CEBR reveals what might have happened if Britain joined the euro

| February 15, 2010
CEBR reveals what might have happened if Britain joined the euro

Leading think tank, the Centre for Economic and Business Research (CEBR), has today claimed that the recession and unemployment would have been much worse if Britain had joined the euro.

According to the think tank, if Britain had dropped the pound, the unemployment rate would be at 15% (double what it is now) and GDP might have slumped by 7% last year, instead of 5%.

However, while it said growth would have been slightly better between 1998 and 2006, the slump would have been much greater.

The think tank also believes that the euro zone could break up before 2015 as a result of the severe debt crises in some of the southern Europe economies – in particular Greece.

Greece is currently grappling with a severe debt crisis which has weakened the value of the euro and driven Government bond yields higher.

The CEBR’s controversial claims come just a few days after official figures revealed the euro zone economy grew just 0.1% in the final three months of 2009, suggesting the economic recovery is faltering.

Meanwhile, Germany, which is the euro zone‘s largest economy, said GDP remained flat in the three month period, with growth unchanged compared with the third quarter.

The area’s third largest economy, Italy, unexpectedly contracted by 0.2% in the final three months of 2009, also causing concern over its recovery.

Furthermore, the Spanish economy is still in recession after the economy contracted by 0.1% in the fourth quarter of 2009 – the seventh consecutive quarter of contraction.

However, the euro zone’s second largest economy, France, posted a 0.6% rise in GDP for the fourth quarter of 2009 – beating analysts expectations.

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