Britain should join the Euro, says Mandy, as he praises 'great success' of single currency
By James Chapman
Last updated at 9:48 PM on 12th June 2009
Lord Mandelson caused uproar yesterday by lavishing praise on the euro and declaring Britain wanted to join.
The Business Secretary, the second-most powerful man in the country following last week's Cabinet reshuffle, hailed the currency as a 'great success'.
He appeared at odds with Gordon Brown after declaring it was an 'important objective' for Britain to sign up.
It is the first time for years that any senior minister has enthused openly about the benefits of euro entry.
His remarks caused consternation, coming just days after 60 per cent of voters backed parties hostile to the EU in European elections.
All powerful: Business Secretary Peter Mandelson addresses a news conference in Berlin yesterday. He described the euro as 'a great success'
Critics also questioned Lord Mandelson's motives, since he is not allowed to criticise the EU if he wants to keep his £31,000-a-year pension as a former European commissioner.
Lord Mandelson, on a trip to Berlin, said: 'Does it remain an important objective for Britain to find itself in the same currency as that single market in which it interacts? Obviously yes.'
He insisted such a decision was for 'the future' and had to be made on the 'right terms in the right circumstances'.
However, he added: 'It is perfectly clear that the euro has been a great success in anchoring its eurozone members during the financial crisis.
'I hope people will recognise this represents a major vindication for the single currency.'
His remarks came as official figures showed a record contraction in industrial production in the 16-state eurozone.
It fell a record 21.6 per cent in April compared with last year and followed March's drop of 19.3 per cent.
The figures contrast with the latest UK production data, which showed a monthly rise in April for the first time in more than a year.
Economists say euro membership has acted as a straitjacket for struggling countries such as Greece and Spain.
And last night the Tories said countries that had joined the euro had lost control over monetary policy.
Shadow Foreign Secretary William Hague said: 'It is deeply disturbing that the man who now makes most of the Government's policies has declared Britain should join the euro.'
Mr Hague has pledged there are 'no circumstances' in which the Conservatives would propose joining the euro.
Nigel Farage, leader of the UK Independence Party, said: 'These remarks are very alarming-I don't know which economists Lord Mandelson is talking to, but they are not on this planet.'
In 1997, Mr Brown set five economic tests that must be met before ministers would hold a referendum on entry.
The key test is whether the UK economy is coming together with the eurozone and whether this can be sustained.
The second is whether there is sufficient flexibility to cope with economic change. The remaining three assess the impact on jobs, foreign investment and financial services.
Current policy is that the Government 'sees benefits in euro membership' but that all five tests must be met.
Posts
