Letter: Speak the truth about monetary union

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The Independent Online
From Mr Adam Savill

Sir: Hugh Dykes (letter, 6 January) is right to claim that the Conservative Party's fortunes would improve if they spoke the truth about European Monetary Union. Unfortunately, his interpretation justifies Britain's participation in a fortress Europe currency on the grounds of cost transparency, saving on foreign exchange transactions and reducing waste.

Woolly thinking such as this is in danger of dealing a mortal blow to the Tories' election hopes and Britain's future economic prosperity.

Emu would not give cost transparency, because of individual market adaptations such as the Italian preference for top open washing machines and the British for right-hand-drive cars. Foreign exchange transactions account for less than 0.4 per cent of GDP, and anyway international companies hedge against exchange rate variations to protect profits. Britain's unique economic profile of public spending, variable rate mortgages and business cycle means that it is vital to be free to set interest rates to suit our needs.

Much of Britain's economic interests lie where 60 per cent of our exports and 75 per cent of overseas investment go, outside the European Union. Mr Dykes will find that the answer to the Conservative Party's revival and Britain's future prosperity lies in combining a practical approach to the EU while maximising our interest elsewhere.

Emu binds us to Europe when we should be looking outwards, to sell chemicals to the US, insurance to France, whisky to Japan, and let the fortress Europeans follow in our wake.

Yours faithfully,

Adam Savill

London, SW15

6 January

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