Monetary Union Plan Tempts Brits
A METHOD has been proposed for speeding the European Community along the road to a single currency, and Britain - up to now the leading opponent of monetary union - appears to be moving towards a compromise on the question. Following a May 11 meeting of EC finance ministers in Luxembourg, a senior British source said the formula outlined by Jacques Delors, president of the European Commission, offered a way of balancing progress towards a single European currency against Britain's reluctance to sign a treaty on monetary union later this year.
``Subject to some fine tuning, it could be the breakthrough we have been searching for,'' the source said.
Economic and monetary union (EMU) is already the official goal of the EC. It is envisaged that it will occur in three stages.
Stage one was agreed on last year. Stage two is planned to come into effect in December with agreement among the 12 member nations on moves towards a single currency. Stage three would create the single currency, along with a European central bank.
Under the Delors plan, Britain could join its EC partners in a treaty for EMU in December.
But, by activating an opt-out clause, Britain could delay until the late 1990s the moment when it finally decided to merge the pound sterling with a single Euro-currency known as the Ecu (European Currency Unit).
Margaret Thatcher, the former British prime minister, vigorously opposed a single European currency. Her successor, John Major, says he could never agree to a Euro-currency being imposed on Britain.
But the Delors opt-out plan would enable him both to stay politically in tune with the other EC states and avoid agreeing to a single currency before he calls a general election, which must occur by mid-1992.
In effect, the British decision on whether to accept a single currency would be taken by the next parliament. By that time the other EC nations would be well ahead with EMU. Pressure would be on the government in London to cooperate fully.
Norman Lamont, Britain's chancellor of the exchequer, described the Delors move as ``constructive,'' though saying it would need detailed consideration.
Perhaps more significantly, it received a welcome from Conservative members of Parliament who are split on the merits of merging the pound sterling into a single currency. Teddy Taylor, leader of a group of more than 70 Conservative backbenchers hostile to a single currency based on the Ecu, welcomed the Delors initiative. ``This will enable Britain to stay in the EC, but there will be no need for us to be rushed into making a decision on abandoning the pound,'' he said.
Bill Newton-Dunn, a leading Conservative member of the European Parliament and advocate of a single currency, called it ``a first-class idea. You can't force people to accept a currency if they don't want it. This keeps the options open for Britain.''
There is certain to be intense debate in coming weeks on the application of the new Delors initiative. ``This could be a fudge,'' said Terence Higgins, chairman of the House of Commons select committee on treasury affairs. Delors ``may think that if he can quiet down our opposition to a single currency, he will get it through the other EC members.''
Among top Conservative party organizers, however, the proposal appears to be seen as a way of postponing a decision on a contentious political issue.
Major is said by some Conservative MPs to be receiving advice from Chris Patten, the party chairman, to consider holding a general election in the autumn, when government ministers say inflation will have fallen. The party is battling to regain voter support, which ebbed away at local elections earlier this month.