WI: Britain joins ERM in 1979?

[Prussian1871]

Hello all, this is a short discussion question, but: what if Britain had joined the European Exchange Rate Mechanism in 1979 when it was first introduced as opposed to during the Major years? As I recall, they did not do so because Denis Healey was against the idea at the time when Labour was in government, but what if the Europhiles like those in the Conservative Party had pushed for it?

• What would have required Britain to actually join the ERM?
• What would be the short-term and long-term implications of this?
• How would this effect the establishment of a single currency?

 

[Prussian1871]

Bumping. Nobody interested in an early path for Britain in the euro?

 

[Prussian1871]

Bumping one last time. If no one replies, I'll leave this be.

 

[Simon]

Try opting into the PMQs thread over in Chat and posting a link, it's peopled by British posters, and a few furrins, with an interest in politics.

 

[Prussian1871]

Try opting into the PMQs thread over in Chat and posting a link, it's peopled by British posters, and a few furrins, with an interest in politics.

Alright, I may try that. Thank you.

 

[Simon]

Okay that meant to say 'try dropping into' but you get the general idea. Bloody autocorrect.

 

[Aber]

It would be problematic - Britain had a large inflation problem and so was out of synch with other ERM members. OTL solution to inflation was high interest rates which pushed the value of sterling up and so is not compatible with ERM.

 

[Charles James Fox]

It would be problematic - Britain had a large inflation problem and so was out of synch with other ERM members. OTL solution to inflation was high interest rates which pushed the value of sterling up and so is not compatible with ERM.

But the ERM itself was a solution to inflation (as was advocated by its proponents at the time) - it would impose discipline by committing the government to a tight fiscal and monetary policy.

If anyone other than Thatcher had been Conservative PM in that era (Heath, Pym, Whitelaw, Prior, Howe - who was probably the strongest advocate of the ERM) then it's likely we would have joined. Thatcher put the issue off due to her scepticism about greater European unity and Lawson's advice that we would be joining at an artificially high parity (of course Lawson would later favour the ERM and resign over the issue).