The Private Investor: 'Down Bromley way, the euro is a non-starter. Sorry, Mr Blair'

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The Independent Online

On 9 June, two days late you may recall, the Chancellor of the Exchequer got up in the House of Commons and made a long and entirely predictable statement about the euro. He also published a vanload of supporting studies about everything from the long-term sterling-euro equilibrium exchange rate to the housing market. All very impressive.

Inter alia, Mr Brown indicated he was all in favour of the euro in principle and would be setting up all sorts of working parties and groups to prepare the ground for entry. He wanted to sound enthusiastic, even though everyone knows he thinks those guys in Brussels are stuck in the 1980s and have a lot to learn about the world, with Mr Brown and his clever friend Ed Balls in the role of senior tutors.For me, the euro certainly feels a very long way from usability, and I will tell you why.

If you choose to hold shares directly, the old-fashioned way via paper certificates rather than through a broker's nominee account, and those shares are euro-dominated, then the euro is just a pain. I happen to hold a few shares in the publisher of this newspaper, Independent News and Media, and recently received a cheque in connection with its recent rights issue. It was for €18, about £12, and, boy, you should try cashing such a thing. First I tried to just pay it into my (sterling) current account with NatWest Bank. I was told I could certainly do that, but here would be a charge of £5. Aha, I thought, here's my chance to be all cool and European and open a euro bank account. I got quite excited at the prospect. It was explained to me by a very helpful soul in the Bromley, Kent, branch that they would be happy to assist me in this small effort towards creating an ever-closer union of Europe's peoples.

But, it was further explained, that would avail me little because I would have to pay the £5 charge, on the grounds that they would still have to send the cheque back to its country of origin (Ireland, in this case) which is troublesome and expensive. The answer, apparently, is to ask the registrars to pay sums electronically, which I shall now investigate.

It does seem odd that, for a country supposedly in a "prepare and decide" process towards joing the euro, it is so difficult to do something as simple as cash a euro--denominated cheque. So I can exclusively report that it doesn't feel we're about to join the single currency down Bromley way. Sorry, Mr Blair.

Much better news from Rolls-Royce mid-week although, as ever, the market didn't seem that impressed. In the circumstances, maintaining the dividend was not a bad achievement, even though it has involved moving money from the reserves to cover it. The results confirmed the long trend towards Rolls making more and more of its profits from maintenance, repairs and spare parts, rather than selling new engines. They may be hard up, but which airline would skimp on looking after its planes in this day and age, you must ask yourself. It's not like leaving the service on your car for another 1,000 miles. So that business should be secure.

Which is just as well, given that deliveries of new civil engines will probably decline by about 10 per cent this year. The military side of things also seems to be going well, with the announcement by the Government that it will take 20 Hawk trainer aircraft and place options for a further 24 aircraft powered by engines assembled by Rolls, in a deal worth £160m. The Hawk will be powered by the latest variant of the Adour engine, the Mk951, which is having flight trials in South Africa. The fuss about the "black hole" in the Rolls pension scheme also seems to have died. Surely, even if everything else in British manufacturing collapses, this great concern, Rolls-Royce, has a future? The problem is that the long-term future may not be as an independent British company. Instead, it might have to find itself an alliance with an American or Continental company, such as the dreaded BMW (although such an admittedly awful prospect ought to underpin the share price). In which case getting some dividend cheques in euros ought to be the least of one's worries.


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