12-01-2008, 10:46 AM
Direct Action Resistance Fighter
Joined: Aug 2006
UK 'closer' to adopting the euro
Quote:The UK is "closer than ever before" to joining the euro, according to the president of the European Commission, Jose Manuel Barroso.
Speaking on a French radio show, he said British politicians were considering the move because of the effects of the global credit crunch.
However Downing Street said its position on the euro remained the same.
In 1997 Gordon Brown set five economic tests which he had to judge were met before recommending UK euro entry.
The key test is whether the UK economy is coming together with those of countries in the eurozone and whether this can be sustained in the long-term. The second test, linked to this, is whether there is sufficient flexibility to cope with economic change.
The remaining three tests assess the impact of joining the euro on jobs, on foreign investment and on the financial services industry.
Mr Brown has been seen as less keen on the UK adopting of the euro than predecessor as prime minister Tony Blair.
Opinion polls have suggested that any vote on scrapping the pound and adopting the euro would be lost, and in the UK the currency has not been a significant political issue for years.
The Treasury - which ruled in 2003 that four of the five tests had not been met - was not available for comment on the whether the tests were going to reassessed.
Mr Barroso acknowledged "the majority" of British people continued to oppose joining the eurozone.
But he said the recent economic uncertainty had made the currency a far more attractive option.
In the RTL radio/LCI television broadcast, the former prime minister of Portugal said: "We are now closer than ever before.
"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 that the current poor economic situation had emphasised the importance of the euro and the UK but added he believed a move would not take place in the immediate future.
"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", he said.
The value of sterling compared with other currencies has fallen during the credit crunch, and the UK government has had to spend massively in recent months to try to support the economy.
During the interview, Mr Barroso highlighted the situation in Denmark - an EU state which voted against joining the eurozone in 2000, but is now considering holding a new referendum on the single currency.
A Downing Street spokesman said: "We have no comment on this. Our position on the euro is the same - it has not changed."
Mr Barroso also said he expected the European Central Bank (ECB) to make a clear move to cut interest rates next week.
He said the conditions were right for a fall, but did not give further details adding: "I am awaiting decisions from the European Central Bank that go in this direction."
Jean-Claude Trichet, president of the ECB, has said that the bank could cut rates in the coming week as long as there is evidence that inflation pressures have eased.
The European Union has called for a 200bn euro boost across Europe to help stimulate an economic recovery.
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