tyre monkey

I am working abroad and saving for a new scooby euro import when i come back to the UK in a few months, but have a few grands worth of Euros sitting in foreign bank account, but dont know whether to

Convert them into £, incase the pound stays strong against the Euro

Keep all money in Euros, but doubt that it will strengthen against the pound in any way

Anyone out there who has some financial knowledge or know anywhere I can get some advice. Understandably my UK accountant seems more interested in not saying the wrong thing than anything at all

Help...

Crapaud62

More info is needed to give the right advice.

Are you being paid in Euros?

What is your tax position?

Is the price of your import fixed in Sterling or Euros.

How long until you need to pay for it?

What interest are you earning on your euro account?

However, with UK interest rates now so low, there is less chance of any significant movement between the pound and the Euro. Therefore I would tend to leave alone as you will only incur charges when you FX and move funds.

Any advice from your accountant would be offset by his fees!

Regards

Sid

(Past tax accountant, current Member of Securities Institute and now Head of Offshore Compliance for major UK Bank.)

Brendan Hughes

I'm similarly interested. I hope to sell my house in the UK very soon, and have lots of pounds. At some point I will need to bring them over to Portugal to buy a house here. Key words being "At some point"... WHEN?

We just had a lecture on EMU (monetary union, not rod hull) and when I asked the question I was told two things:

1. A number of people think the Euro is Crap. One of them was the head of a seriously respected financial services company. Unfortunately, he did not explain or justify this comment as you would expect, but simply repeated it when asked. This implies it is more of an image problem than a real one. (Before I get flamed, the lecturer stated there were an equal no. of reasons for the UK to stay in or stay out, but lets NOT go there...)

2. The money markets follow the herd. And it doesn't matter who is at the head of the herd, Eddie George, Wim Duisenburg, or Kelvin Mackenzie (Sun editor), the markets will follow. In other words, they can be bloody unpredictable.

I am curious about 1 Jan 2002 when the cash Euro becomes a reality. Will people be more confident about it and boost it? Maybe more confident, but I'm advised that the movement takes place by big amounts in credit, where it's been already for a few years, not Mrs Jones in Sainsbury's.

Anyone else?

BJH

Crapaud62

I won't bore you to death with a full thesis about the Euro but...

People tend to forget that we've had the Euro for two years now. The german Mark and French Franc etc effectively ceased to be two years ago. In effect they have just been subdivisions of the Euro. In banking terms the old legacy currencies don't exist.

The arguments for and against can be split part econcomic and part political. Basically you can't have monetary union without political union, it just won't work. Once you've accepted that as a fact you then have to consider if the political union can work.

I used to work for Deutsche Bank and the Germans were very keen on the Euro as the means of having a thousand year Reich without the fighting. One German gave us a lecture on the benefits of the Euro and explained that it will work because "Germany vill make it verk!"

Basically, I agree it is crap as it will be be dragged down by the Irish and Greek economies.

Crapaud62

However,

If you do decide to keep the funds in Euros and you'll be out of the country for long enough, have you thought of putting your funds in sunny Jersey to earn interest gross ie no tax deducted at source?
Further info is available here under banking services:

http://www.internationalbanking.barclays.com/

scud8

iTrader: (1)

I'll second the comments about monetary union not working without poitical union. The USA is a good case history. The US federal government takes about 15% of GDP in federal taxation to fund central spending, and most economists estimate the EU will need even higher federal taxation to offset the lower workforce mobility in Europe (because of language, protectionist property laws and customs etc.). At least in the US they get to vote for the president!

camk

As someone who works all around Europe and actually lives on the continent I'll say that the doubters are wrong, it will work, not 100% without issues but it will work.
There is too much momentum behind this for it not to work, when it becomes a reality and the anti-Euro hype is gone then expect a resurgance of the Euro, even if only based on the fact by that time US interest rates will be 1% and European ones will be higher. In the UK its hardly ever on the news or current affairs agenda, its deliberately played down by both sides as the Pros don't want to talk about it and the anti's haven't a strong case.
As a normal Joe/Pierre/Karl Bloggs or standard business it makes absolute sense, when I go to or buy from France or Belgium I'll not need to change money, so therefore some money grabbing currency firm/banks don't get to fleece me for 10% and I can truely judge prices against each other across the Euro Zone.
Euro v's Pound changes are less predictable over the medium term than Euro v Dollar(will weaken against Euro), my advice would be if your paying for it and being paid in Euros then keep it in Euros. If your paid in pounds and paying for it in Euros or vice versa, I'd convert slowly at regular intervals and watch out for the commission rates on specific amounts. Your more likely to get stung on the commission than on severe pound/Euro exchange rate changes in the next year to be honest, escpecially on 20 grand or so.

Cheers
Cammy

tyre monkey

it is a complex story...

I am paid in Francs/euros, without taxation monthly, which I beleive is standard out here. I am not a UK taxpayer, and due to the wierd nature of my job, I am trying to avoid French Tax also. I spent less than 110 days in france dec1 to dec1 in the last 12 months. I work all over the world. But trying to avoid tax is a separate issue. So I am both saving for an anticipated Tax bill and the Scooby. But the bulk of the money will go to Mr Taxman.
The interest rate with the french bank is poor, at around 2.75%, and each account cannot go above a 30,000FF ceiling before it is liable for tax on interest.So all the money is spread around 3 or 4 accounts.

I have looked into a Jersey account, to benefit from the best rates, and like the idea of an International currency account, but my main worry is the Euros strengh when I come back to the UK this time next year.

Hope this info helps

Jamie

[Edited by tyre monkey - 12/3/2001 5:10:27 PM]

[Edited by tyre monkey - 12/3/2001 5:11:42 PM]

Crapaud62

Unfortunately, the people like Camk who can only look at the exchange bureau argument are completely missing the bigger picture.
Yes, you will save on having to change your money into several currencies as you travel around Europe and of course its easier to compare prices in the same currency. Nobody would argue with that.

The bigger issue is simply political accountability. In the USA there is political accountability as they won't propose unpopular measures if they want to be re-elected. In Euroland, there is no link between democracy and economic policy.

You can compare prices now. UK Scooby £21k, Dutch Scooby £17k. Who needs the same currency for that. Bet it will be (Euro equiv of) £22k when everything is "harmonised"