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1990: Major proposes new Euro currency

British Chancellor John Major is proposing a new European currency which would circulate alongside existing national currencies.

Mr Major's plan, to be announced in a speech to German businessmen later, is a response to European Commission President Jacques DeLores' more radical proposal for a single currency and European bank.

The Conservative Government is sceptical about full monetary union and regards this new proposal as a way of putting forward a genuine alternative.

It is envisaged that the currency, which Mr Major calls the "hard Ecu", would be used initially by businesses and tourists, and managed by a new European monetary fund.

Although the proposal does not rule out the abolition of national currencies, it represents a more cautious substitute to Mr DeLores' plan for economic unity.

"Without a doubt it's a victory for common sense"

Euro-sceptic Bill Cash MP

Mr Major said: "What we're seeking to do is to provide a currency that those who wish to use it could use, either for business transactions or personal transactions, without going down the route of a single currency across the whole of Europe, which we think has enormous difficulties and enormous dangers too."

The announcement follows Prime Minister Margaret Thatcher's comments earlier this week that she did not believe a commitment to a single currency would be made in her lifetime.

Reaction from Conservative MPs was mixed.

From the Euro-sceptic wing of the party, Bill Cash MP said: "Without a doubt it's a victory for common sense, a victory for the prime minister and for the cabinet, and a victory for Britain."

But others were disappointed by the plan's caution, fearing that it might be perceived as another delaying tactic by Britain's European neighbours.

Hugh Dykes MP said: "It seems a pity that always when these proposals are coming forward we're always holding back".

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