George doubts wisdom of rush towards EMU

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The Independent Online
Eddie George, Governor of the Bank of England, said yesterday that he doubted the wisdom of pressing ahead with the single currency until EU countries had addressed their unemployment problem, writes Diane Coyle. But opting out would not be a soft option for the UK, he said at a Royal Institute for International Affairs conference.

Mr George said many European countries were starting to tackle high unemployment through deregulation of their labour markets. This could have a big effect on the pattern of real wages and jobs, and would make it risky to press ahead with the single currency on an arbitrary calendar.

``I am concerned that the Treaty timetable is producing a sort of sprint to the line by the end of next year which is not necessarily helpful in its immediate economic effects,'' he said.

Britain would have to pursue responsible macro-economic policies as much outside as inside monetary union, he concluded.

At the same conference, Adair Turner, director-general of the CBI, said the benefits of cementing the single market had to be weighed against the danger of industry becoming uncompetitive if tied to the single currency.