Friday

30th Sep 2016

Britain closer to euro, Barroso says

  • President Barroso (r) says UK officials are warming up to the euro (Photo: European Community)

The global credit crunch has sparked a debate about joining the euro among "people who matter in Britain," European Commission President Jose Manuel Barroso has said.

Speaking on a French RTL radio and LCI television show on Sunday (30 November), Mr Barroso argued that the entry to the eurozone of some EU member states who had previously strongly opposed the move is "now closer than ever before."

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"I'm not going to break the confidentiality of certain conversations, but some British politicians have already told me, 'If we had the euro, we would have been better off'," he said.

"I don't mean to say that it will be tomorrow and I know that the majority in Britain are still opposed, but there is a period of consideration under way and the people who matter in Britain are currently thinking about it", the former Portuguese prime minister added.

Apart from the countries that joined the EU in 2004 and 2007, the UK is one of three western European member states - along with Sweden and Denmark - that have abstained from joining the common currency, partly due to the views of the current British prime minister Gordon Brown.

Despite the Labour party promising to adopt the euro ahead of its election in 1997, current leader and former finance minister Gordon Brown has historically resisted such calls, arguing that the British economy was not ready.

He has over the years presented several reports describing how the scrapping of the pound would harm employment and investment in the country's jobs and investment.

But according to the head of the EU's executive, the financial crisis has now changed the argument. The pound has suffered from problems in both the financial sector and the real economy, with 2 million jobs in the UK expected to go by the end of this year.

A Downing Street spokesperson played down suggestions by Mr Barroso however, saying: "We have no comment on this. Our position on the euro is the same - it has not changed," BBC reported.

Iceland considering unilateral euro adoption

A similar debate to that in Britain is a step further in Denmark, with government officials actively explaining to the public the country's cost in not being part of the eurozone, Mr Barroso suggested.

Danish Prime Minister Anders Fogh Rasmussen said last month that he would try to achieve a broad public consensus on holding a referendum on the euro,, which analysts expect in March or April next year.

Meanwhile, Iceland is considering switching to the euro even without a green light from EU institutions and despite their warnings against such a unilateral move.

"People are looking into the possibility of [something similar to] 'dollarisation,' or unilateral adoption of the euro, which would probably raise a lot of eyebrows in the European Union," Icelandic Prime Minister Geir Haarde said in an interview on Saturday (29 November), Reuters reported.

Mr Haarde said that the issue is "an open question at the moment," while noting that the process of joining the EU and the common currency according to the normal procedures and guidelines would take two to three years.

"Clearly, this debate is not the answer to the current crisis," he said. Until now, the prime minister's Independence Party has been sceptical about EU membership.

For its part, the European Commission has warned Reykjavik it cannot adopt the euro without joining the 27-strong Union.

The eurozone currently consists of 15 member states, with Slovakia set to join on 1 January 2009.

New EU rules on financial products in limbo

A feud between MEPs and the EU commission is threatening to derail financial services regulation that would protect consumers from misleading investment products.

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