Treasury 'adds 16 new tests' for joining the euro

Click to follow
The Independent Online

The opposing sides in the increasingly confused debate over Britain's membership in the euro claimed victory yesterday after the Treasury fleshed out the way it will assess whether the UK is ready to sign up for the single currency.

The opposing sides in the increasingly confused debate over Britain's membership in the euro claimed victory yesterday after the Treasury fleshed out the way it will assess whether the UK is ready to sign up for the single currency.

The Government has said any decision to hold a public referendum depends on an assessment of whether the UK has met five economic tests and had pledged to reveal the answer by June 2003.

The pro-euro lobby said the decision to reveal Whitehall's thinking was a clear sign that the Government was pushing ahead with plans to hold the referendum. But eurosceptic groups said the document contained new hurdles that it said would be impossible to surmount ahead of the next general election.

On one analysis the document added 16 extra tests by breaking down each of the five: on convergence, employment, investment, the City and flexibility to deal with shocks. In addition, the document states that the case for joining must be "clear and unambiguous".

The issue of economic convergence, which many see as the defining criterion, now includes analysis of trade and investment linkages, the housing market, the sectoral breakdown of output and the issue of how changes in interest rates are passed through the economy.

Janet Bush, co-director of the No Campaign, said: "There has been no progress on this very large structural question over the last four or six years and given that the test is meant to be sustainable and durable convergence there has to be a diminishing chance of that."

But a pro-euro source said that the document, combined with the Prime Minister's message to the CBI that euro membership would be of "great benefit" to manufacturers, was a positive sign for the campaign. He also pointed to the fact the Treasury will look at the argument that the process of joining the euro will in itself accelerate convergence. "That is one of the key arguments," he said.

Mr Blair said yesterday the Government's policy on the euro had not changed by "an iota", adding that the benefits in trade, stability and investment were plain to see.

Comments