Hague inveighs against the `undemocratic' euro

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The Independent Online
WILLIAM HAGUE stepped up his "battle for the pound" yesterday by arguing that Britain's entry into the single currency would be a threat to democracy. In his most Eurosceptic speech so far, the Tory leader came close to ruling out joining the euro altogether when he detailed eight reasons why Britain should stay out.

Mr Hague admitted that many in his party had different views on the single currency, but they all agreed that there were great constitutional and economic risks attached to the euro.

"All of us hold this simple position together: we want to keep the pound. Keeping the pound means we can run the British economy in the interests of British businesses and British jobs," he told the European Research Group's Second Congress in London.

Mr Hague's speech is likely to infuriate Tory Europhiles such as Michael Heseltine and Kenneth Clarke, who have already criticised his commitment to scrap the National Changeover Plan.

The Tory leader, buoyed by his recent success at the European elections, insisted that keeping the pound was a "battle for democracy itself.

"There is a real risk that by handing over control of our currency we are handing over control of our taxes and spending; a real risk that we would be handing over control over powers that lie at the very heart of what it means to be a democracy."

Staying out of the euro would mean "enjoying all the advantages of exchange- rate flexibility, not just against the dollar and yen, but also against the euro itself".

Flexible exchange rates, combined with the ability to set one's own interest rates, "go together in helping to smooth out the peaks and troughs of the economic cycle".

And keeping the pound could actually lead to greater exchange-rate flexibility, he said.

Rejecting the single currency "could mean lower taxes and more jobs for Britain" and allow Britain to remain "an attractive place for overseas investment in the future".

European Commission figures showed Britain was already attracting more inward investment from outside Europe than all of Euroland put together, Mr Hague added.

Keeping the pound would also give the City of London a major advantage over rival financial centres in Europe, such as Frankfurt.

"The City is already thriving outside the eurozone."

Retaining sterling "could mean that Britain is actually more influential in the world than if we join the single currency," the Conservative leader insisted.

"The mistake of enthusiasts for the single currency is to believe that power and size are the same.

"They are not. The power of example does not depend on size," Mr Hague said.

Britain's influence in Europe depended on its example as a low-tax, free- enterprise economy, and if the euro undermined that economy it would undermine its influence, he added.