Wanna Argument?
The Euro
Let the people decide?
The Danish vote may end up putting the Tory leadership under pressure from their Eurosceptic members to totally dismiss membership of the single currency at any stage. The Labour line, however, has always been that we would not take part in this parliament, but that there would be a referendum early in the next parliament if they were re-elected. We would only apply to join if it was in Britain's economic interests to join and we would judge that by 5 "economic tests" set by Gordon Brown. These questions were:
- Would joining EMU create better conditions for firms making long-term decisions to invest in the UK?
- How would adopting the single currency affect our financial services?
- Are business cycles and economic structures compatible so that we and others in Europe could live comfortably with euro interest rates on a permanent basis?
- If problems do emerge, is there sufficient flexibility to deal with them?
- Will joining EMU help to promote higher growth, stability and a lasting increase in jobs?
The UK is allowed under the terms of the Maastricht Treaty to choose if and when it wants to join the single currency. The government has taken the view that it supports the single currency in principle, and has put in place the necessary preparations for the UK to join if we should choose to.
In the City much of the preparation for the Euro has already been done. This was to ensure that they were ready when the single currency started on Jan.1 1999. This had to be the case as so much of the trade in financial markets is done with other countries in Europe and may now be done in Euros.