Updated April 2002
What is the EURO?
The Single Currency, Economic and Monetary
Union (EMU), known as the Euro, was launched on 1 January
1999. The conversion rates of participating national
currencies were irrevocably fixed and the Euro became
legal tender in the 11 countries. Coins and notes began
to be circulated from January 2002.
Who's in it?
Participating countries in the Eurozone
are: Austria, Belgium, Finland, France, Germany, Ireland,
Italy, Luxembourg, the Netherlands, Portugal and Spain.
Those currently out of the Eurozone are Denmark, Greece,
Sweden and the UK.
UK Government Position
In principle the UK Government is in
favour of joining; in practice the economic conditions
must be right. The Government has stated that if it
is clearly and unambiguously in the national economic
interest to join, there is no constitutional bar to
The Chancellor's Five Economic Tests
will define whether a clear and unambiguous case can
be made. They are:
- sustainable convergence between Britain and
the economies of a single currency;
- whether there is sufficient flexibility to
cope with economic change;
- the effect on investment;
- the impact on our financial services industry;
- whether it is good for employment.
The Government has said that the Treasury
will complete an assessment of the Five Tests within
two years of the start of this Parliament. The assessment
has not yet started, but the necessary preliminary analysis
On the basis of the assessment, the
Government will take a decision on whether the Five
Tests have been met. If the Government recommends UK
entry, it will be put to a vote in Parliament and then
to a referendum of the British people. Government, Parliament
and the people must all agree.
TUC / STUC Position
British Trade Unions have a range of
views on the Euro and its potential impact on union
members. Unions representing workers in manu-facturing
industry have been alarmed at the impact of the high
pound in relation to the Euro. However unions in the
public sector see that the adjustment of the exchange
rate could impact on stability and lead to inflationary
surges which could prompt the independent Monetary Policy
Committee to impose interest rate increases and the
Government to reduce public spending.
Therefore the TUC and the STUC have
both taken a cautious approach to the subject which
accommodates all positions and emphasises the need for
a public debate.
(TUC General Council Report Chapter
3 - The European Dimension August 2001)
As the largest union representing public
sector workers UNISON is opposed to UK membership of
the Euro. UNISON's EURO policy was most recently debated
at National Conference 2001, (UNISON and a Single Currency:
Motions 6 and 9). Opposition is based on 3 principles:
- The deflationary effect of EMU on employment and
- The impact of the rigid convergence criteria and
stability pact on public spending and welfare provision.
- The loss of economic control to an undemocratic,
unaccountable European Central Bank.
We welcome Gordon Brown's 5 economic
tests but believe that a greater emphasis should be
placed on employment and growth and the Public Sector.
Our principal concern is EMU's impact
on public spending, the provision and quality of public
services and the knock-on effect on jobs within the
public sector. We fear that the existing convergence
criteria (which limits public expenditure deficit to
3% of GDP) will effectively cap expenditure for years
Recent developments between the Chancellor
and the European Commission illustrate our concerns.
The European Commission has challenged the Chancellor's
public spending plans for the next three years. The
Commission believes an increase in public spending will
mean the Government effectively exceeds the public spending
deficit level of 3% and therefore strays outside the
Gordon Brown quite rightly has challenged
the Commission's assessment and has made it clear that
he intends to continue with his ambitious public spending
plans. Whilst he should be congratulated on this, it
should be noted that such restrictions and inflexibility
are part and parcel of economic and monetary union and
do by their nature impinge on national parliaments'
(UNISON Policy Document: Jobs, Growth
and the Euro, 2001)
UNISON Scotland's Position
UNISON Scotland is concerned about
the impact of EMU on regions within the UK. Scottish
Council February 1999 agreed a motion stating that:
"EMU fails to provide adequate scope for either
a domestic or European response to differential regional
economic performance" UNISON Scotland believes
public debate over future UK membership of the Single
Currency has been superficial at best. The implications
of EMU on the economies of the countries and regions
of the UK has attracted insufficient attention. Whether
or not the UK ultimately joins the single currency,
EMU will have profound consequences for regional economies.
UNISON Scotland supports the re-invigoration
of regional policy at home and in Brussels, to ensure
that economic growth is distributed in an equitable
way. Public services are crucial in supporting economic
development activity, and job creation in both public
and private sectors.
Action for Branches:
- Discuss EMU at your branches - invite guest speakers.
- Write to local newspapers / participate in radio
- expressing UNISON concerns on EMU, to encourage
- Speak to your employer about EMU, explain to them