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Heseltine urges City EMU plan

Michael Heseltine, the Deputy Prime Minister, gave a stern warning to the City last night to prepare itself for a single currency, writes John Eisenhammer.

Giving the annual Corporation of London/Proudfoot lecture, he also spoke out vehemently against calls for relaxation of the criteria for union to enable it to go ahead according to a political timetable. "City firms should be thinking about their own preparations and how they would adjust to a single European currency," Mr Heseltine said. Despite the recent efforts by the European Commission to raise awareness of the euro and the changes it would bring, there continues to be much evidence that the big banks and other City firms are being slow in readying themselves for EMU.

"We cannot contemplate relaxing the criteria for Economic and Monetary Union. The Chancellor of the Exchequer has said that if, for political reasons, some European leaders pressed for EMU to happen without getting the economic conditions right, he would be among those arguing not to join. I agree with him 100 per cent,'' Mr Heseltine said.

The City must remain vigilant, he urged, if it is to retain and build its advantageous position as Europe's pre-eminent financial centre. "When you are the best, the competition is desperate to knock you off the top spot. Frankfurt and Paris and others are using you as a benchmark and constantly striving for improvements so that they may succeed London as Europe's number one."

"London is already Europe's financial capital. My vision is for London not just to maintain its position, but to become stronger and to stretch its lead over its rivals even further. On this rock we are building the enterprise centre of Europe,'' he said.

Mr Heseltine criticised the City for the persistence of the difficulties small firms face in raising appropriate finance. "Too many of these firms cannot raise funds in this country. Some find the backing they seek overseas - and in so doing take potentially winning products or processes out of the UK".