Letter: ERM is vital to the Single Market's success

Mr R. B. Cross
Wednesday 23 September 1992 18:02 EDT
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Sir: The main argument for ERM entry at DM 2.95 was that this would make the UK's commitment to low inflation credible. The ERM parity proved not to be credible. This in turn has extinguished the credibility of those who advocated or prosecuted ERM entry.

The new environment requires a credible policy, which in turn requires credibility in economic advisers and policy-makers. On the basis of their credibility argument, those who advocated or prosecuted ERM entry should retire gracefully from the making of economic policy. Otherwise the opportunities presented by the new environment will be lost as those responsible for the ERM debacle attempt to cover their tracks.

Yours faithfully,

R. B. CROSS

Senior Lecturer

Department of Economics

University of Strathclyde

Glasgow

22 September

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