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Euro will go ahead on time, say economists

Monday 25 August 1997 23:02 BST
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The European single currency will go ahead on schedule on 1 January 1999 with a broad membership, according to a survey of 12 eminent economists carried out by the European Movement (EM), writes John Willcock. A majority of those polled expect the currency to be broadly successful.

None of the panellists expect the UK to join EMU in the first wave, however. The panel of economists includes Patrick Minford, Professor of Economics at Liverpool University, and Tim Congdon, director of Lombard Street Research.

The EM is a cross-party pressure group with Sir Edward Heath as its president and Peter Mandelson as one of its vice-chairmen. It said yesterday that it would publish its economists' panel survey each quarter "as a contribution to the EMU debate".

The balance of the panel at the moment expects monetary union to be broadly successful. Two of the economists see this success as unqualified, whilst others list factors such as the operation of the stability pact and the approach of the European Central Bank as crucial to the success or failure of EMU.

Those who believe that EMU will be a success cite low interest rates, low unemployment and low inflation as benefits of a single currency.

Fears of the euro's failure focus on the reduction of monetary flexibility and the risk that the European Central Bank will set interest rates too high.

Most of the panellists expect membership of EMU to be broad, with between nine and 13 countries joining.

Stephen Woodard, director of the EM, said: "The single currency debate in this country has suffered from too much ill-informed speculation and too little fact. But if Britain is to make up its mind on this crucial issue, it must be discussed in an informed way, free from prejudice and hype."

The euro was unlikely to be the disaster area its opponents predicted, Mr Woodard added. "The single currency is going to happen - in or out, Britain has to be ready."

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