Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point
On Air
Feedback
Low Graphics
Help

Thursday, June 4, 1998 Published at 13:08 GMT 14:08 UK


Business: The Economy

Brown barred from Euro club

The British government contested the setting up of the "euro" council

The European Union has taken another step toward making its single currency a reality when finance ministers from 11 nations met to launch a new body to co-ordinate economic policy in the euro area.

The first so-called "Euro-11" council started deliberations in a chateau in the suburbs of Luxembourg and will focus on measures to keep budget deficits small and government debts falling in the countries that have signed up for the euro from the start of next year.


[ image: Frankfurt, home of the European Central Bank]
Frankfurt, home of the European Central Bank
The Chancellor of the Exchequer, Gordon Brown, opened the meeting, because Britain currently holds the EU's rotating presidency.

But because Britain will not join the single currency he had to leave after saying a few words of welcome and hand over the chair to the Austrian Finance Minister, Rudolf Edlinger.

Austria takes over the presidency from Britain on July 1.

Britain's exclusion from the talks has left the Chancellor open to criticism from Conservatives.

"This is a humiliating position," said Graham Mather, Conservative spokesman on European economics.

"The Labour government has proved incapable of negotiating effectively in the EU arena."

Mr Mather said it was "unprecedented for a member state to be so thoroughly sidelined in the EU while that nation holds the presidency. It will be a serious embarrassment for Britain's EU presidency."

He said Mr Brown would have to leave 11 EU colleagues discussing key economic issues.

The members of the Euro-11 group counter that argument with the question why Britain, Sweden and Denmark should have a say over the euro even though they have refused to join the single currency.

Euro-wrangle

EU leaders agreed in December to set up the council to tighten consultations between the 11 nations that will adopt the euro as their shared currency on January 1.

The decision was reached after months of wrangling among EU nations.

Britain, Sweden, Denmark and Greece tried to block the setting up of the council, fearing it would exclude them from key economic decisions.

Germany was concerned the council - first suggested by France - could be used to undermine the independence of the European Central Bank which is to run monetary policy after the switch to the euro.

Although the compromise which eventually set up the Euro-11 does not give it formal decision-making powers, France is expected to push for it to develop into an important forum for co-ordinating policies on taxation, budgets and other economic issues.


[ image: Gordon Brown wished the gathering well]
Gordon Brown wished the gathering well
France wants the council to become a political counterweight to the powerful board of the European Central Bank, based in Frankfurt, Germany.

Although left out of the main workings of the Euro-11, ministers from the other EU nations will be invited to attend some sessions.

Gordon Brown is due to chair a full session of the 15 EU finance ministers in Luxembourg on Friday which has been scheduled to prepare economic issues on the agenda of the June 15-16 EU summit in Cardiff, Wales.

Topics include plans to boost growth and job-creation after the launch of the euro, and the contentious issue of how much each nation should contribute to the EU's common budget as the Union plans to take on new members in eastern Europe.





Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©


The Economy Contents

Relevant Stories

17 May 98 | Single currency
Why eleven countries are deemed fit to join Emu

30 Apr 98 | Single currency
What is the European Central Bank?





Internet Links

European Union euro site


The BBC is not responsible for the content of external internet sites.




In this section

Inquiry into energy provider loyalty

Brown considers IMF job

Chinese imports boost US trade gap

No longer Liffe as we know it

The growing threat of internet fraud

House passes US budget

Online share dealing triples

Rate fears as sales soar

Brown's bulging war-chest

Oil reaches nine-year high

UK unemployment falls again

Trade talks deadlocked

US inflation still subdued

Insolvent firms to get breathing space

Bank considered bigger rate rise

UK pay rising 'too fast'

Utilities face tough regulation

CBI's new chief named

US stocks hit highs after rate rise

US Fed raises rates

UK inflation creeps up

Row over the national shopping basket

Military airspace to be cut

TUC warns against following US

World growth accelerates

Union merger put in doubt

Japan's tentative economic recovery

EU fraud costs millions

CBI choice 'could wreck industrial relations'

WTO hails China deal

US business eyes Chinese market

Red tape task force

Websites and widgets

Guru predicts web surge

Malaysia's economy: The Sinatra Principle

Shell secures Iranian oil deal

Irish boom draws the Welsh

China deal to boost economy

US dream scenario continues

Japan's billion dollar spending spree