Letter: Into battle over EMU

Peter Johnson
Monday 13 October 1997 23:02 BST
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Sir: So, with a combination of nudges, winks and denials, plus encouraging "come on in, the water's lovely" noises from across the Channel, the process of creating an atmosphere in which British participation in European monetary union (EMU) becomes a self-fulfilling prophecy has started.

Given the Government's pro-European, collectivist instincts, and the views of some big business, it is no surprise that an attempt is being made to bounce us into EMU. Everything possible should be done, however, to ensure that one of the most important decisions ever to face this country is not taken without the proper debate which has been lacking so far, and which proponents of EMU will try to avoid.

Whilst the euro should lead to very large savings in costs and a general simplification of business transactions, and I have no objections to it in principle if it can work, nobody has managed to persuade me that a common currency can work in an area with such large disparities of income between member states, where member states are at different points in the business cycle and therefore require different interest rates, where labour is not mobile, and where there is no arrangement for redistributing wealth from the more to the less prosperous areas through a federal tax and benefit system, as in the US, from where warnings about the problems of EMU have recently begun to emanate.

If these questions cannot be answered satisfactorily, the assumption must be that EMU is likely to cause enormous social, economic and possibly political dislocation, the effects of which we could not avoid even if we do not join.

PETER JOHNSON

East Preston, West Sussex

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