Britain 'should embrace EMU'
Friday 18 October 1996
Britain, he said, faced a critical set of choices over the next 18 months over EMU and further European integration. "The issues are vital to business prosperity."
Mr FitzGerald said there were two kinds of Euro-sceptics - the "honest" ones, who objected to the loss of political sovereignty, and then cast about for economic arguments to justify their case; and those who deluded themselves that Britain could somehow stay out of EMU but enjoy the fruits of the unified market. Both were wrong, Mr FitzGerald said.
The business arguments for EMU and fuller integration were overwhelming, he said. The continental countries would drive ahead with EMU with or without Britain. If Britain did hold back, then it also risked finding itself ejected from the single market, with disastrous consequences.
Businessmen should take the lead in the argument, and not leave it to politicians, he said, as "we are hardly likely to get objective debate about critical issues in a tense pre-election period".
Mr FitzGerald singled out a recent study by the Institute of Economic Affairs for vilification. The study by Brian Hindley and Martin Howe concluded that "it is in practice hard to tell whether leaving the EU 'cold turkey' would make Britain better or worse off".
Mr FitzGerald said: "This remarkable conclusion defies all the experience of what has happened in the past quarter century. It is a classic piece of economists' dither - on the one hand this, on the other hand that.
"It has little to do with business reality. It is a fact that trade patterns have been transformed. It is a fact that economic integration has become very deep."
Multinational businesses such as Unilever no longer thought about national markets, but a European market, he said.
Britain would suffer if it did leave or held back from EMU, Mr FitzGerald warned: "Prices would be higher because we would lose the advantage of scale economies which the single market has made possible. Investment would suffer once the scintilla of a suspicion that Britain might not remain fully within the single market gained even a modest credibility."
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