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Sunday, 4 June, 2000, 02:48 GMT 03:48 UK
Pressure for UK euro ballot

British manufacturing is suffering from the strong pound
The government is facing renewed pressure to set a date for a referendum on Britain joining the euro.

Former Tory Chancellor, Kenneth Clarke, will tell a gathering of the pro-single currency European Movement on Sunday that staying out of the Euro could cost the country dear.

Kenneth Clarke: The pound will get weaker
He believes Britain will start losing inward investment because of its failure to say it will join the european single currency.

"Decisions for the future will be taken now to avoid the risk of investing in Britain when the exchange rate might move up or down against the euro at any time, affecting the prices of exports and imports and the value of investment," Mr Clarke was due to say.

"At some time the pound will get weaker and the euro stronger. That always happens with a floating exchange rate and it may even be starting to happen now. If the pound gets too weak, we will face the risk of inflation and may need higher interest rates.

"We are a trading nation and the European Union represents over 50% of our exports. We can avoid the risks of a floating exchange rate altogether when we join the euro and fix the rate permanently."

Blair warning

The call comes after former Labour Chancellor Roy Jenkins warned Tony Blair his reputation could be ruined if he fails to act decisively on the European single currency.

At the same conference, Lord Jenkins of Hillhead urged Mr Blair to begin building up for a new referendum on the single currency.

Lord Jenkins, a former President of the European Commission and known to be close to Mr Blair, said: "You cannot convert the British public in a fortnight after previously taking the view that the euro is a subject you must not discuss rather like the Victorian attitude to piano legs."

He called for a cross-party alliance in favour of the euro to be built and he warned: "Too many Prime Ministers have damaged their reputations by equivocation on Europe.

"Mrs Thatcher's long reign ended in chagrin on the issue. Mr Major was rendered almost a nullity by it. I pray that Mr Blair will handle matters more decisively."

'Euro dinosaurs'

However, a spokesman for the pro-pound Business For Sterling group said: "This is the roar of the euro dinosaurs still wedded to a policy invented in the last century and having no understanding of what a modern economy needs in the Internet age.

"For Clarke and Jenkins, European integration is a religion. They are oblivious to the economic difficulties of joining which the government has to accept."

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See also:

28 Apr 00 | Business
Euro hits fresh lows
27 Apr 00 | Business
Europe and the euro
25 Apr 00 | Business
Q and A: Euro currency slump
26 Apr 00 | Business
Confidence blow for manufacturers
24 Apr 00 | Business
Strong pound 'hits business'
04 May 00 | Business
Euro under pressure
03 May 00 | UK Politics
Heseltine: UK must decide over euro
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