TO ECU OR NOT TO ECU, THAT IS THE QUESTION

As the political parties gear up for the General Election battle one thing is certain - the greatest and most passionate debate of all will focus on the European Single Currency, known as the Ecu.

But what will the single currency mean to Britain's voters? Will it herald a stable economy? Will there be more cash in our pockets? Or will we see taxes going through the roof and a possible repeat of the disaster of the Exchange Rate Mechanism (ERM)?

Here two Tories on opposite sides of their party's great Ecu divide put their case...

FOR

Euro-MP John Stevens

The single currency is about creating the largest pool of capital in the world and using it to increase our strength by replacing the dollar as the leading world currency.

It won't take away power from Britain. It WILL take financial power from politicians and put it where it belongs - with the banks.

Before the Bank of England was nationalised in 1946 we had the best inflation record and strongest currency in the world.

Since then, our record on inflation has plummeted. So if the banks are controlling a single economy, they will be able to keep inflation low. Taxes, too, will be kept down.

There will be job casualties in banking. Instead of 150 banks in the European Union, we will need only four.

However, the man in the street will find bank charges slashed. Small businesses will prosper because there will be no different exchange rates that cut their profits.

If we delay or opt out we will find ourselves caught between two economic super powers - the U.S. and the EU - dependent on both and influencing neither.

AGAINST

Jonathan Collett, campaign director of Euro-sceptic organisation the Bruges Group

How can you have a single European currency when there is no single European economy?

There are different financial structures, labour markets and productivity rates. Forcing them all into one mould cannot work.

A Europe Central Bank would fix a single EU interest rate. In a crisis Britain would not be able to devalue the currency or lower the interest rate to stabilise its own economy. We would have to lower wages and prices. Any rise in interest rates would have an immediate impact on Britain - home mortgage payments would go up.

Governments would rely more on taxes to control their economy. In Britain the tax rate could rise to 40 per cent.

Spending restrictions would mean massive unemployment and cuts in state benefits. Many businesses, swamped by changeover costs, would go under.

With 50 per cent of our trade and 83 per cent of our foreign investments outside Europe, you have to ask: Why do we need a single currency anyway?

Copyright 1996 MGN LTD
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