BritainUSA Homepage Artist David Mach created this public sculpture in Kingston upon Thames from old telephone boxes. The Senedd, National Assembly for Wales, Cardiff Bay Scottish wind farm. Liam Neeson, actor from Northern Ireland.
 Britain's official website for the USA
  Click here for a print-friendly version of this page. Print Version | Ambassador's Greeting | Contact Us | Site Map | Job Postings | Email Alerts
Visas and Visiting the UK
Passport and Consular Services
Britain in the US
UK/US Relations
UK Science and Innovation
Study in the UK
British Foreign Policy
Britain's Economy: The Euro
Central and Latin America
Commonwealth and Overseas Territories
Defense and Security
Drugs & Crime
Energy and Environment
Europe and Central Asia
Human Rights
Development and Humanitarian Assistance
Middle East
South Asia
Trade Policy
United Nations
UK Devolved Administrations
All about Britain
Britain for Kids
BritainUSA Home > British Foreign Policy
Britain's Economy: The Euro

The British Government's policy on the Euro, including whether or not it meets the Five Economic Tests.

Click here for more Britain's Economy: The Euro news ...

The UK governments policy on membership of the single currency (the euro) remains as set out by the chancellor of the Exchequer in his statement to the House of Commons in October 1997, and again in the chancellors statement on the five tests assessment in June 2003.

The determining factor underpinning any UK decision on membership of the single currency is the national economic interest and whether the economic case for joining is clear and unambiguous. The chancellor announced in the 2005 Budget that “In this Budget the Treasury does not propose to initiate a further euro assessment”. The Treasury will again review the situation in the 2006 Budget.

The five economic tests:

  • Convergence: are business cycles and economic structures compatible so that we and others could live comfortably with euro interest rates on a permanent basis?
  • Flexibility: if problems emerge, is there sufficient flexibility to deal with them?
  • Investment: would joining EMU create better conditions for firms making long term decisions to invest in Britain?
  • Financial services: what impact would entry into EMU have on the competitive position of the UKs financial services industry, particularly the Citys wholesale markets?
  • Growth, stability and employment: in summary, will joining EMU promote higher growth, stability and a lasting increase in jobs?

Current assessment
The five tests assessment of June 2003 came to a clear position.

“Overall the Treasury assessment is that since 1997 the UK has made real progress towards meeting the five economic tests. But, on balance, though the potential benefits of increased investment, trade, a boost to financial services, growth and jobs are clear, we cannot at this point in time conclude that there is sustainable and durable convergence or sufficient flexibility to cope with any potential difficulties within the euro area."

"So, despite the risks and costs from delaying the benefits of joining, a clear and unambiguous case for UK membership of EMU has not at the present time been made and a decision to join now would not be in the national economic interest.”

For further general information, including details of the government's policy and on the euro and business, visit HM Treasury's euro website.

Britain's Economy: The Euro
Sign up here!
Get BritainUSA Email Alerts



About Us | Accessibility | Feedback | User Information | Email this page | pdf Reader
The Royal Coat of Arms
This site is produced and maintained by the British Embassy in Washington DC. We assume no legal liability for the accuracy, completeness, or usefulness of any information disclosed in the site. Links to other Internet sites from this site should not be construed as an endorsement of the views contained therein.