Back in 1999 the single European currency was born and by 2002 it had comlpetly replaced many of the traditional currencies. Many of the new member states either are in different stages of joining in the next 3 years. This is all with the exception of Denmark, Sweden and the UK who opted not to sign up to the €uro for various financial incompatibilities, although EU legislation says that they are obliged to join, certain loopholes enabled them to keep their own monies for the time being. Currently Denmark is about to hold a refurendum to switch currencies from the Krone (DKK) to the €uro, seeing as the DKK is pegged to the €uro and determined by the European Central Bank (ECB) in Frankfurt anyway it would seem to be the logical thing to do. The UK is different though, the Pound Sterling(GBP) is not pegged to the €uro and is controlled via the Bank of England(BoE) in London. It has though often shadowed the €uro and risen and fluxuated in relative unison. That is until now! The credit crunch and Global financial crisis is hitting the UK very hard, interest rates are being slashed left right and centre and are now at 2% (last time they were at 2% was post-war 1951...put this in perspective the UK still had food rationing and was effectivly war-bankrupt in 1951). It is predicted that even more cuts will follow. The UK is suffereing badly as it is a island nation that makes its money primarily from the financial sector and has a secondary industry in engineering, mainly supplying aeroplane and automobile parts for the French and German industries. Basically industry sectors that are either crashing or stagnating in the global downturn. The UK is not self sufficent, it needs to trade it wares(car parts and insurance) to buy its food, clothes and other produce. We have oil and gas and a few other resources but nowhere near enough to sell on. The consequence of the all above is that the UK economy is crashing, the value of the pound is falling fast and is at an alltime low to the €uro and has not been this weak to the dollar(US) for many years. If it continues as it is, by March 2009 the €uro and the pound will have a 1:1 ratio and the dollar not far behind, compare this to earlier this year where the £:$ was 2:1 and the €:£ was 1.4:1 Basically there are hard times ahead for the UK, the question now being asked is will it be better to crash and burn on our lonesome or to consider going €uro to soften the blow and take on the hardtimes as a collective unity? Will the ECB be any better than the BoE? Can the £ survive? It is the worlds third biggest money reserve but is loosing its investable value at a rate of knots. The only positive that can be gained form this is as the pound looses its value, UK exports become more affordable, this would be a good thing as sales would increase, the problem being though is people are not buying whatever the price! Perhaps if we hang on to the pound when the markets recover; the pound will be a very attractive currency compared to the €uro and Dollar for a while making the recovery for the UK quicker and the bounce bigger. Would the bounce be big enough to recover the loss made in the downturn where we are having to buy goods to survive at a 30% mark up, how long will this continue? Here are a few articles on the subject: Jeremy Warner: Sterling was far too high. Now it may be going the other way - Jeremy Warner, Business Comment - The Independent Battered sterling tumbles towards parity with euro | Business Financial Advice UK - UK economy News - Is the UK set to join the euro?