United Kingdom and the euro, February 2005

The United Kingdom has negotiated with the EU opt-out arrangements from adopting the single currency. In principle, the United Kingdom Government is in favour of UK membership of the European Union's Economic and Monetary Union (EMU), including the adoption of the euro as the currency of the country. In practice, it argues that 'the economic conditions must be right'. The determining factor underpinning the Government's decision on membership of the single currency is the national economic interest and whether the economic case for joining is clear and unambiguous.

The Government has set out five economic tests that would need to be met before it would recommend UK participation. However, the Government is committed to ensuring that the UK would be in a position to join a successful single currency, if that is what Government, Parliament and the people, in a referendum, decided, so it has an active programme of planning, details of which can be found in 'Preparation Reports', the latest of which was issued in December 2004.

In 2003 the UK Government published the draft Single European Currency (Referendum) Bill. The draft referendum question is, 'Should the United Kingdom adopt the euro as its currency?' Comments made by the Chancellor of the Exchequer in the Budget Statement in March 2004 suggested that the Government had ruled out any possibility of holding a euro referendum in the current parliament. Both the pro and anti-euro campaigns in the UK have run down their activities.

The draft euro referendum Bill should not be confused with the Bill that was introduced to the House of Commons on 25 January 2005 to allow for a referendum on the Treaty establishing a Constitution for Europe.

This In Focus provides links to some of the key information sources on the subject of the United Kingdom and the euro, highlighting some of the key issues of the debate taking place within the United Kingdom. Sources both for and against UK participation in EMU are listed. Many further information sources on the subject can be found from the link at the bottom of this In Focus.

EU: Background

Euro Central Bank: Speech: The euro - five years on, February 2004 (Speech by Jean-Claude Trichet, President of the European Central Bank, delivered at the Annual Dinner of the Guild of International Bankers, London, February 2, 2004)

National/regional/local official organisation

	United Kingdom: HM Treasury: Policy areas: The Euro
	United Kingdom: HM Treasury: Euro information
	United Kingdom: HM Treasury: Euro information: Autumn report on euro preparations, December 2004
	United Kingdom: HM Treasury: Euro Preparations Unit: Euro preparations managed transition plan. Draft for informal consultation, January 2005
	United Kingdom: Electoral Commission: Referendums: Single European currency referendum
	United Kingdom: Bills: Single European Currency (Referendum) Bill (Draft)
	United Kingdom: Parliament: House of Commons: Library: Standard Note: The draft single European currency (referendum) bill, January 2004
	Bank of England: The Bank of England and the euro

Stakeholder organisation

	Institute of Chartered Accountants in England and Wales: Library and Information service: Impact of the Euro on UK Business
	Britain in Europe: Issues: The euro
	Euro-Know
	Institute of Economic Affairs: Research Monograph, No.58, 2004: Pedro Schwartz: The euro as politics
	Business for Sterling

Commercial publisher and media

	The Economist, No.8377, 29.5.04: Investment. Foreign, redirected investment
	Financial Times, 22.01.05: Surprise at strength of UK's ties to eurozone
	Financial Times, 10.12.04: Ministers 'have made a fetish' of euro
	Financial Times, 23.11.04: Mandelson puts extra strain on Brown relationship with talk of date for euro
	Financial Times, 28.06.04: Brown 'tried to force pace on euro decision'
	Financial Times, 27.05.04: Staying out of eurozone 'has reduced share of investment'
	Financial Times, 29.03.04: Exporters' support for euro declines
	Financial Times, 22.03.04: Anti-euro campaigners poised to scale back activities
	Financial Times, 18.03.04: Euro express still in sidings as issue takes a back seat
	Financial Times, 18.03.04: Resignation in Brussels over further UK delay on euro
	Financial Times, 15.03.04: Brown set to announce annual review of the economic case for euro entry

Other

European Integration Online Papers (EIOP), Vol.8 (2004), No.17: David Howarth: Explaining British policy on the euro:

Related Topic Guides / In Focus

	ESO: In Focus: The United Kingdom and the Euro, February 2003
	ESO: In Focus: UK and the euro: Chancellor says 'Not yet', June 2003

Related Publications

Journal Articles

Chris Mulhearn and Howard R. Vane: The UK and the Euro: Debating the British Decision (The World Economy, Vol.28, No.2, February 2005, p243-258)

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