Britannia Radio

The truth of course is not what the EU says!  Sterling may have 
weakened but only because the Eurozone kept interest rates far too 
high for too long.  What ac tually happened is that international 
monery weent where interest was higher and the euro strengthened 
against the pound.,  How's that for shooting yourself in the foot and 
then blaming a bystander.

Are they protesting that since the ECB lowered its interest rates 
that the euro has fallen (=the pound has strengthened  - same thing) 
from 1.06 to £1 to £1.11 this morning ?  Of course not; they are 
politicians and as we all know politicians lie.

How can THREE journalists not see this ?

What these politicians are suggesting is that we should manipulate 
the markets and make the pound subservient to the euro by shadowing 
it.  This would make our opt-out from the euro meaningless for our 
economic policy would then be set by the ECB!
xxxxxxxxxxx cs
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FINANCIAL TIMES 8.4.09
Europe concerned over sterling slide
By Ben Hall in Paris, Chris Giles in London and Gerrit Wiesmann in 
Frankfurt

The pound's slide against the euro has begun to trigger concerns on 
the continent that the UK is seeking to gain a competitive advantage 
over its European Union partners.

0Sterling has fallen by more than 25 per cent on a trade-weighted 
basis since the autumn of 2007, raising the question as to whether 
Britain is letting its currency fall to help its exporters at a time 
when the eurozone is falling more deeply into recession.

Asked about sterling's fall in an interview with Sky News on Monday, 
Christine Lagarde, French finance minister, said that all G20 
countries had last week promised to minimise any negative impact on 
trade and investment of their domestic policy actions.

The European Central Bank, which rarely comments directly about 
exchange rates, uses similar code to warn countries to support their 
currencies.

Without naming the UK, Lorenzo Bini Smaghi, a member of the ECB's 
executive board, on Monday reminded EU states outside the single 
currency that they had to treat their exchange rates as a "matter of 
common interest", as stated in article 124 of the EU treaties.

"The question arises whether the single market can function smoothly 
when the exchange rate is allowed - or even encouraged - to 
depreciate sharply," he said.

Mr Bini Smaghi went on to outline the ECB's steps for correcting the 
perceived over- or under-shooting of exchange rates, beginning with 
private talks then "public verbal interventions" and finally 
interventions on the currency markets.

One senior EU policymaker told the FT that, in his view, the UK was 
in breach of article 124.

Brian Lenihan, the Irish finance minister, in January directly 
accused the UK of running a policy of "competitive devaluation", 
putting other countries under "immense pressure".

Ms Lagarde was careful not to say that the UK was manipulating the 
exchange rate. "I wouldn't suggest that for a micro-second," she 
said. [That's exactly what you're doing dear -cs]

But there is still a view in some quarters that the UK has a duty to 
its European partners to do more to prop up its currency. "It's in 
[the Bank of England's] interests to support it a little more," Ms 
Lagarde told France's national assembly three months ago.  [WHY 
didn't the ECB reduce its interest rates to follow the pound ?  -cs]

European concerns about sterling's level are met with bemusement in 
London. UK policymakers have neglected the value of the pound since 
it was kicked out of the exchange rate mechanism of the European 
monetary system in 1992.

Sterling's plunge since 2007 initially surprised and alarmed the UK 
authorities as it suggested a lack of international confidence in 
Britain.
As the pound has stabilised a little in recent months, the Bank of 
England now sees the benefits of a lower currency, not in rising 
exports but in a rapid fall in imports contributing positively to 
economic growth.