What is the European Central Bank up to?

The European Central Bank (ECB) is currently carrying out a stately progress. Commentators say that it will implement eventually the dreaded quantative easing (printing money). However, this is a bit late compared with the U.S Federal Reserve and our very own, the one only Bank of England, in association with the UK Treasury. At each stage of this monetary cycle the ECB has been dragged kicking to act.
It also shows a natural bias of supporting the requirements of Germany rather than the Mediterranean members of the Eurozone, Spain, Italy, Portugal and Greece. The Frankfurt-based institution would probably prefer a hard Euro and would love to be the world's reserve currency.
The European Union's economic and monetary affairs commissioner Joaquin Almunia has stated that no member country will leave the Eurozone and noted that other countries wanted to join. However, Almunia has been unable to protect Ireland, for example, where the euro exchange rate has given its significant trade partner the UK a major advantage.

The low pound is not making a dent in trade figures.

Looking back at my posts I realise that I might both have praised and condemned the British government's engineered fall in sterling. The main factor in favour of the lower pound is that it would help make exports cheaper and imports more expensive. However, the low pound is not making a dent in UK trade figures. On an anecdotal basis it is making West End stores and restaurants busy. The low pound is also diverting UK tourists to non-euro destinations such as Turkey
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However, low sterling contradicts the previous policy of the Bank of England to use the exchange rate of keeping a lid on inflation. There are worries that inflation will soar when the central bank takes too long to raise interest rates when the economy recovers. Another factor would the lack of government approval for tightening. Over the last year there is the sense that the Bank of England lost control of monetary events and lost its supposed independence.
On balance, I don't like a cheap pound but I think that having your own exchange rate is a great shock absorber when the government has made a complete horlicks of economic policy. It is probably not appreciated by our Eurozone neighbours, who want to sell into Britain (Treasure Island).

Official denials about Euro are not very convincing.

It looks to me that the official denials by the British government about not
joining the Euro are not very convincing. It has been left to officials to poo-poo the idea of jettisoning sterling and joining the single currency. Lord Mandelson has said there are more pressing problems to sort out but the long-term objective is to join the Euro. That is not much of a denial.
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I remember when the single currency was set up there was talk of prices converging. However, the price of a coffee in a cafe is very different in Finland compared with Portugal. Also one attraction for the Club Med countries is that they would swap their weak currencies with a strong one. However, despite the D-Mark being fixed at a relatively high rate, the Club Med countries have been defenceless against German exporters. They have been unable to protect their domestic companies from competitors, which have cut costs and benefited from lower inflation.
It is in the nature of things that central banks are heavily criticised but the Frankfurt-based European Central Bank recently kept interest rates unnecessarily high when it could have supported the U.S Federal Reserve Bank when it was cutting.
This made the dollar weaker than it should have been.

European Referendum?

Are we going to get one? Probably not. Does it matter? It depends on your
acceptance of the European project of a common foreign policy, Euro army
etc. The Europeans would probably prefer a federal structure for the UK
and are nearly there with the various administrations in Scotland, Wales
and Northern Ireland. Brown/Blair are always tight-lipped on what they
get up to at this Euro summits, although there is much talk about red
lines.
One problem is the UK's lack of membership of the Euro zone. There is also the possible departure of the Club Med countries. People say this can't happen but in Italy the politicians have been talking about the possibility of such a
move. If Italy had the lira, which they could devalue, then this would be
some protection against German exports.