Letter: Now we can start doing business over the single currency

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Sir: Now that New Labour have won the election, the Prime Minister must attend urgently to Britain's real interests in Europe.

The defeated nationalists needed enemies, but patriots know that it is in their country's interests to make friends with their neighbours, to see what we can do together that we cannot do separately.

Britain's first need is for a stable currency, not an unstable pound which makes British industry pay 40 per cent more interest for new investment than our main competitors and whose sudden surges cut harshly into the cashflow of our exporters. It is in our national interest that the European economy should not be run by the unaccountable decisions of the Bundesbank, but that the Governor of the Bank of England should be part of the decision- making process of a European currency. And it is strongly in our interest that we should be in this new currency in the first wave. Otherwise, as in the past, we will arrive after all the key decisions have been made and after we have had to raise interest rates by 2/3 per cent above their current premium in order to prevent a run out of sterling into the strongest currency in the world.

The sharp reduction in interest rates with a new currency will give a huge relief to the exchequer and the boost to industrial investment which British industry needs to recover our trade surplus, expand our labour- intensive industries and stop having to pay two million people to do nothing. That is the real way to fill the budget black hole without raising taxes.

At Maastricht, Chancellor Kohl said that he would not agree to give up the DMark without an increase in democratic accountability through an increase in the powers of the elected European Parliament. The last British government vetoed that. Our new government should support any new proposal for an open and democratic Europe.

Sir FRED CATHERWOOD

Balsham, Cambridge

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