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