WI: Black Wednesday is avoided

Hello everyone, this is my first thread here and I'd like to start with Operation Sealion... Just kidding!

Following Black Wednesday and the United Kingdom's withdrawal from ERM-I, Italy and other countries also ran into problems, and ten months later the rules were relaxed to the point of imposing very little constraint on the domestic monetary policies of member states.

My point of divergence is that these rules are relaxed a few months before Black Wednesday, therefore avoiding it altogether - the UK has far greater breathing space to react to the speculators' onslaught and easily prevails over them.

What are the consequences of this? Most importantly, can Major win the 1997 election now that the Tories are still seen as good with the economy, and will the UK join the euro?
 
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Welcome to the Board!!

Even if Major avoids Black Wednesday there are still some difficult obstacles to overcome, the first is the 1993 Budget with the imposition of VAT on fuel breaking a key election promise. IIRC the Tories actually recovered ground in the polls during the winter of 1992/93, it was after that Budget that their poll ratings went off a cliff and never recovered. So you have to find someway of generating the additional revenue without breaking that promise. The performance of the economy wool be crucial, IOTL it was the big devaluation caused by bailing out if the ERM which is credited with kick starting the economy so a possibly longer lasting recession won't do them any favours.

You also need to get Maastricht through Parliament, IOTL it was Black Wednesday that got the Eurosceptics so fired up, Teresa Gorman said that the Party "was just fed up with Europe" without BW the hard core like Gorman, Bill Cash and Teddy Taylor will still rebel but if Major hasn't had the loss of authority he did IOTL then he may be able to push it through. But fundamentally by 1992 the Tories are a tired Party, the backbenches are full of has beens and neverwhere's who have little interest in towing the line. They will still lose to Labour in 1997 but not by such a catastrophic defeat and I cannot see Britain joining the Euro.
 
I agree the Tories will still lose in 1997, for being in government for 18 years (and for having everything that went on in that time, right or wrong, come back to them).

No Black Wednesday probably means Lamont sticks around. Does he remain for the duration of the parliament? I'm not sure. If we see a longer ressession he might "resign" anyway.

I think Redwood still challenges Major in 1995 due to internal party squabbles, but without Lamont as his manager he could fair a little worse.

Butterflies could prevent Blair's assention to the Labour leadership in favour of Brown and the changes in cabenet from 92-97 could well mean Hague doesn't have the standing for a leadership bid after Major's resignation.

Could that mean Michael Howard becomes leader 6 years earlier than OTL? The Tories losing less severely than OTL could well mean Michael Portillo keeping his seat however, making him a main contender. Or does Ken Clark manage it this time? Or Lamont, if he can stay/get back into parliament somehow?
 
You also need to get Maastricht through Parliament, IOTL it was Black Wednesday that got the Eurosceptics so fired up, Teresa Gorman said that the Party "was just fed up with Europe" without BW the hard core like Gorman, Bill Cash and Teddy Taylor will still rebel but if Major hasn't had the loss of authority he did IOTL then he may be able to push it through. But fundamentally by 1992 the Tories are a tired Party, the backbenches are full of has beens and neverwhere's who have little interest in towing the line. They will still lose to Labour in 1997 but not by such a catastrophic defeat and I cannot see Britain joining the Euro.

There was apparently a feeling that their career's were shot anyway so why follow a line they disagreed with? If they were still confident of victory, or if Thatcher and Tebbit were much more supportive of Major unlike how they acted IOTL, then you may see less of a rebellious backbench against Major running the leadership. Another way to avoid Black Wednesday is to never join the EFM in the first place but that's outside the limits given so that probably can be canned, the Tories were doomed by 1997 but there is always the chance of being able to have a stable position (you could see a Labour majority of 25-40 instead of 170 like OTL).
 
I wonder what would have turned the UK away from the euro, in this case. It's not like Blair was going to offer a referendum anyway...
 
Following Black Wednesday and the United Kingdom's withdrawal from ERM-I, Italy and other countries also ran into problems, and ten months later the rules were relaxed to the point of imposing very little constraint on the domestic monetary policies of member states.
The new rules would have permitted an additional 9% devaluation against the Mark. IOTL the £ fell by significantly more. To maintain in the ERM, interest and exchange rates would have had to be higher, thus restricting the economic recovery. I predict the economy would have been worse in 1997 and the Tories would have lost by even more, especially if Lamont was still Chancellor.

http://www.oanda.com/currency/historical-rates/
 
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