Frk Eur Igc Etf Discussion Threads

[fse] 18/6/2005 00:03

>AG...
another resoundingly masterful post from you.
dont you think you should seek treatment ?

[chambeaj] 11/2/2005 07:50

FRANKFURT (AFX) - Germany's jobless figure in February is expected to soar
to another new record of more than 5.1 mln people, according to Bild newspaper,
citing experts in the Federal Labour Agency and IFO and DIW research institutes.
It said the higher figures are due to the labour market reforms which added
those receiving welfare payments to the jobless statistics effective Jan 1.
In January, the unadjusted jobless total rose to a new record of 5.037 mln.
mog/jlw

[marquis] 04/2/2005 09:16

February 04, 2005 TIMESONLINE

Cover-up row over £27 billion secret of Black Wednesday
BY PHILIP WEBSTER, POLITICAL EDITOR

HIGHLY sensitive Treasury papers on the events leading to Black Wednesday in 1992 are being kept secret at the request of John Major and Lord Lamont of Lerwick, Prime Minister and Chancellor at the time, The Times has learnt.
Senior officials are furious that the documents, which should have been published under the Freedom of Information Act on Tuesday, are being held back, apparently on the orders of Sir Andrew Turnbull, the Cabinet Secretary, to give Mr Major and Lord Lamont more time to study them.

The delay has raised fears among Treasury officials that publication could be delayed indefinitely, or that key passages will be removed to prevent embarrassment to figures in one of the most humiliating episodes in recent economic history, when Britain left the European exchange-rate mechanism on September 16, 1992, and the Bank of England reputedly spent £27 billion of reserves propping up sterling.
There is also anger among some officials at Sir Andrew's position. He worked in senior roles for both Mr Major and Lord Lamont. In a febrile atmosphere in Whitehall, there were accusations that the "Old Boy network" had held up publication. But sources close to the two politicians insisted last night that they were not trying to block the papers.
Mr Major's office said that he had been told of plans to publish them only while travelling in America on Wednesday. It said that it would have been impossible for him to give them his proper attention while on a speaking tour thousands of miles away and that he had asked to look at them when he returns to London next week. "There is no attempt to play for time," an official said. "He will look through this next week."
Lord Lamont told The Times: "I am relaxed. I will read the papers. They are being delivered."
Senior Conservative sources accused the Treasury of trying to rush out the documents to embarrass the party. An official said: "There is an intriguing disparity between the speed with which they are trying to get these papers out and their singular failure to respond to some of the requests other papers and parties have made.
"We will be watching this like a hawk to ensure that there are no double standards here."
Other Tories accused the Treasury of trying to create a row in order to remind people of Black Wednesday near an expected election.
It is also the biggest test so far of the Freedom of Information Act which came into force on January 1, and the readiness of Whitehall to yield up secrets.
The Treasury had been asked by the Financial Times to publish its evaluation of events leading to the ERM exit.
The papers were supposed to have been produced on Tuesday, 20 days after receipt of the application. But they have been delayed all week. When Mr Major and Lord Lamont were told of the intention to publish yesterday afternoon and that they would receive the papers several hours in advance, they are believed to have raised objections, saying they needed time to read the five or six papers, comprising 200 pages.
But the delay has caused anger. Insiders point out that officials named in the Hutton report on the death of David Kelly received it only a day in advance. Publication had been approved by the Treasury and the Cabinet Secretary, The Times has been told. The documents were sent to Mr Major and Lord Lamont "out of courtesy", as they are named in them. The guidance is that former ministers should be informed, although there is no provision in the legislation for delays.
One insider said that they had no right under the legislation to demand changes or to seek suppression of the entire document. "So why are they buying time?" The issue has undertones because the Conservatives will suspect the Government of being keener to disclose papers that are damaging to them.
A key part of Labour's election campaign will be to remind voters of the economic crisis when interest rates hit 15 per cent after being raised twice on Black Wednesday.

Mr Major denied last night that he was blocking the release of papers. He said through a spokesman that such reports were "wholly untrue".
Senior Tory sources suggested that malicious rumours were being put about as part of a political game.

The Cabinet Office pointed out last night that Mr Major and Lord Lamont had been informed in accordance with guidance to officials. It refused to comment on whether Sir Andrew had ordered the delay.
In an official statement last night the Treasury said that the papers would be released after all normal procedures had been gone through. An official said that, despite the delays, publication would happen "however long it takes".
HUMILIATING DAY
11am Norman Lamont raises interest rates from 10 per cent to 12 per cent after frenzied selling of sterling on the exchanges
2pm Rates go up to 15 per cent as £27 billion is speculated on propping up the pound. The net loss is put at £4 billion-£10 billion
7pm Mr Lamont withdraws from the ERM and drops the second rate rise

[marquis] 26/11/2003 17:49

Germany and France between them drew up the rules of the Stability Pact for the Euro. "Do as I say, and not as I do". Of course platitudes will used to apologise for these rule breakers, and so they will continue breaking them whilst 'making efforts to come into line.'

[bluemerle] 18/10/2003 10:40

A lot of people do not know anything about the new EU Constitution for Europe. Please go to:-



And add your voice to those who want a say in the future of our country.

[marquis] 18/10/2003 09:36

EU split as France ignores euro rulebook
By Stephen Castle in Brussels
07 October 2003


A political crisis over the tattered rulebook of the European single currency deepened last night as ministers argued in public over how to deal with France's persistent breaches of the euro's rules.

[marquis] 01/7/2003 07:50

Paris in the spring, and the French economy is revolting
Independent - 2 May 2003
John Lichfield in Paris

The length, and anger, of the traditional May Day labour marches in France yesterday told their own story: 300,000 people on the march, compared to 90,000 on the last comparable occasion in 2001. This is going to be a hot May for the French government and a chilly May for the French economy.

After five years in which France became, against all expectations, the economic locomotive for Europe, or at least euro land, the French economy has jumped the rails. Growth has collapsed, and according to the latest, official statistics, may have slipped into reverse. Inflation is higher than the EU average for the first time in five years. Unemployment is threatening to bust the 10 per cent barrier again by the end of the year.

The public spending deficit has already broken through the eurozone limit (3 per cent of GDP) and threatens to defy all attempts – by Paris, Brussels and Frankfurt – to conjure, or shout it, down again. Exports, industrial investment and consumer spending – the three, successive motors of the French boom of 1997 to 2002 – have all slowed simultaneously.

The French economy may already be in recession. Earlier this week, the French government's statistics unit revised downward the growth estimate for the last quarter of last year to minus 0.2 per cent, or minus 0.4 per cent on an annual basis. If you look at the graph for the performance of the French economy in the last four quarters, the downward trend is as steep as the upper slopes of the Eiffel Tower. From 2.8 per cent growth (on an annual basis) in the first quarter of 2002, the French economy slumped to 2 per cent in the second quarter, 1.2 per cent in the third quarter and minus 0.4 per cent in the final quarter. The first estimate for the first quarter of 2003 is expected by the middle of this month. On the above plunging trend, it seems inevitable that the economy will have shrunk again. Two successive quarterly losses are the statistical definition of a recession.

Right-wing commentators and TV hosts in the United States have been urging Americans to boycott French goods and "tip France into recession" because President Jacques Chirac opposed the Iraq war. It seems already to have happened, although nothing to do with American boycotts (minimal in their impact so far). France's problems can partly be attributed to the global slowdown (worsened by the Iraqi crisis), partly to problems within the eurozone, but the severity of the decline is puzzling.

Politically, the economic freeze and the rise in unemployment have come at a dangerous time. A series of strikes and demonstrations are planned in the next month to protest against reforms of the tottering pensions system and the shrinking of the central state apparatus planned by the centre-right Prime Minister, Jean-Pierre Raffarin. These reforms – essential to France's long-term growth prospects, according to the government, the OECD and most economic commentators – would have been painful and difficult in a contented, economic climate. They could become explosive (although all the more necessary) in a time of stagnation.

Why is France suddenly doing so badly, after being the boom country in euro land, and generating more jobs than any other developed country, in the late 1990s? Apart from the global slowdown, which penalises a heavily export-led economy, France is suffering from problems within the eurozone, which make uncomfortable reading for supporters of British membership of the European single currency.

The continuing depression in Germany (France's biggest trade partner) hits hard on the western side of the Rhine. The steep rise in the value of the euro has penalised French exports (although helping to keep inflation from rising further). The relatively high interest rates maintained by the European Central Bank are necessary for other euro land countries but damage France and Germany. France has lower growth than the United States, inflation roughly the same (2.6 per cent) but interest rates more than 1 per cent higher.

This has not yet become an acute political argument in France. The political consensus that the euro is a good thing for France remains intact – for the time being.

In any case, France's abrupt economic problems have partly to be explained by internal problems and the internal (and eternal) mysteries of the French economy. France appears to defy the traditional, economic logic of our times.

In the period from 1992 to 1997, under a centre-left government committed to steady management but also interventionist policies such as the 35-hour week, France grew at more than 3 per cent a year and created more than two million jobs. In the previous period, under a centre-right government committed to state-shrinking reform, the economy suffered. Since the centre-right returned to power exactly a year ago, committed to cutting income tax and the state, the economy has suffered again.

The Right says this is partly bad luck and partly the fault of the Left. According to the Right, the left-wing government of Lionel Jospin behaved like grasshoppers breaking into the ant's store-house. While in power, they wasted the painful efforts of the early 1990s and the world boom and imposed no useful, structural reforms on the French economy. France has therefore proved vulnerable to the change in the global climate.

Rubbish, says the former Socialist finance minister, Dominique Strauss-Kahn. It is the Raffarin government which has wasted the climate of consumer and industrial confidence which it inherited last year. By cutting income tax, mostly benefitting the richest, and partially dismantling measures to create jobs and boost the income of the less well-off, the Raffarin government has provoked a boom in saving but a slump in consumer spending. The reduced spending has discouraged business investment and cost jobs, further reducing consumer confidence. The result, says M. Strauss-Kahn is that a relatively benign economic cycle has been replaced – partly he admits for reasons beyond French control – with a vicious one.

There may be some truth in this as a short-term argument but the problems, and mysteries, of the French economy run deeper.

France has the advantages and the draw-backs of never having gone through the Thatcherist revolution in Britain in the the 1980s. It still has good public services which help to produce a relatively productive and competitive economy, in some sectors. But it also has a hugely overmanned state, generous early retirement rules and high unemployment which mean that the burden of producing wealth falls on a relatively small section of the population.

How to release more of France's creativity and productivity without destroying the services and acquired benefits which the French cherish – including many middle-class benefits – remains an unsolved conundrum.

Any hopes that M. Raffarin had of being a truly crusading and reforming Prime Minister (open to doubt, in any case) have slumped with the economy.
© Independent




Britain must avoid Germany's mistake
FT - 22 Apr 2003
By Martin Feldstein

As Gordon Brown, the chancellor of the exchequer, considers whether adopting the euro would be in Britain's interest, he should look carefully at the experience of Germany. Membership in the monetary union has weakened the German economy and is preventing it from escaping its current slump. Although Germany also suffers from a variety of structural problems, it is the euro that raised its unemployment rate over the past year to 10.6 per cent.

The German example shows that Britain's decision about adopting the euro is not a question of whether the time to do so is now right. Adopting the euro is a permanent commitment with permanent consequences. My judgment is that it would not be in Britain's long-term economic interest to accept the constraints of the single currency.

Here are the facts. Germany's gross domestic product rose only 0.5 per cent last year, the lowest of all the leading European countries, and ended the year in decline. Germany also has the lowest inflation rate, just 1.2 per cent. Because the single currency means that all eurozone countries have the same nominal interest rate, Germany's real interest rate is the highest in the eurozone. This is a very dangerous situation in which the high real interest rate weakens the economy and causes inflation to fall further. As the inflation rate falls, the real interest rate rises, creating the potential for a dangerous downward economic spiral.

If the German economy were not constrained by the single currency, natural market forces would cause interest rates to decline, thereby boosting all kinds of interest-sensitive spending. Weak demand in Germany would also cause the D-mark to decline relative to its trading partners, boosting exports and helping producers to compete with imports from the rest of the world. Instead, German manufacturing has been weakened by the sharp rise of the euro over the past year.

In addition to these automatic market responses, an independent Bundesbank would probably have responded to the weak economy and declining inflation by temporarily lowering short-term interest rates. This is now impossible. The European Central Bank must make monetary policy for Europe as a whole, an area in which inflation is now above the 2 per cent target ceiling.

The Stability and Growth Pact also prevents Germany from using a temporary fiscal stimulus to increase growth and bring down unemployment. Although persistent deficits are harmful in the long term, a temporary rise in the fiscal deficit could in principle provide the stimulus needed to rekindle growth. But the eurozone countries have had to constrain themselves from running deficits because of the potential danger to the common currency.

As an American who has long been sceptical about the economic effects of the euro, I am often asked why a single currency should be good for a large continental economy such as the US and yet not for Europe. The answer is that the US economy has three basic features that make it possible to have a single currency without the harmful effects that now arise in Europe. First, American employees move within the country when demand is relatively weak in a particular region, facilitated by a common language and a culture that regards moving across the country as perfectly normal. Germans are not leaving Germany in large numbers for areas of Europe with faster growth or lower unemployment. Second, wages are much more flexible in the US than in Europe, reducing the decline in regional employment that occurs when demand falls. And third, the US has a federal fiscal system that directly offsets about 40 per cent of the relative decline in any state's gross domestic product by a lower outflow of taxes to Washington and a higher inflow of transfer payments. European fiscal systems are still largely national.

Germany did not decide to embark on the single currency after a careful evaluation of its economic costs and benefits. Helmut Kohl led Germany into the single currency in order to create a stronger political union in continental Europe, a political union that would have common economic, social, defence and foreign policies. The euro would be a symbol of that solidarity and a mechanism for centralising economic power.

Many Germans expected that Germany, with the largest population and the biggest economy in Europe, would be the natural leader of the unified Europe. The French assumed that monetary union would at least end the frustrating subservience of the Banque de France to the Bundesbank. More generally, many Frenchmen saw the stronger political union as a vehicle that would allow Europe to compete with the US on political and foreign policy issues as well as in economics.

Adopting the euro would be a long-term economic mistake for Britain, increasing cyclical unemployment and potentially endangering price stability by entrusting it to a European Central Bank that will soon have more than 20 voting members. It is hard to believe that there are political advantages of greater solidarity with continental Europe that can outweigh these long-term negative effects on the British economy.

The writer is professor of economics at Harvard University and president of the National Bureau of Economic Research
© FT




Brussels warns of German 'entrenched stagnation'
Telegraph - 9 Apr 2003
Brussels warns of German 'entrenched stagnation'

By Ambrose Evans-Pritchard in Brussels

THE EUROPEAN Commission slashed its 2003 growth forecast for the eurozone yesterday, warning that Germany faced another year of "entrenched stagnation" and would not bloom again until it carried out root-and-branch reform.

Britain was singled out as the only major economy in the European Union that was holding steady in the current global slowdown, with estimated growth of 2.2pc this year. The Commission said the eurozone would be lucky to eke out a 1pc expansion, following a "meagre" 0.9pc in 2002, and could face a harsh recession if the crisis in the Middle East drags on.

"For a third consecutive year growth is likely to disappoint," it said, blaming "persistent structural rigidities that reduce our capacity to react to shocks".

Alluding to the onset of the Great Depression, the spring economic forecast said: "With equity prices falling about 60pc from the peak levels in spring 2000, the speed and size of the stock market correction are comparable to the 1929 Crash."

The report said that while rising house prices had cushioned the blow in Britain, Spain, and Holland, things were different in Germany where property prices had been stable for most of the past decade. Faced with declining wealth, German consumers had retrenched sharply. German growth is expected to be 0.4pc in 2003, with France at 1.1pc and Italy at 1.1pc, pushing eurozone unemployment up by a further 1.4m by the end of 2004.

Clearly unimpressed by Chancellor Gerhard Schroder's attempts to blame Germany's troubles on the war in Iraq, the Commission issued a blistering attack on Berlin's economic policies.

It said: "Stagnation has gradually become more and more entrenched," and said the economy suffered from "severe unemployment and inactivity traps".

Labour-market rigidities and red tape saddle the country with an economic speed limit of 1.5pc growth (compared with 2.25pc for the rest of the EU and 2.5pc for Britain), a problem "exacerbated" by the latest tax increases.

Yesterday's twin reports - which include the surveillance assessments known as the Broad Economic Guidelines - are a vindication for Chancellor Gordon Brown as he prepares to deliver the Budget today.

They support claims by Treasury officials that recent slippage in Britain's public finances is largely due to forces outside the Government's control, as well as greatly reducing the chances of an early referendum on the euro.

In a glowing report, the Commission said: "The UK has enjoyed almost a decade of sustained output growth. Inflation is among the lowest in the EU and unemployment is at a 27-year low."

But Brussels said there were "appreciable downside risks" as the housing market cooled and consumers reined in. Britain still lagged the EU in productivity levels and needed to do more to curb the "high numbers" of working-age adults claiming sickness and disability benefits.

Brussels wearily accepted that France and Germany - soon to be joined by Italy - would remain in breach of the Stability Pact, which limits budget deficits to 3pc of GDP. Worse, their national debts in 2003 will both rise above the 60pc "safety" limit fixed by the Maastricht Treaty.

The Commission skirted around the problem that with the euro Berlin cannot revive demand by cutting interest rates or resorting to a fiscal boost. But the report said Germany's low inflation was allowing it to claw back competitiveness relative to its neighbours, providing a slow way out of the impasse.
© Telegraph




French shrug off breaching Euro stability pact limit
Telegraph - 4 Mar 2003
By Philip Delves Broughton in Paris

France thumbed its nose at the European stability pact yesterday by announcing it had broken the deficit limit in 2002 and would do so again in 2003.

Francis Mer, French finance minister, said France's position was not serious enough to merit anything more than a warning. The commission said yesterday there was no "rounding down rule in the stability pact" and if the limit was breached action would be taken. The EU can demand that France raise taxes and cut spending to meet the pact's limits.

For the purposes of its budget report to the European Commission, the French treasury rounded down its 2002 deficit to 3pc - right on the limit - hoping to avoid penalties. But the actual figure is 3.038pc.

Jean-Pierre Raffarin, Prime Minister, said yesterday he had decided he "does not want to let deficits grow nor to force austerity on the French". His budget has promised few cuts in France's large public sector while trimming taxes.

M Raffarin is acting on the orders of President Chirac, who wants to see income tax cut by a third during his five-year presidential term and increased spending on police and defence. M Chirac refuses to risk domestic unpopularity for Europe's sake. The last time he tried drastic reforms of the French economy in 1997, he ended up losing control of parliament.

M Chirac's diplomatic battle with America has distracted attention for now from France's deepening economic problems. Unemployment rose to 2.47m in February, following the sharpest rise in 14 months. Consumer confidence is at its lowest in five years and growth has virtually stalled.

Business confidence has also been dented by heavy debts and losses at major French companies, notably France Telecom, which has debts of £47 billion.

France last exceeded the stability pact deficit limit in 1998, the year it qualified for the single currency. But then its deficits were falling towards the limit rather than rising above it. For 2003, the French treasury has predicted growth of 2.5pc, at odds with most economists who are forecasting just 1.5pc. The deficit is expected to expand to 3.5pc.

The news will intensify anger in Brussels towards France. Many countries are still livid with M Chirac for threatening the entry into the EU of those Eastern European countries which support America's position on Iraq.

They are also uneasy at France's efforts to re-energise the faltering Franco-German alliance in order to bully through its plans for the future EU constitution.
© Telegraph

[marquis] 01/7/2003 07:43

Get ready to be stuffed by euro
Sun - 27 Jun 2003
Trevor Kavanagh

A GOVERNMENT minister last night warned that Britain will sign up to the euro - whether voters like it or not.

Europe minister Denis McShane adapted age-old advice to reluctant brides on their wedding night, saying: "Don't fight Europe. Lie back and enjoy it."

Mr McShane predicted Britain will dump the Pound. "We will be in the euro currency," he said to cheers from a pro-EU audience in London.

And he stoked the row by blurting out Tony Blair's plan to turn the next election into a euro referendum.

Asked if next year's European parliament elections would become a vote on the Constitution, he said: "We'll have a big referendum soon - it is called a general election."

Mr McShane's blunder came after Commons leader Peter Hain was forced to swallow claims that the European parliamentary elections would become a referendum.

But Mr McShane admitted it would take a miracle to sway opinion in favour of the euro.

"We are always looking for simple slogans to make the council estates hum with pro-Europeaness," he said.

"But I am not Harry Potter and I can't cast a spell to make people start waving European flags."

The speech was intended to be off the record. But one member of the audience said McShane used the opportunity to pour scorn on claims that the American economy is out-performing Europe's.

And the minister claimed Britain was playing a bigger military peace-keeping role than America.

But Labour MPs last night slammed Mr McShane's euro views as "stupid".

John Cryer said: "If he is saying the euro should be an election issue he should think again. This is plain stupid."

Norwich MP Dr Ian Gibson said: "This shouldn't be an election isue - we should have a referendum instead."


© Sun

[mr.elbee] 03/6/2003 23:10

......You say....."We can round up our discontented electorate into a solid unity which will pull the rugs from under the established political parties at the next general election" .....I think not.The decision always has been and always will be a fait accompli based on the wish of the English elite to rule the world again thru the NEW EUROPEAN EMPIRE>>>.The decision will always be political.We are doomed.

[marquis] 03/6/2003 10:19

Euro - No
Sunday Mirror - 1 Jun 2003
60% OF VOTERS SAY NO TO EURO WHATEVER 31% WANT TO QUIT EUROPE

Chris McLaughlin

TONY Blair has a mountain to climb to persuade the British public to join the euro.

A Sunday Mirror poll has revealed that 60 per cent of voters would reject the euro in a referendum - even if the PM and his sceptic Chancellor Gordon Brown say the economy is right.

In fact almost one in three voters want to pull out of the European Union altogether.

The poll results represent the biggest register of Euro scepticism since the beef war with France. They show Mr Blair faces a huge battle to win the hearts and minds of voters to support the historic step of swapping the pound for the euro.

The only crumb of comfort is strong support for the European ideals among younger voters.

In the 18-24 age group, 83 per cent are in favour of Britain staying in the EU, with only a tiny six per cent against.

The poll, conducted by ICM Research, comes just a week ahead of Mr Brown's announcement on whether the British economy has passed the economic hurdles set by the Treasury for joining the single currency.

He is expected to say that the time is not yet right, but, in a deal with Mr Blair, he will leave the door open for signing up at a later date.

Meanwhile, 71 per cent of the British public say the Government should call a referendum within the next two years rather than wait till after the General Election.

Sixty per cent would vote to keep the pound with just 33 per cent opting for the euro.

The results confirm Mr Blair's worst fears that a referendum held now would result in an overwhelming "No" vote and risk his premiership at the next election.

They will fuel growing demands at Westminster for Mr Blair to allow a full-bloodied debate by announcing that he will hold a referendum before the next election.

Many MPs believe that support for the euro can only be won through an intensive and open argument. The worries of voters will be exploited by Tory leader Iain Duncan Smith, who has accused Mr Blair of dithering over a referendum.

Mr Blair last week hit back by accusing critics of the proposed new European Union constitution of wanting to pull Britain out of the EU altogether. His attack was aimed to alarm voters about the prospect of British withdrawal, but our poll reveals that three out of 10 voters would support Britain pulling out anyway.

The danger is that the numbers could increase if the Government attempted to go ahead with the euro.

The poll shows that business leaders are trusted by TWICE as many people on the euro than Mr Blair. Asked who they trusted must to tell the truth about the euro, only 12 per cent said the PM, compared to 23 per cent who opted for business leaders.

Younger voters are much keener on the EU and joining the euro than older people. As well as the 83 per cent of 18-24-year-olds who favour Britain staying in the EU, 76 per cent of 25-34-year-olds say the same.

But only 44 per cent of people over 65 want Britain to stay in, while 43 per cent would like to pull out of Brussels.

The gap among younger voters on the euro is much narrower, with 48 per cent of 18-24-year-olds in favour and 38 per cent against. Among over-65s, 69 per cent oppose the euro and just 25 per cent support it.

Leading industrialist Lord Haskins said the poll underlined the need for a wider public debate over the euro.

Lord Haskins, a member of the Britain in Europe campaign, said: "This raises serious questions about where we are going on one of the most important economic decisions facing this country.

"Public scepticism is bound to be high when the Government is drifting along without declaring where it stands.

"Mr Blair and Mr Brown must make clear their position so that we can have the debate the country so desperately needs."
© Sunday Mirror

[kingfish] 15/5/2003 09:45

1,000 years of fighting off invaders

The biggest betrayal in our history









.

[marquis] 15/5/2003 09:16

Marquis: Title should read 'UK, if it has any sense, should never join the Euro.'

BBC NEWS
UK 'not ready' for euro

Gordon Brown and Tony Blair have agreed the UK is not yet ready to join the euro - but remain split on whether to rule out a euro vote before the next election.

The prime minister has accepted the chancellor's view that the UK has not passed his five economic tests for joining the currency, BBC political editor Andrew Marr has learned

They are now arguing about whether they can "leave the door at least slightly ajar" to some kind of referendum later in the Parliament.

Tory shadow chancellor Michael Howard greeted the news with "astonishment", accusing the prime minister and chancellor of bringing the government "into disrepute".

The prime minister has accepted that economics must be paramount and the economics remain negative

BBC Political Editor Andrew Marr


End of the euro dream?
Downing Street and a succession of ministers were quick to play down news a decision on the euro had been taken.

"The government has nothing to say on this topic until the economic assessment is published," a Number 10 spokesman said.

'Real tragedy'

Wales Secretary Peter Hain said the decision process was in "the end game" but that no final decision had been made.

The Tories leapt on the BBC report with Mr Howard warning that the chancellor and prime minister were "becoming a laughing stock".

"To deny that agreement has been reached is absolutely astonishing frankly ..." he said.

"The real tragedy is that in all this, the national economic interest is being lost sight of.

"Decisions are being taken, not on the basis of what is best for Britain, but on the basis of who is coming out top in this ferocious faction fighting that is tearing this government apart," Mr Howard told BBC Radio 4's Today programme.

Lib Dem spokesman Matthew Taylor said: "It is clear that the Treasury has briefed against the prime minister in an effort to bounce him into a decision that has not yet been finalised."

Assessment accepted

The chancellor was widely believed to be reluctant to recommend euro entry, but it is the fact that the prime minister appears to have accepted his chancellor's assessment that is most significant.

Andrew Marr told Today: "Tony Blair has accepted with some reluctance what he regards as the inevitable position now, which is the chancellor thinks that the economics are not right and therefore they cannot go ahead with the referendum.

"They are still discussing, they are still arguing, about quite a lot of the detail, including above all, whether they can leave the door at least slightly ajar to some kind of referendum later in Parliament."

The UK's euro verdict



Details of the five tests
History of the euro
Euro debate: A potted guide
Mr Marr said joining the single currency remained the "single biggest decision of Tony Blair's premiership".

Mr Blair has always been an enthusiastic advocate of Britain's eventual membership, with Mr Brown said to favour ruling out a further assessment before the next election.

One of the economic differences between the UK and the eurozone that is thought to have played a part is a substantial difference in housing markets.

If a recommendation had been made to join then the next step would have been a referendum on the issue of ditching the pound and joining much of the rest of the EU by taking up the euro.

The issue has dominated British domestic politics for years with both the main political parties split on whether or not to join.

Challenge

In contrast to Mr Blair's enthusiasm, plus the even more pro-euro stance of the Liberal Democrats, is the Conservatives' steadfast opposition to joining.

The government is due to give its verdict on the five tests for entry by 7 June.

The UK's five tests

Convergence with eurozone
Enough flexibility to adapt
Impact on jobs
Impact on financial services
Impact on foreign investment
The euro is used in 12 of the 15 European Union countries after becoming legal tender in January 2002.

The UK, Sweden and Denmark are the only EU countries still outside the euro.

The key economic test being examined by the Treasury was whether the UK economy has converged sufficiently with the eurozone and whether that convergence was sustainable.

The second test looked at whether there is sufficient flexibility in the UK economy to cope with economic change.

The remaining three tests assessed the impact of joining the euro on jobs, on foreign investment and on the financial services industry.

[bare rabbit] 05/5/2003 20:42

LOL!

Rabbit
Done

[bare rabbit] 05/5/2003 09:52

Avoint, I very much doubt it old son.

You could try begging me, but not on here, do it on a ron thread.

You really don't need the bad exposure on here Clive.

I'm not too bothered which ron thread you choose, all heart aint I !

I'm not promising anything avoint, but it is worth a try.

Remember when you posted some of my details on here Clive?

I'll bet you're regretting it now eh!

I also think calling my son 'gay' was just a tad out of order, don't you Clive?

See you on a ron thread soon then avoint.

Rabbit

[avoint] 05/5/2003 09:43

Can we now drop the personal bits then.

[bare rabbit] 05/5/2003 09:37

Why not just write credit card then avoint?

I dunno, the laziness of some people eh!

Rabbit

[avoint] 05/5/2003 09:35

Why still continue to use personal details Rabbit ? Why not drop it now ! What do you think a C Card is a bloody Christmas Card !

[bare rabbit] 05/5/2003 09:31

Euros you doughnut, christ avoint, try and keep up will you.
I'd of thought the thread header may have given you a bit of a clue Clive!

Good grief avoint, get with the programme will you.

Rabbit
What's a 'c' card?

[avoint] 05/5/2003 09:28

£ = 1.35 what ?
Thats a RIP off - was that on a C card?