23 February 1998
Farmers Weekly EMU conference
By Boyd Champness
A WEAK or unsuccessful launch of the single currency would be a nightmare scenario for British agriculture, National Farmers Union president Ben Gill said today.
Speaking at the Farmers Weekly Economic and Monetary Union conference in London this morning, Mr Gill said: “Whatever the individual views of farmers on the merits or dangers of EMU, it is overwhelmingly in our interest that the project is a success”.
If the Euro fails, or is established as a weak currency, then investors will get out of Euros into safer havens such as the US dollar, the Swiss franc or the UK pound, which would have a devastating effect on UK agriculture.
“Sterling will soar upwards, and I dont need to emphasis the damage which a Pound at a rate equivalent to DM3.20 or higher would do to British agriculture,” he said.
The scenario Mr Gill would like to see is a weakening of the Pound by some 10% by the end of the year – as all the major banks seem to predict – and a successful launch of the Euro as a strong currency in 1999.
But even if the Euro is a success, Mr Gill warns that British agriculture is in danger of missing trade opportunities if its slow to join.
“Because so much of European trade will then be within the Euro zone, the value of the Euro against third currencies like the Dollar or the Pound may be of much less interest to the European monetary authorities,” he said.
Mr Gill said it was too late for UK farmers to be concerned about a weakening of control over their industry if Britain joins EMU.
“Most decisions affecting British agriculture are now taken in Brussels – whether they are setting the rules of the single market, reforming the Common Agriculture Policy or negotiating the World Trade Organisation,” he said.
“We therefore are strongly dependent on having a Government which is influential in Brussels. It seems to me inevitable that a Government which excludes itself permanently or indefinitely from a major project is bound to be seen as semi-detached, uncommitted and marginal in its weight.”
And Mr Gill said those sceptics who believe that Europe was not competent enough to introduce a successful Euro need to have more faith.
“I can easily understand the doubts of those who are opposed to the single currency, although I find it difficult to believe that the Governments of the third, fourth and fifth biggest economies in the world would risk such a gamble unless they had the courage and the determination to carry it through successfully,” he added.