Union and business leaders call for early decision on UK euro entry

Coinciding with the introduction of euro notes and coins on 1 January 2002, the leaders of the UK's main trade union and employer organisations have warned the government against further delay in determining its stance on joining the European single currency.

The introduction of euro notes and coins across the 12 EU Member States in the 'euro-zone' on 1 January 2002 has prompted renewed debate in the UK about the prospects of joining the European single currency. Comments on the issue by the leaders of the Trades Union Congress (TUC) and the employers' organisation CBI received widespread media coverage over the holiday period.

In a New Year message, TUC general secretary John Monks said that 2002 should be 'make your mind up time' for the government on the euro. He warned that delaying a referendum on euro entry until after the next general election would be 'disastrous' and urged the government to push ahead with the process of applying its economic tests (UK9902184N) and to start a 'serious hearts and minds campaign' in favour of euro entry. He said: 'If the decision is put off again, the international investment community will conclude - probably rightly - that new Labour simply hasn't got the bottle to face down the euro-sceptics, and that will have serious economic and political consequences.' He added that 'a clear intention to join the euro would be one effective way of bearing down on the overvalued pound.'

Though adopting a more neutral tone, Digby Jones, director-general of the CBI, also said that the UK had to decide whether or not to join the euro, and then 'get on with its life'. He told the Today programme on BBC radio that the government needed to make a decision one way or the other: 'It is the delay and the prevarication that causes the problem.' However, the text of his New Year message largely avoided the single currency issue, stressing that the introduction of euro notes and coins 'should not detract from the need for a fresh effort to get Europe back on course to a dynamic, flexible economy'. He warned the EU against 'retreating from the free market reforms agreed at the Lisbon summit (EU0004241F)', and said that business had been disappointed by EU policy initiatives such as the 'one-size-fits-all' Directive on informing and consulting workers (EU0110206F) and 'proposed rules on company restructuring which could make it possible for staff to challenge and overturn management decisions'.

The CBI is coming under pressure from anti-euro campaigners within the business community not to campaign in favour of euro entry. In July 1999, having consulted member companies, the national council of the CBI adopted a policy statement confirming its support for the principle of UK membership of the euro, once key conditions for success were in place (UK9907118N). However the CBI leadership is keeping a low profile on the issue until government ministers start to take a lead. There are also differences over the euro within the trade union movement. Bill Morris, general secretary of the Transport and General Workers' Union, the TUC's third largest affiliate, has urged the government to focus more on preventing job losses and improving public services (UK0111107F) and less on preparing for a referendum on euro entry.