Maastricht wins backing of City

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LEADING City figures, including Lord Alexander, the chairman of National Westminster, and Andrew Hugh Smith, the chairman of the Stock Exchange, are calling for approval of the Maastricht treaty.

In a letter to the Times, the Lord Mayor of London, Sir Francis McWilliams, and nine chairmen of City firms argue that Britain's financial services industry would suffer badly if Britain were to become 'detached' from the rest of the European Community. They argue that London might lose its powerful position as an international financial centre.

London has 526 foreign banks and is the centre for more foreign exchange trading than New York and Tokyo put together.

The signatories, who also include Sir Michael Richardson of Smith New Court, hope pressure from the City will persuade wavering MPs to support ratification of the treaty.

A report by the European Policy Forum says that 'marginalisation' of Britain within Europe could result in the loss of head offices and financial and business services in the South-east, leading to a loss of pounds 10bn a year.

'For a country whose skills lie in serving international commerce the risk of being rendered irrelevant in international commerce is a large one.'

There would also be less direct investment in Britain. The EPF report, commissioned by the Corporation of London, the local authority for the City, estimates that after five years the stock of foreign assets in the UK would be pounds 50bn lower than otherwise.

It suggests that other EC members will move to monetary union without Britain, and argues that the costs of signing Maastricht are small. 'A country that wishes to remain a global player has to face the dimunition of sovereignty inherent in that strategy.'

If Britain did not sign the treaty it 'would probably experience a decline in political and commercial importance both in Europe and the rest of the world'.