The new euro zone of 300 million customers will be the world's largest currency zone. It will offer continent-wide economies of scale as well as lower costs, price transparency, and the ability to make direct comparison of investments across national boundaries.
In or out of EMU, the impact of a euro zone five times the size of our economy will be enormous. The opportunities are clear. The danger is that by self-imposed exclusion our competitiveness will suffer from increasing economic instability and higher interest rates and that our political influence on major economic decisions in Europe will be gradually eroded.
On the key issues now emerging - whether to adopt an external exchange- rate policy for the euro, how to operate the growth and stability pact and whether or not tax approximation may be desirable in a single currency zone - Britain's voice must be at the centre, not the margin, of policy formation.
The best course for our country is to prepare now to be able to join EMU when the economics are right. The Government's policy of commitment in principle to UK entry is welcome. We now need an unequivocal statement by the Government of its intention to join EMU as soon as proper convergence of our economic cycles is achieved, matched by an assurance that pursing such convergence will be a key element of domestic economic policy in coming years.Reuse content