Directors attack EMU

The Institute of Directors yesterday stepped up its campaign against economic and monetary union in Europe. A provocative speech by Ann Robinson, head of policy at the bosses' organisation, called the single currency the ``most risky policy since the dawn of democracy''.

Dr Robinson warned an audience of business people in Birmingham that a single currency looked attractive at first glance but costs would outweigh benefits for the vast majority of European businesses.

``We must hope that as we move nearer and nearer to the day when the elite of European politicians has to take the fateful decision, a degree of rational thought will prevail over the political aspirations of those who, seeking glory, trample on the livelihoods of millions of citizens,'' she said.

She argued that huge transfers of taxpayers' money would be needed to subsidise unemployment in poor regions. British business would face higher costs and taxes. Price stability would be at least as difficult to achieve as it was now, when currencies competed.

In addition, interest rate rises would hit Britons harder because of the predominance of variable rate loans compared to fixed rate borrowing in most of the EC. Britain might also face higher rates because other European countries would have to borrow more to meet their soaring pension obligations.