Pound sterling's forced withdrawal from the ERM
The United Kingdom entered the ERM in October 1990, but was forced to exit the programme within two years after the pound sterling came under major pressure from currencyspeculators, including George Soros. The ensuing crash of 16 September 1992 was subsequently dubbed "Black Wednesday". There has been some revision of attitude towards this event given the UK's strong economic performance after 1992, with some commentators dubbing it "White Wednesday".[1]
Some commentators, following Norman Tebbit, took to referring to ERM as an "Eternal Recession Mechanism",[2] after the UK fell into recession in 1990. The UK spent over £6 billion trying to keep the currency within the narrow limits with reports at the time widely noting that Soros's individual profit of £1 billion equated to over £12 for each man, woman and child in Britain[3][4][5] and dubbing Soros as "the man who broke the Bank of England".
Britain's membership of the ERM was also blamed for the prolonging of the recession at the time,[6]and Britain's exit from the ERM was seen as an economic failure which contributed significantly to the defeat of the Conservative government of John Major at the general election in May 1997, despite the strong economic recovery and significant fall in unemployment which that government had overseen after Black Wednesday.[7]
Denmark and the euro
From Wikipedia, the free encyclopedia
Denmark uses the krone as its currency and does not currently use the euro, having negotiated an opt-out from participation under the Edinburgh Agreement in 1992. In 2000, the government held a referendum on introducing the euro, which was defeated with 46.8% voting yes and 53.2% voting no. The Danish krone is part of the ERM-II mechanism, so its exchange rate is tied to within 2.25% of the euro.
Most of the large political parties in Denmark favour the introduction of the euro and the idea of a second referendum has been suggested several times since 2000. However, some important parties such as the Danish People's Party and Socialist People's Party do not currently support a referendum. Public opinion surveys have shown fluctuating support for the single currency with majorities in favour for some years after the physical introduction of the currency. However, following thefinancial crisis of 2008, support began to fall, and in late 2011, support for the euro crashed in light of the escalating European sovereign debt crisis.[1]
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