Euro Myths - Business, Investment and Jobs (Andrew Duff MEP)

Andrew Duff MEP <info@andrewduffmep.org.uk>

Business, Investment and Jobs

Overseas investors want Britain to rule out the option to join a successful single currency. This is untrue. They have repeatedly warned of the dangers of doing so. Jac Nasser, President and Chief Executive of Ford has said: "When we sit down and think about a major investment, our assumption is that the UK will be within the euro-zone at least some time during the lifetime of that investment."
Sterling would be likely to be more stable and therefore better for business, if Britain ruled out the option to join a successful single currency. This is untrue. Global financier George Soros has said: "I think that sterling will be in that case in a very dangerous position because it would be caught between two very large currency zones."
The City would be better off outside the EU.This is untrue. Graham Bishop, European Financial Affairs Advisor at Salomon Smith Barney, has said: "Withdrawal from EU would cut the City off from the Single Market of 370 million consumers which is one of the great growth markets of the world. Naturally, this would have a damaging effect on British jobs, both current and future."
The City assumes Britain will rule out the option to join a successful single currency. This is untrue. Sir Michael Jenkins, Vice-Chairman of Dresdner Kleinwort Benson has said: "There is still a strong perception, widely held internationally, that Britain is on course to join the euro in a few years time. Were this assumption to be put into question, it would lead to a serious rethink by the foreign owners of many of the Cityâs financial institutions about where their core activities should be located."
Ruling out the option to join a successful single currency would save British businesses from having to invest in the facilities to trade in euros. This is untrue. Leo Martin, Director of EMU Services at KPMG has said: "Many UK companies without any trading links to the euro-zone themselves may still be forced in the next few years to trade in euros because their customers are getting euros income and will want to be paid in euros."
Joining a successful single currency would cost British business more in preparation costs than they would save in transaction costs. This is untrue. The CBI has estimated that "EMU will reduce business transaction costs by 0.4% of GDP" - this saving will be made every year after we joined. It estimated the costs of preparation and transition to be a one-off cost of "probably no more than 0.5% of GDP."
Most of business wants Britain to rule out the option to join a successful single currency. This is untrue. The opposite is in fact the case. A poll by the anti-European Institute of Directors found that 68% of businesses wanted Britain to keep the option to join a successful single currency. A similar poll by the CBI put the figure at 83%.
Countries inside the single currency are expected to have poor growth during 2000. This is untrue. Most estimates predict euro-zone growth to be between 2.7% (NatWest Group) and 3.2% (Salomon Smith Barney).
Britain's membership of the EU risks jeopardising our historically superior employment creation record. This is untrue. Simon Tilford, Germany analyst at the Economist Intelligence Unit has said: "While the British performance has been better than a few euro-area members in the 1990s, it has been worse than most members, including France, and is worse than the euro-area as a whole."

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