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Monday, September 6, 1999 Published at 12:18 GMT 13:18 UK

Business: The Economy

Cook warms to the euro

Robin Cook has become a fan of both Europe and the euro

The UK Foreign Secretary, Robin Cook - once a sceptic of European monetary union - has praised the euro in a speech in Japan.

He told an audience of businessmen in Tokyo that the UK government would make sure investors reaped the benefits of a successful transition from the pound.

The speech is being seen as an attempt to persuade Japanese companies that they should keep investing in the UK.

The BBC's John Sergeant: "The tone of the speech was notably optimistic"
Last week, the managing director of Nissan UK said his Japanese bosses might not invest in Britain any more if the country did not adopt the single currency, and there has been concern that other companies could be wavering.

Mr Cook's speech is one of the strongest pro-euro statements by a government minister yet, and stands in stark contrast to the Labour Party's recent cautious statements over the single currency.

The government suffered a surprise defeat in the European elections in June, during which the Conservative Party had made much of its opposition to Britain abandoning sterling.

Robin Cook reiterates criteria for Britain to join euro
But Mr Cook said after his speech that he was not signalling a shift in policy: "Everything I have said is clearly within our policy that we must take care to be ready to make the choice when the time comes. It would be foolish to lose the option."

Will not let Britain lose out

In the speech, Mr Cook said that, on present trends, all countries in the euro will enjoy "significant benefits" from monetary union, and international investors had already shown their confidence in the single currency.

"I assure you that if the euro proves a stable, successful currency, (Prime Minister) Tony Blair's government will make sure that Britain is ready to take part subject to the support of the British people in a referendum," he said.

Mr Cook stressed that "If the euro brings benefits to its members, we will not let Britain lose out by staying out".

He suggested that there was evidence that the birth of the euro had provided a "major stimulus to economic restructuring within the euro-zone".

'Too early to judge'

Michael Hughes of Barings Asset Management: Euro likely to increase competitiveness
Conservative politicians moved quickly to condemn the speech.

The Shadow Chancellor, Francis Maude, said Mr Cook's remarks would make it clear that Labour had "privately made up their minds to scrap the pound and join the single currency at the earliest opportunity".

A business lobby group opposed to the euro weighed in as well. Nick Herbert, Chief Executive of Business for Sterling, said it was "fatuous" for Mr Cook to claim the euro was working.

Nick Herbert, Business For Sterling: Conflicting messages coming from government
He said it was "far too early to judge the success of the euro" and wrong "to claim that an eight-month-old virtual currency has anything to do with a slight upturn in the euro-zone's economies after six years of stagnation".

The UK government has promised to hold a referendum and let voters decide whether to replace the pound with the euro.

During his three-day visit, Mr Cook is to meet Japan's Prime Minister, Keizo Obuchi, as well as Foreign Minister Masahiko Komura.

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