Courtaulds boss queries EMU viability

Gordon Campbell, chief executive of chemicals company Courtaulds, has added his voice to a small but growing number of UK businessmen casting doubt on the feasibility of European monetary union.

Campbell said EMU without political integration is a recipe for disaster. He warned that if Britain joined at the wrong exchange rate, the country's industrial base would collapse within a few years.

Multinational companies such as Courtaulds are seen as gaining from the move to a single currency because of the savings they will make on the currency costs of cross-border business. But Mr Campbell believes the whole project could fall apart and cause irreparable long-term damage if as planned, it goes ahead on 1 January 1999 without a common pan-European political system first.

"In the absence of political union, the social tensions that will be created mean in the end that it will probably have to be unravelled," he said. "If the debate was really open and intellectually sound, it would be about simple political union and personally I would vote for that."

With regard to the separate issue of whether the UK should join monetary union, Mr Campbell said, "I don't see how we'll ever meet the convergence criteria with exchange rates and interest rates aligned with those in Europe."

Courtaulds does one third of its business in continental Europe compared with 17 per cent in the UK and 50 per cent worldwide. The company last week said it lost pounds 16m in the first half of 1997 because of the strength of the pound. A strong pound depresses foreign currency earnings translated into sterling.

Mr Campbell said he doubted that EMU would make life easier for European businessmen. He predicted increased volatility between the euro and the dollar, and said this volatility would offset the gains from no intra- European currency movements.

He said if Britain does decide to join, it has to make sure the rate at which it locks in to the single currency is right. "If we go in at the wrong rate it will lead to the de-industrialisation of Britain," he warned. "It is not like the European Exchange Rate Mechanism. Once you are in, that's it. There is no safety valve."

Until now, most press attention has gone to business leaders who support monetary union, such as Unilever's chief executive, Niall Fitzgerald, and Richard Sykes, chairman of Glaxo Welcome. Those who have openly attacked the project, such as Stanley Kalms, Dixon's chief executive, and Lord Hanson have done so out of raw opposition to greater political integration of Europe.

The Confederation of British Industry said Britain should join if it meets the convergence criteria on debt, inflation, interest rates and exchange rates as agreed in the Maastricht Treaty. "My scepticism is they won't ever be met," said Mr Campbell.

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Pricing Analyst

£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

Guru Careers: C# Project Team Lead

£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

Day In a Page

Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

The 161-page dossier that exposes Fifa's dark heart

How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

Exclusive interview with Tripoli PM Khalifa al-Ghweil

'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

Raymond Chandler's Los Angeles

How the author foretold the Californian water crisis
Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

Art attack

Chinese artist who posted funny image of President Xi Jinping facing five years in prison
Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

Cher is the new face of Marc Jacobs

Alexander Fury explains why designers are turning to august stars to front their lines
Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

'I'm climbing Ben Nevis for my daughter'

Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
10 best wedding gift ideas

It's that time of year again... 10 best wedding gift ideas

Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
Paul Scholes column: With the Premier League over for another year, here are my end of season awards

Paul Scholes column

With the Premier League over for another year, here are my end of season awards
Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

Liverpool have seen too much tragedy to forget Heysel

Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

Khan’s audition for Mayweather may turn into a no-win situation

The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor