British Labour MEP relaunches euro debate

Britain and the Euro

British Labour MEP relaunches euro debate

Postby theeuro on 14 Jan 2009, 16:47

AFP
13 January 2009

(STRASBOURG) - Britain would be better off if it adopted the euro, a British Labour party member of the European Parliament said Tuesday, relaunching the debate with the pound near all-time lows against the common currency.

"Joining the euro would be good for British jobs, economic stability and prosperity, which it is both politically expedient and, ultimately, profoundly self-defeating to continue to ignore," Richard Corbett argued in a statement.

The MEP from Britain's ruling Labour Party said the euro's recent 10th anniversary was a good opportunity to revive the debate whether the country's long-term future lay within the eurozone.

While in the short-term Britain can survive without the euro, "the evidence suggests that indefinitely delaying entry to the single currency will harm our economy and weaken our position in Europe," he said.

There is another reason not to hold on to the pound sterling for too much longer, he added.

"With each year that passes we are delaying the benefits of the euro and the longer we leave it, the weaker our negotiating position when we finally decide to join," he argued.

"The countries that were there in the beginning, and felt the strain when the euro was going through a difficult teething process, could be forgiven for not offering the UK favourable terms on euro entry."

While asserting that Britain should not be "bounced" into the eurozone just because of the credit crunch, he also pointed out the increasing weakness of the pound in the global economy.

"While the pound is probably a big enough currency to be able to survive, it has weakened by 25 percent in the last four months against the dollar and lost about 20 percent of its value against the euro this year."

A clear majority of Britons remain opposed to abandoning the pound in favour of the euro, according to a poll published in London on January 1.

At the time, British Business Secretary Peter Mandelson said the government maintained the long-term policy objective of taking Britain into the euro but insisted: "It's not for now."

The euro did sign up one new member at the start of the year, with Slovakia becoming the 16th European Union state to adopt the currency.

In several other countries, including Sweden and Denmark, sentiment in favour of the euro, seen as a safer haven, has risen quite sharply as a result of the global financial crisis which has caused havoc with growth and employment and threatens to get even worse early this year.

In London trading Tuesday the euro was at 0.9059 pounds.

At the end of last year the euro hit an all-time high, trading close to parity with the pound, with the British currency worth just 1.02 euros.
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