Letter: Tories and Europe

Michael Lager
Friday 09 January 1998 00:02 GMT
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Sir: The appallingly blinkered letter you published from a number of Conservative ex-ministers in favour of economic and monetary union placed EMU at the heart of Europe and favoured European dogma against British priorities. You can see why the electorate rejected them in May last year. If they are so keen on Mr Blair, let them join his party.

Although Maastricht requires economic convergence by intending EMUists, only Britain seems likely to meet the tests without cooking the books. For EMU to be a success requires sustained convergence. The improbability of this, taken with the way we predominantly trade outside Europe, the way our businesses use equity finance instead of being owned largely by big banks, the size of our financial services sector, and the way people here buy houses with variable-rate loans, all argue for ongoing strain and hardship if ever we were mad enough to go in.

The inability of a country under EMU to rely on the markets to change the price of its currency when this is required during the economic cycle means that "fiscal transfers" to or from other countries will be required instead. In plain English, this means that the successful will have to pay a tax on their success to those who have failed. The rate of the "EMU tax", those liable to pay, and those benefiting will be decided on by unelected officials rather than our elected representatives.

MICHAEL LAGER

Chairman, Braintree Constituency Conservative Association

Witham, Essex

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