Clarke pressed to rejoin ERM

Kenneth Clarke, the Chancellor, will be strongly pressed by his European partners tomorrow to take Britain back into a revamped Exchange Rate Mechanism, in preparation for joining the single currency.

However, Mr Clarke is certain to resist any such move, and European finance ministers meeting in Verona will acknowledge they have little power to force Britain to rejoin a currency pact against its will.

The idea of establishing a new ERM for those countries which do not join the single currency in the first wave, has been intensively discussed within the EU for almost a year, but will be formally proposed for the first time tomorrow at the Verona meeting.

Most member states believe those countries which do not qualify for EMU, or do not wish to join at the beginning, should agree to join a mini ERM, in order to ensure a stable relationship between the so-called "ins" and "outs". Without a new mechanism to enforce currency stability between "ins" and "outs",or, the "pre-ins", as the European Commission now calls them, the operation of the single market may be severely undermined.

For Britain, to consider re-joining an ERM in the run-up to the next election and prior to any decision to join monetary union is unthinkable. It would cause outrage among the Euro-sceptics who celebrated Britain's departure from the ERM in September 1992. However, Britain has been hoist by its own petard over the issue. For, it was John Major who first insisted, at the Cannes summit in June, that the EU should examine the relationship between the "ins" and the "outs" and the effect it might have on the single market. The setting-up of an ERM is the solution that Mr Major's partners have come up with.

At the Verona meeting, only Sweden and possibly Finland are likely to join Britain in opposing the principle of a new ERM. However, although Germany, France and the European Commission would like to oblige Britain to join, there is general acceptance that to do so would be political unwise, hardening British attitudes against the entire single currency project. Furthermore, the experts concede that there are no legal grounds for insisting that Britain should join.

Asked whether Britain should be forced to join such a pact, Yves Thibault de Silguy, the Economics Commissioner, said all 15 EU members would be expected to act as one "rugby team".

"We do not want one or two members just watching," he said. But Mr de Silguy gave no hint that sanctions could be imposed if Britain remains on the sidelines, suggesting, instead, ways of cajoling Britain into accepting the system.

Outlining the ERM options to be tabled in Verona, Mr de Silguy said one possibility would be a strict system which will be entirely optional. Another idea would an ERM so flexible that even Britain would find it acceptable to join. Commission officials have also canvassed the idea of calling a future ERM something totally different.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Developer

£35000 - £40000 per annum: Recruitment Genius: Are you familiar with the sayin...

Recruitment Genius: Hospitality Assistant

£6 - £8 per hour: Recruitment Genius: This care organisation take pride in del...

Recruitment Genius: Care Worker

£6 - £7 per hour: Recruitment Genius: This care organisation take pride in del...

Recruitment Genius: Marketing Assistant

£18000 - £25000 per annum: Recruitment Genius: A fantastic opportunity has ari...

Day In a Page

John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
Forget little green men - aliens will look like humans, says Cambridge University evolution expert

Forget little green men

Leading evolutionary biologist says aliens will look like humans
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy
UK heatwave: Temperature reaches 39.8 degrees on Central Line - the sweatiest place in London

39.8 degrees recorded on Tube

There's hot (London) and too damn hot (the Underground). Simon Usborne braved the Central line to discover what its passengers suffer
Kitchens go hi-tech: From robot chefs to recipe-shopping apps, computerised cooking is coming

Computerised cooking is coming

From apps that automatically make shopping lists from your recipe books to smart ovens and robot chefs, Kevin Maney rounds up innovations to make your mouth water
Jessie Cave interview: The Harry Potter star has published a feminist collection of cartoons

Jessie Cave's feminist cartoons

The Harry Potter star tells Alice Jones how a one-night stand changed her life
Football Beyond Borders: Even the most distruptive pupils score at homework club

Education: Football Beyond Borders

Add football to an after-school homework club, and even the naughtiest boys can score
10 best barbecue books

Fire up the barbie: 10 best barbecue books

We've got Bibles to get you grilling and smoking like a true south American pro
Wimbledon 2015: Nick Bollettieri - Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power

Nick Bollettieri's Wimbledon Files

Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power
Ron Dennis exclusive: ‘This is one of the best McLaren teams ever – we are going to do it’

‘This is one of the best McLaren teams ever – we are going to do it’

Ron Dennis shrugs off a poor start to the season in an exclusive interview, and says the glory days will come back
Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most