But the low interest, discipline and transparency benefits of a hard currency can be retained. UK domiciled corporations and banks should be allowed to opt for an ecu basis for reporting and tax as an alternative to sterling. This will lower the apparent boost to sales and profits in sterling of unchanged ecu turnover and will have the uncomfortable consequence of lowering tax takes, but if government and our major companies do not act as if they believe in hard money why should anyone else? It must also be close to suicidal to tax our corporates on profits that would not exist if, like continental competitors, they operated in hard currency.
Professor of Banking & Corporate Finance
Manchester Business School
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