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Last Updated: Tuesday, 20 May, 2003, 08:55 GMT 09:55 UK
Most NI firms 'back euro'
Gordon Brown
Gordon Brown "will make an announcement before the summer"
More than 60% of Northern Ireland businesses would vote to join the euro if a referendum were held now, according to a survey.

It was conducted by PricewaterhouseCoopers (PwC) as part of its annual survey of business attitudes.

PwC asked a representative sample of local firms how they would vote if a referendum on the euro were held now.

It suggested 63% of all respondents would vote in favour, 24% against, with 13% undecided.

Chancellor Gordon Brown has said he will make an announcement before the summer confirming whether or not the UK economy would benefit from membership.

However, there is speculation that the UK Government will now postpone a referendum on joining the euro until after the next general election.

The UK's euro verdict

PwC chief economist Philip McDonagh said the particular circumstances of Northern Ireland accounted for the high percentage favouring membership of the euro.

"Slow economic recovery and low-cost competition is hurting local exporters," he said.

"Despite the strength of the euro, exporters to Ireland and other parts of the eurozone perceive currency volatility as yet another barrier to trade.

"In border areas and amongst retailers, where dual currency has become a way of life, the euro is already accepted," he added.

'Favoured membership'

The poll indicated that as EU customers, including those in the Republic of Ireland, aligned their supply chains to the euro, Northern Ireland suppliers and exporters were feeling isolated.

PwC said the construction industry was most supportive of early entry into the eurozone, with 67% in favour.

The survey also suggested the manufacturing and service sectors were also very supportive, with larger firms most enthusiastic.

The UK's five tests
Convergence with eurozone
Enough flexibility to adapt
Impact on jobs
Impact on financial services
Impact on foreign investment

Almost 70% of firms employing more than 100 people favoured membership, the poll indicated.

However, it suggested 50% of Irish-owned companies in Northern Ireland were against membership.

The survey authors said this was because these firms were seeking "the best of all possible worlds" with sterling, and not because they were "anti-euro".

More than 70% of foreign-owned firms - excluding Republic of Ireland companies - would vote to join the euro , the survey suggested.

However, Bill Jeffrey, chairman of the 'no campaign' in Northern Ireland, said: "Our trade has remained stable, and we have weathered the global economic downturn relatively successfully.

"It is clear that the chancellor will rule that the economics are not right for us to join the euro - it's hardly surprising, the eurozone has suffered from rising unemployment and from low growth."

Economic change

The euro is used in 12 of the 15 European Union countries after becoming legal tender in January 2002.

The UK, Sweden and Denmark are the only EU countries still outside the euro.

The key economic test being examined by the Treasury was whether the UK economy has converged sufficiently with the eurozone and whether that convergence was sustainable.

The second test looked at whether there is sufficient flexibility in the UK economy to cope with economic change.

The remaining three tests assessed the impact of joining the euro on jobs, on foreign investment and on the financial services industry.




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