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In 1997, when the Labour party gained control of Parliament, they agreed to sign the Social Chapter of the treaty; however, they did not adopt the Euro.
In order to join the EMU, the government feels the UK should pass the following five tests:
- Convergence: Are business cycles and economic structure compatible so that others and could we live comfortably with euro interest rates on a permanent basis?
- Flexibility: If problems emerge is there sufficient flexibility to deal with them?
- Investment: Would joining EMU create better conditions for firms making long-term decisions to invest in Britain?
- Financial Services: What impact would entry into EMU have on the competitive position of the UK’s financial services industry, particularly the City’s wholesale market?
- Growth, stability, and employment: In summary, will joining EMU promote higher growth, stability and a lasting increase in jobs?
Labour is committed to ensuring all these criteria are met before they decide to join the EMU...
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