23 February 1998
By Boyd Champness
UK agriculture has nothing to gain, but everything to lose, by not joining the first wave of Economic Monetary Union (EMU) participants in 1999, according to a leading consultant.
Robert Gooch, of European consultancy group Eurinco, speaking at the Farmers Weekly EMU conference this morning, said if EMU was not a success, then nervous investors would pour money into strong and appreciating currencies such as Sterling, which would have a devastating effect on UK agriculture.
However, if the Euro was a success, then the rules and regulations would have already been set in concrete by Germany and France, leaving very little scope for the UK to play a key role when it eventually joins.
There are only four countries not expected to join the first round in 1999. These include the UK, Sweden and Denmark – on their own undertaking – and Greece, because its Drachma will not qualify.
Mr Gooch believes the UK will join in 2003 after Labour wins the next election. But he is concerned about the interim period and how the Green Pound revaluation system will work once the Euro is introduced.
He said a currency revaluation system would have to be maintained for the four EU member states not using the Euro. However, he fears payments will be made very much on political grounds and the “ins will not look too favourably towards the outs”.
If this was the case, then British farmers would have to rely on the generosity of the UK Government to allocate funds to the farming industry suffering because of the strength of Sterling – something the Government has already proven reluctant to do.