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The Euro: British Government Policy and the Role of the City of London

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THE EURO: BRITISH GOVERNMENT POLICY AND THE ROLE OF THE CITY OF LONDON The Government's policy on membership of the euro is unchanged. It remains as set out by the Chancellor of the Exchequer in October 1997, and restated by the Prime Minister in February 1999. In principle, the Government is in favour of UK membership of Economic and Monetary Union (EMU); in practice, the economic conditions must be right. The determining factor underpinning any Government decision on membership of the euro is the national economic interest and whether the economic case for joining is clear and unambiguous. If it is, there is no constitutional bar to joining. As the Chancellor of the Exchequer said in his October 1997 statement, the Five Economic Tests will define whether a clear and unambiguous case can be made. ...read more.


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. The Government launched a draft National Changeover Plan in February 1999. The Plan summarises the work done so far with the public and private sector and the work planned for the future. The Plan shows that the Government is putting its policy of prepare and decide into practice. The City of London Although Britain is outside the euro zone the City of London, with its expertise in euro markets, remains the top centre for euro denominated international trading. Since the launch of the euro in 1999, London has established a pre-eminent position in euro-denominated transactions in its international financial markets. ...read more.


London also has far more foreign banks (539) than any in other major international centres and the UK has the leading share of cross-border lending (nearly 20% of the world total in March 2001). And there are more foreign companies listed in London than in any other centre, 501 at the end of 2000. Needless to say, London is also by far the largest financial centre in Europe, with none of the other centres even coming close. To promote and underline the City's place as an important global centre for financial services, the Lord Mayor of the City of London, Sir David Howard, visited Kuala Lumpur in October 2001. The Bank of England's Director for Europe, John Townend, came in January to explain the UK's position on the euro and the City of London's role to financiers. ...read more.

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