This is markedly lower than the current rate which is 0.7, and in terms of more recognisable measures (to many in Britain) it is 2.3 to 2.6DM, or 7.7 to 8.7 francs, from 2.77 and 9.2 today.
This rather puts lie to the view that Britain has the strongest economy in Europe. For a start an exchange rate so low suggests serious concerns about the health and felxibility of much of our manufacturing industry and exporting service sector. Second, a rate at the lower end (0.85) would make our economy somewhere between around 10 - 25% smaller than France's, and pretty similar to Italy.
ps It appears the City misread the report, or at the least read it so quickly they got the wrong message. The rate of joining thought to be ideal is lower than the current rate, but not by much at 0.73 -- higher than the highest point of the band suggested above. This makes joining somewhat easier, but keeps our economy within spitting distance of France's (not a trivial point given the shareholding of the ECB reflects gdp (and population size).
posted by Matthew @ 6/09/2003 12:18:00 PM
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