The biggest problem with adopting the Euro is surrendering control of interest rates. Every country which adopts the Euro has to implement a Europe mandated interest rate, currently about 3½%. But look what's been happening in Germany - a recession, and in order to kickstart its economy, Germany really needs a big reduction in interest rates, perhaps to as low as ½%. But saddled with the Euro, it cannot reduce the interest rate - a reduction it badly needs.
I saw what loss of control of interest rates did to Britain between 1989-1992. First we had low interest rates at a time of economic boom. The brakes came off. House prices skyrocketed, borrowing became ridiculously easy - and that was the problem. All the late 80s wealth was perceived wealth. Everything was being bought with borrowed money. Then came the collapse - recession in 92, but interest rates cranked up to 15%!!! Thousands of businesses went bust, and people who had bought houses at high prices with 100% mortgages found themselves in negative equity - even if they sold their house at a much reduced value, they still owed money to the bank and were paying 15% interest on it.
Oh sure, the Euro is convenient for holidays, but I am sceptical to say the least about surrendering control of interest rates.
