Firms wage war on the Euro

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The Independent Online
MORE THAN 100 leading businessmen yesterday launched a pounds 1m campaign against the European single currency, claiming the venture was too risky.

Yesterday, at the launch of Business for Sterling, the former British Rail chairman and Labour minister, Lord Marsh, pointed to a new pounds 500m investment by Honda as proof that Britain could survive outside Economic and Monetary Union (EMU).

The group is backed by the heads of the Institute of Directors and Federation of Small Businesses, but says that its resources will never match those pumped in by Europe for pro-EMU campaigns.

Lord Marsh said the organisation would open a campaign office. It would raise whatever funds were necessary to put its case across, he added.

"This organisation kills the argument that business is in favour of entry. There is a serious argument to be had because to a lot of businessmen it is something they fear and worry about," he said.

Britain would not suffer by staying out of EMU, even for a considerable time, he said, but there were grave dangers in joining. Britain's economy was different in many ways from those in the rest of Europe.

"If there is a collapse over the next two or three years and we are members, we will suffer more than any other country in Europe," he said.

Business For Sterling, a non-party political organisation, would lobby against joining EMU unless it was proved an absolute success, he added. However, he ruled out taking the attitude that Britain should never join EMU on the grounds of national sovereignty.

Tim Melville-Ross, director-general of the Institute of Directors, was among supporters present at the launch.

"Many UK businesses just haven't heard the arguments against EMU before - it is a matter of education. The danger is that many companies try to stay `on message' with the Government and are unaware of the wider economic difficulties that joining EMU could cause," he said.

"The problem is one of power as well. UK citizens have the power to throw out their government, as happened in 1997. But at the European level they will not have such a democratic right. Therefore, there are tremendous political as well as economic dangers."

Brian Prime, executive director of the Federation of Small Businesses, said conservative estimates put the cost of introducing the single currency at pounds 57bn.

However, the European Movement responded by claiming that most business people actually supported joining the single currency. One of the movement's supporters, the chairman of Abbey National Lord Tugendhat, said that Britain should join soon in order to help shape events.

"We will be better placed to help shape the new currency as well as to influence other issues of great concern to us within Europe and beyond if we participate as soon as circumstances permit. The opportunities provided by the Euro area will help to enhance the competitiveness of our economy and our companies," he said.