The Euro

As a member of the European Union, the United Kingdom has the option of adopting the euro as its currency. However, the subject remains politically controversial, not least since the United Kingdom was forced to withdraw from its precursor, the European Exchange Rate Mechanism. The pound did not join the Second European Exchange Rate Mechanism (ERM II) after the euro was created.

Denmark and the UK have a unique opt-out from entry to the euro. Technically, every other EU nation must eventually sign up; however, this can be delayed indefinitely (as in the case of Sweden) by refusing to join ERM II.

The idea of replacing the pound with the euro has been controversial with some sectors of the British public because of its identity as a symbol of British nationalism

In Scotland there is additional concern that the adoption of the euro would mean the end of regionally distinctive banknotes, as the European Central Bank do not permit national or sub-national designs of the banknotes.