A historic agreement was put in place on Friday revolving around deeper economic integration for all EU countries… except Britain, who at the moment has decided not to be involved. It is expected that it will now take about 3 months for the agreement to come into place with a number of European referendums still to take place. In the meantime many people will be asking two questions, will this agreement save the Euro and what will it mean to the UK not being part of this agreement?
We are already starting to see cracks in the coalition government in the UK as Nick Clegg (a Liberal Democrat – pro Europe) stated that the PM Cameron was making the wrong decision not being involved in this agreement. One major issue is that over half of trade for the UK goes through Europe and the risk is that the UK and Europe could drift apart and UK exporters lose out. When Cameron first announced he had decided not to take part in the agreement it was reported as a great move for the UK, Cameron was being compared to Churchill and that this was the start of the UK recovery now not handcuffed to the Euro. However, over the course of the weekend the news has sunk in and now the decision is not being looked on quite so well with many economists and analysts concerned that the UK is soon to be very much cut off from the rest of Europe.
Only time will tell what the actual outcome of Britain not being involved in this agreement will be but between now and then there is likely to be many more column inches devoted to this UK – Europe relationship and also we can expect the currency markets to continue its volatility over the Christmas period and into 2012. Sterling Euro exchange rates are not far off a 9 month high meaning we have seen some good trading opportunities for those looking to buy Euros.