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| Euro - Background | |||||||||||
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| Should the UK join? Published: July 25 2001 10:17GMT | Last Updated: January 3 2002 17:01GMT |
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 To see a party's contribution to the euro debate, click on the dropdown menu or scroll down the page.
 Labour government
In principle, the government is in favour of UK membership of EMU; in practice, the economic conditions must be right. The determining factor underpinning any government decision on membership of the single currency is the national economic interest and whether the economic case for joining is clear and unambiguous. If it is, there is no constitutional bar to joining.
Conservatives
The Conservative Party's Manifesto for the 2001 General Election said "We will keep the pound. Labour's plan for early entry into the euro is the single biggest threat to our economic stability. By keeping the pound we will keep control of our economic policy including the ability to set interest rates to suit British economic conditions". Personal views from the Conservative party 
Liberal Democrats
Liberal Democrat policy on the euro is to enable euro entry subject to the decision of the British people in a referendum. The practical measures necessary were set out in the autumn of 2000 by Charles Kennedy who backed the findings of an independent expert commission set up to examine the measures necessary if Britain was to adopt the euro. Their report, "Britain's Adoption of the euro," suggested the practical steps to prepare Britain for adoption of the euro. These included a regular six monthly assessment of the government's own five tests, and that the government adopt a sixth test - a competitive exchange rate. The report found that the government's inaction on the euro has been partly to blame for the damaging overvaluation of the pound. The government must urgently start to show real leadership on the euro - and send clear signals to the financial markets about its intentions. The expert commission was made up of 14 top economists, including former Monetary Policy Committee member Willem Buiter, National Institute Director Martin Weale and former top Treasury official David Peretz and was chaired by Chris Huhne MEP. The report concluded that the economy would adapt easily and successfully to life within the euro-area so long as the right exchange rate was chosen. It found that:
Personal View: Matthew Taylor, shadow chancellor 
Green Party
The Green Party believes that the EU must put social and environmental justice at the heart of its domestic and international policies. To do this we must promote strong, stable, diverse, self-reliant regional economies. But EMU is driving in the opposite direction from sustainability. EMU aims to turn Europe into one giant economic superpower, able to compete more efficiently with the US and Japan. Emphasis on competitiveness inevitably leads to lower social and environmental standards. EMU will reinforce this trend. EMU is accelerating the process of economic globalisation. There is overwhelming evidence that globalisation is responsible both for growing social inequalities and for unprecedented environmental damage. EMU also undermines democracy. If the Exchange Rate mechanism limited governments' control over interest rates and inflation targets, membership of the euro strips them of it completely. Policy becomes "one size fits all" and is driven centrally by the ECB. Much of the economic sovereignty of member states of Euroland has been pooled and handed over to European institutions, primarily the ECB. Greens therefore oppose EMU and the single currency, not for narrow nationalistic reasons, but because the economic logic of this dubious experiment is flawed and rides roughshod over our key social and environmental concerns. 
Plaid Cymru
Undoubtedly, this will be one of the most important issues the next parliament will have to tackle. The Party of Wales regards the achievement of economic and monetary union as one of the cornerstones of our economic policy. In a world where global economic forces undermine the ability of national governments to intervene effectively in the macro-economy, economic collaboration across Europe is essential in order to regain democratic control over social and economic policy. We do not see Economic and Monetary Union as a step in a relentless drive towards globalisation, but rather as a barrier against the unfettered power of international capital, and in favour of progressive social and economic values. Without the greater capacity to examine public objectives that a truly democratic Economic and Monetary Union has to offer, our people's demand for satisfying work and a fair wage, acceptable services and a clean environment remain at the mercy of financial speculators and international de-investment. We support joining the euro when the exchange rate with the pound is appropriate. Wales has suffered from Britain's decision to stay out of the single currency. The fact is that the structure of the economy of Wales is more like that of the European mainland than is that of southern England. At the same time we cannot ignore the dangers of operating uniform monetary policies across a whole continent. Wales has suffered greatly from such an approach in the UK. The success of EMU in our opinion therefore depends on the following:
Scottish Nationalist Party
The SNP want to see Scotland and the rest of the UK as part of the European single currency as soon as is practicably possible. To get there we need to join at a competitive rate of exchange and after the consent of the people in a referendum. Scotland has paid a heavy price from the double whammy of its exclusion from the eurozone and its membership of the UK single currency. With a heavily overvalued exchange rate and interest rates well in excess of what Scottish economic conditions require our economic growth, exports, investment levels and domestic competitiveness against imports have all suffered badly. As a pro-independence party we want to see Scotland's own government control all the levers of power that normal countries control. However, we recognise that in the 21st century world sovereignty has to be shared in some areas in order to be effective. And we believe that monetary policy is most effectively exercised in concert with our partners in Europe. This way we will maximise the benefits of co-operation in terms of free access to markets without exchange risk and costs. At the same time we will minimise the downsides of lost domestic sovereignty because the interest rate environment of the eurozone is more likely to be in line with the best interests of the Scottish economy than the sterling zone ever has been. Our views in this are dominated by what is in the best interests of the Scottish economy and of Scottish jobs.  Social and Democratic Labour Party
As the major pro-European party in Northern Ireland, the SDLP is convinced of the political and economic case for Economic and Monetary Union. We have always insisted on the importance of European integration for the future of our region. Both parts of Ireland have benefited from European policies. The EU's social and economic policies, as well as the creation of the single market, have transformed conditions on the island. EMU is a further step towards the creation of an integrated Europe. Monetary and economic union cannot be separated. Just as the logic of the single market ultimately demands a single currency, if the advantages of the single market are to be maintained, monetary union must be accompanied by economic union if it is to survive. This implies Europe-wide coordination of economic policy, with an even greater emphasis on regional development, to take into account variations in conditions across the EU. For Northern Ireland, membership of the euro is particularly necessary. The increasing North-South cooperation in economic and trade matters is being hindered by the monetary division of the island between the euro and non-eurozone. Currently 59 per cent of goods exports from Northern Ireland go to other EU countries, bringing £1.9bn a year into the Northern Irish economy. However, distortion of trade due to the monetary frontier has badly disrupted business. Furthermore, attracting inward investment in Northern Ireland is also undermined by non-membership of the eurozone, and the consequent risk of falling into the second division of a two-tier EU. To develop an integrated economy, to continue to attract substantial inward investment and to exploit the full potential of the single market, it will be much better for Northern Ireland to be part of the real single market of the eurozone than to be on the political and economic periphery. 
UK Independence Party
A decision about joining the euro is not primarily about economics. It's about whether Britain should remain an independent self-governing democracy Practical considerations a) The greater part of UK foreign trade and investment is with non-EU countries. The UK economy is more attuned to the flexible Anglo-Saxon model than to the rigidly regulated continental European version b) Britain, with its greater home-ownership mortgage debt, is more susceptible than other EU countries to interest rate fluctuations. The one-size-fits-all rate of the European Central Bank would rarely be right for Britain, causing recession or excessive inflation c) Pressure to adopt the euro comes mostly from a few large companies and multi-nationals. Britain's small businesses (95% of all companies), which would bear the bulk of the estimated £36bn conversion costs, are overwhelmingly opposed. The euro has no relevance to nine tenths of Britain's GDP d) Despite the 'strength' of sterling (in reality, the weakness of the euro), UK trade with EU countries has recently moved into balance for the first time in decades. The significant sterling depreciation demanded by some exporters would raise import prices and inflation e) Joining the euro will hasten the imposition of fiscal and social regulations that will price British manufacturers out of EU and world markets, and discourage investment in Britain Conclusion Adopting the euro is a political venture from which there might be no exit when the expected disaster ensues. Britain could find herself locked into the EU permanently  Ulster Unionist Party
The Ulster Unionist Party holds strongly to the view that the pound should remain the currency of the UK. Any attempt to join the single currency at this time with the euro so weak should not be considered. Self evidently a considerable burden has been placed on any business exporting to the continent and there is considerable disadvantage because of the present strong Pound. While this is impacting on many of our SMEs currently, we believe that in the long term it will be more advantageous to ensure Sterling remains outside Euroland. Northern Ireland is in a unique position because it is the only part of the UK that will have a land frontier with Eurozone. There are existing problems in border areas where because of lower taxation on petroleum and diesel as well as currency advantage, petrol retail stations have been forced out of business. The effects of this can be seen in other industries but cross border business has always had to operate in the knowledge that at different times the advantage shifts across borders. However most of the current problems stem from taxation policies and could be resolved by the Chancellor of the Exchequer.
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