With the British pound getting closer and closer in value every day to the euro, it's hard not to consider what will happen when the currencies align. The Guardian comments on this 'psychological moment' in a piece a week ago, when the high street rates (after commission) gave less than one euro for your pound, when a year and a half ago, you would have got around half as much again for each pound.
"Sterling's decline to a value of less than a euro, after commission charges, is seen by economists and opposition politicians as a pivotal 'psychological moment' - and evidence of declining faith in the British economy on global currency markets."
It's not a given - and there will likely be a struggle before it happens - but there is a possibility that the United Kingdom could adopt the euro, and that time may not be too far off.
The thing I'm more curious about though, more than the situation in the UK, is the situation in the Isle of Man if the UK were to adopt the euro.
The Isle of Man has it's own currency - the Manx pound - that is linked in value to the British pound. Coins are similar in overall design characteristics, portray our head of state (Elizabeth II), and have a local design on the reverse. The currency can be spent on-Island but not off, while the British pound can also be used on-Island.
Before the euro was introduced into Europe, around ten years ago, the Isle of Man Government set up a working party to investigate the implications the euro would have on the Island. They published a report titled A Review of European Economic and Monetary Union and its Implications which stated (in part):
"The Isle of Man Government is presently planning to ensure that necessary preparations will be in place for the eventuality of a single currency, irrespective of whether the UK participates in monetary union in 1999.
If the UK joins monetary union and Sterling is replaced by the euro, the Isle of Man will retain the right to issue its own currency. The provisions of the Currency Act 1992 would allow the Island to issue a new Manx currency which would be a ‘substitute Euro’, similar to the ‘substitute Sterling’ currently issued. The Government has been active in its preparations for a new currency as the retention of the Island’s own currency through issue of the Manx euro has two significant advantages:
- It provides a positive public statement of independence for the Island; and
- It allows for the continuation of the accrual of investment income from the issue of Manx notes and coins.
While it will clearly be necessary for the technical specifications of notes and coins to be the same as other euro issues, the Island is preparing its own designs for Manx euro notes and coins."
So, the Isle of Man could adopt a Manx euro, similar to the current Manx pound, whether or not the UK adopted it. But what would the currency have have on it?
The Island is not part of the UK, nor part of the European Union (though it has certain ties to both). It has managed with the current psuedo Sterling currency since 1971, with very little confusion other than when people try to spend the money in the UK. With the euro, where each issuing country has their own designs on one side of their coins, having a Manx euro would create one more design on the equivalent of that 'national side' as well as a replacement 'common side' that differentiated it from 'real' euro coins. There's much more potential for confusion than with the British/Manx pound.
It would be interesting to get a glimpse of the designs that the Government were preparing a decade ago to see how they have retained the basics of the euro, highlighted that it is not a normal euro while also adding a Manx look to the currency.
How would you feel if the Isle of Man were to adopt the euro? Can you see it happening any time soon? What images would you like to see on the currency if it were to be introduced?
(Image source: Wikipedia)