually stop overnight. No government is a charity, no country will give anything away for nothing.

Conflicts with your first claim, that they're zero interest? Remember, inflation devalues a lump sum over time.

>I think even Christian Aid, together with the IMF, the World Bank, and every developed country in the world agreed that scrapping world debt is a bad idea and would make the situation a thousand times worse.

Can you support this claim?

You might also like to look up 'Rubber Boom' on Google. Some (by no means all) debt-ridden countries used the loan money in unconstructive prestige projects - but even so, that was over a generation ago. Whole populations are being punished for the actions of dictators who (in many cases) were overthrown decades ago. In other cases, what seemed manageable loans at the time have become unmanageable due to circumstances beyond the borrower's control - and there is no way out except a debt write-off.

To say nothing of the fact that some countries have paid back three times what they borrowed and now owe more than ever!

Gif

"And I like the design on the notes. The pictures are symbollic, so that they apply to all Member States: the front depicts windows, openings, opprtunities; the reverse depicts bridges, co-operation, overcoming obstacles."

You've got to be kidding!

Euronotes are hideous, they're covered in pictures that belong on the wall of the unimaginative MD of some bland corporation. They are dull. And far too small.

"But I don't see why we can't be part of europe and keep Sterling as our currency."

couldn't have put it better myself

The simple answer to that is that we can, until the rest of Europe gets tired of dealing with us, and decides that as we are hell-bent on being the 51st star, not one of the thirteen, that's how they'll treat us.

Not for the first time, I ask-who has ever done the maths on what our refusal to join the EEC the first time cost us?

Getting back to should we join the euro or not, an interesting historical note was that shortly after WW2, Winston Churchill proposed a pan european currency as one of the steps to bringing western europe closer together; he rather unimaginatively suggested it should be called the "euro pound".

A pan european currency is nothing new & it is not threatening, in fact an even earlier proposal was for a joint UK/French currency in the 1870's.

Regarding earlier comments about the debt burden placed on the third world, for purely humanitarian reasons we need to eliminate current debt. The consequence of continuing with the existing debt and interest regime, will be more famines, more countries with reducing life expectancies etc. As an aside it is interesting to note that in southern africa life expectancy has dropped to less than 35 years due to a combination of the aids pandemic, lack of state funds for healthcare, sanitation etc.

It is time that the rich countries of the world repaid the developing countries for centuries of exploitation and cancelled debt.

Apologies for the off topic rant.