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Mon, May 05, 2003 - Page 12 News List

British government prepared to decide on Euro this June

MEMBERSHIP TESTS The Labour party has said that indications of meeting its economic requirements must be clear and unambiguous

AFP , LONDON

The British government is preparing to deliver a verdict on whether its five economic tests for joining the euro have been met, the prerequisite for a public referendum on the issue.

A decision on the self-imposed tests, which were announced by Chancellor of the Exchequer Gordon Brown in October 1997, is due by the first week of June at the latest, though a verdict is expected before then.

The Labour government says it is in favor, in principle, of joining European Economic and Monetary Union (EMU), but only if the economic conditions are right.

The government has laid out five tests to determine whether membership of the single European currency "is the national economic interest and whether the economic case for joining is clear and unambiguous."

The five tests are:

Are business cycles and economic structures compatible so that we and others could live comfortably with euro interest rates on a permanent basis?

If problems emerge is there sufficient flexibility to deal with them?

Would joining EMU create better conditions for firms making long-term decisions to invest in Britain?

What impact would entry into EMU have on the competitive position of the British financial services industry, particularly London's wholesale markets?

In summary, will joining EMU promote higher growth, stability and a lasting increase in jobs?

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