Expert: Phil Woodford - 4/16/2000

Question
Hi Phil,

I`m a politics student at Birmingham University and I`m a bit stuck for ideas for the following question:

Examine whether it is realistic for any British government to claim that it intends to play a central and constructive role in the affairs of the EU so long as the UK and Sterling are not part of EMU


Answer
Oliver

My opinion is that it's unrealistic for Britain to be a leader in Europe
whilst remaining outside the single European currency.  Let's face facts.
Although there are strong arguments both for and against monetary union
in principle, the Euro is already here and will become a cash currency in
just over 18 months' time.  My personal view is that this is the final,
logical extension of the single market and that it is not really credible
to say you are a full member of the single market without being
signed up to the currency.  We will be affected by Eurozone policy on
interest rates and taxation whether we like it not.  But if we're outside
the currency group, is it very likely our views will even be considered,
let alone given significant credence?

Even if a case can be made to say that non-EMU currencies within the EU
will still have protected status within the market, is this going to be the
political reality?

My guess is that New Labour will call a referendum on the Euro soon after
the next general election.  For economic reasons, they can't leave it much
longer.  Politically, they will be at their strongest shortly after an
election victory and possibly able to carry the day with the Eurosceptic
British public.

My tip for the essay would be to start from the premise that New Labour
actually recognises the truth of the assertion that they are going to
be left stranded unless they join the Euro.  You can point to Gordon
Brown's emphasis on meeting the criteria for joining, as well as pro-Euro
statements from a range of Labour politicians over the past few years -
notably Byers, Mandelson and Blair.

Hope this is of some help.

Phil Woodford
www.philwoodford.com