The Euro and its consequences for the United Kingdom

(This article is under construction and will only consist of key bullet points as it is being


European Government's Accounting Practices

Unfunded Pension Liabilities

The amount of unfunded pension liabilities in Europe are huge. Even the United Kingdom, which has one of the lowest national debts in Europe has very considerable unfunded pension liabilities. Most Governments and Central Bankers have little understanding of these liabilities as no official estimate has ever been produced. Nevertheless these liabilities reprasent real promises given by Governments which were never properly costed. Most of the liabilities were incurred in the socialist atmosphere of the 1970s when politicians were free with their promises and electorates were not sophisticated enough to understand the true cost to future generations of such promises.

The only estimate published (since believed to have been withdrawn under pressure - possibly from embarrassed Governments) was by a Dutch insurer in 1990:
UPL in

ECU Billion

% UPL/GDP%Debt/GDP%Total/GDP
Belgium184112 128240
Denmark10897 67164
France1,078106 47153
Germany (West)2,290 17944223
Greece112196 96292
Ireland38103 102205
Italy1,723184 98282
Luxembourg19238 7245
Netherlands510210 79289
Portugal85167 68235
Spain770183 45228
United Kingdom58270 40110
Total7499145 60205

The effect of a single currency is that the United Kingdom would have to take on its share of Europe's Unfunded Pension Liabilities - equivalent to about 100% of our GDP which is currently some £700 Billion. One currency must ultimately mean one balance sheet with common assets and liabilities. Therefore, if the United Kingdom enters a single currency every man, woman and child would take on a European liability of some £11,864 each - more than doubling the debt per head.

Copyright David Shaw MP, April 1996