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Britain not ready for euro entry LONDON: Although Britain has used five tests for euro entry to postpone joining the zone, other factors have contributed to the delay. Of the five tests set to assess whether Britain was ready to replace the pound with the euro, only one has been met. But the fail marks on the other tests are not the only reasons Britain delivered a 'not yet' verdict. The long-term economic interest of Britain is the deciding factor. British Chancellor of the Exchequer Gordon Brown does not want to jeopardize his domestic record, as the British economy is expected to grow twice as fast as those in the eurozone this year. He said "globalization means Europe has to become more outward looking... and the UK must be sure that there is enough flexibility to withstand economic stresses and strains" before joining the euro. Brown announced the "not yet" decision on Monday, leaving the door open to euro entry in future. But his plans to launch a referendum bill on the issue this fall and to try to bring the British and the eurozone economies into line are but political gestures. Another reason for the delay is the strong public opposition to joining the euro. "The government's five tests are widely seen as a convenient fig leaf for the fact that a euro referendum would almost certainly be lost, with opinion polls showing opposition running at around two- thirds," an analyst here said. Most British MPs believe the crucial test is one of political will, and that a government facing opinion polls with almost two to one against euro entry would not take the risk. Were Britain to join the euro, it would expect to play a key role in rewriting the often-criticized Stability and Growth Pact and to contribute to a much more dynamic continental economy. Although Prime Minister Tony Blair is widely believed to favour retaining the option of a referendum on the issue within the next few years, the "not yet" stance is not surprising given the 12-nation euro zone is perilously close to recession and in sore need of far-reaching structural reforms. The third factor in the decision to delay euro entry is Britain's relationship with the European Union and the United States. Britain has been at odds with France and Germany over issues such as the rationale for the Iraq War, the role of the United Nations in Iraq's post-war reconstruction, and future European strategy. Indeed, Britain's failure to adopt the euro will relegate it to the sidelines of long-term change across the Channel, observers here believe. While Britain is the second largest economy in the union, its continued exclusion will keep it off the political and economic map, especially at a time when members of the single currency area are working more closely together on matters of international and domestic importance. Brown told parliament on Monday he could "make a further Treasury assessment of the five tests which, if positive next year, would allow us at that time to put the issue before the British people in a referendum." He said "it is time to put the pro-European case... we can unite the British people round a pro-European consensus which I believe is vital for the future of this country." Britain, Denmark and Sweden are the only countries in the 15-nation European Union that have stuck to their own currencies since the euro's launch in 1999. Xinhua (China Daily 06/12/2003 page4) |
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