Euro doubts worry British bosses

  • Business
  • Wednesday, 11 Jun 2003

LONDON: Britain’s “yes but not yet” stance on euro entry has drawn support from pro-euro businessmen, but bosses on both sides of the debate said it would prolong uncertainty – the pet hate of companies everywhere. 

The Confederation of British Industry (CBI) reacted warmly to the tightrope-walking policy statement from Chancellor of the Exchequer Gordon Brown, who ruled out joining the euro for now but, in a surprise boost for the pro-euro camp, said he may look at the issue again next year. 

“We are pleased the government is doing nothing to harm the hard-won economic stability that has made the UK the most successful economy in Europe,” said CBI director-general Digby Jones. 

Gordon Brown

Bosses who favour scrapping the pound and joining Europe’s single currency say it would reduce business costs, improve trade, and cut the risk of damage to businesses from currency fluctuations. Those who oppose it fear a Europe-wide interest rate policy could damage an economy whose business cycles may be out of step with those of the mainland. 

Niall Fitzgerald, the fiercely pro-euro chief of consumer goods group Unilever, took Brown’s policy pronouncement as an indication of a growing commitment to euro membership. 

But he said the government needed to go further and act to remove the obstacles it still saw to entry. 

“Every year the UK stays out, the greater the difficulties that will be faced in competing for investment across the EU (European Union) and the more difficult it will be for the UK to remain competitive,” he warned. 

The anti-euro Institute of Directors claimed a victory of sorts, declaring that it was now unlikely the government could orchestrate full entry before the next election, due by June 2006. 

But it said continuing the “wait-and-see” approach that Prime Minister Tony Blair’s government had sustained since it first took office in 1997 could only lead to more uncertainty. 

The pro-euro Engineering Employers’ Federation also hit out at the continuing uncertainty. 

“The government has failed to remove the potentially damaging speculation surrounding the euro entry,” said its director-general Martin Temple. “We run the risk of the government being increasingly distracted from its main task of maintaining the growth and stability of the UK economy.” – Reuters  

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