The Euro

UK Chancellor of the Exchequer Gordon Brown has delivered his assesment of the "5 Tests" which determine whether it is in the interests of the UK to enter European Monitary Union.

  • Are business cycles and economic structures compatible so that we and others could live comfortably with euro interest rates on a permanent basis?
    No. While we are more convergent than we were, and more convergent than a number of EMU members were before union and are now, the test is not met. We will however work to make the economy more convergent.

  • If problems emerge is there sufficient flexibility to deal with them?
    No. While we have a flexible labour market, it's not flexible enough to cope with less flexible labour markets in the Euro area. Let's work on making ourselves more flexible and try again another time.

  • Would joining EMU create better conditions for firms making long-term decisions to invest in Britain?
    Well, dunno really. It's a No just now, because we haven't achieved true convergence but were we to converge truly, madly and deeply then we reckon it's not really going to be a problem.

  • What impact would entry into EMU have on the competitive position of the UK's financial services industry, particularly the City's wholesale markets?
    Yes siree, we met a test so don't say we didn't try. Our financial services industry is doing nae bad as it is and entry to EMU would not hinder it, indeed it would help us to get a share of the action that all this EU integration creates.

  • In summary, will joining EMU promote higher growth, stability and a lasting increase in jobs?
    Not today matey, but once we converge then it'll be cool. Oh, by the way, it would help if the European Central Bank got its act together and the Stability pact could be rewritten entirely to suit us.

In summary, we're making progress and we really do want you 'Europeans' to buy more of our stuff. Problem is that you couldn't run a piss up in a brewery and we're fond of piss ups which have a certain order about them, anything less isn't cricket, you know? Tell you what - we'll work on convergence but you really have to sort out the Growth and Stability Pact and get the ECB working properly, then we'll have something to talk about. And another thing - don't even think of criticising Her Majesty's Treasury until you have read (and understood) our 18 'Manuals' on how to say 'non' nicely.

Posted by Paul at June 9, 2003 07:17 PM |
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