Euro Policy
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 joining.
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;
and
- 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
is underway.
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.
http://www.hmtreasury.gov.uk/topics/
topics_euro/topics_emu_index.cfm
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)
http://www.tuc.org.uk/congress/tuc-3617-f0.cfm
UNISON's view
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 growth.
- 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 to come.
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 criteria.
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' spending
plans.
(UNISON Policy Document: Jobs, Growth
and the Euro, 2001)
http://www.unison.org.uk/resources/index.htm
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 phone-ins
- expressing UNISON concerns on EMU, to encourage wider
debate.
- Speak to your employer about EMU, explain to them
UNISON's position.
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Scotland's
public service union
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