The Wall Street Journal

November 14, 2002

 Britain's Blair Promises Vote on Euro Use if Time Is Right2
 Many Believe Politics, Not Science Will Drive U.K. Decision on Euro3
 Britain's Pro-Euro Lobby Seizes on AGCO Decision to Shut Plant4

Euro Referendum Seems Low
On British Legislative Agenda


LONDON -- A speech about the government's legislative agenda reinforced growing doubts that Prime Minister Tony Blair will try to persuade the British to adopt the euro in the near future.

In the so-called Queen's Speech, the government set out its legislative priorities for the coming year, such as battling crime, banning hunting with dogs and changing licensing laws on the sale of alcohol to allow pubs to stay open 24 hours a day. But the possibility of adopting the common currency received just a brief mention near the end of the speech. The government merely restated its position that it will decide whether to call a referendum on joining the euro by June.

"Once again, the Queen's Speech has seen the government ducking out, not even proposing a referendum bill to set out how the British people will decide," said Matthew Taylor, treasury spokesman for the opposition Liberal Democrat party, which is committed to joining the euro. "This delay comes at a huge cost."

The annual Queen's Speech is read to the combined houses of Parliament by the British monarch, Queen Elizabeth II. However, the speech is written for her by the prime minister and is watched keenly because it sets his political agenda for the coming year.

In May, a cabinet minister said the government was then considering inserting into the speech the enabling legislation that would be needed to hold a euro referendum next year. While that legislation can be introduced later, a mention in the Queen's Speech would have ensured a quick referendum once a decision was made. It also could have jump-started a campaign aimed at changing popular opinion, which remains opposed to ditching the pound in favor of the euro. Polls regularly show margins of about 2-to-1 against adopting the euro.

Some large companies want Britain to adopt the euro as a way to eliminate exchange-rate risk on trade with the rest of Europe. But many British people fear the move would transfer too much power to European bureaucrats.

The main pro-euro lobby, Britain in Europe, said the speech was as expected. Otherwise, said a group spokesman, the government could have been accused of prejudging the five economic tests it has set as the criteria to determine if joining the 12 current euro-zone economies would be in the U.K.'s national interest. Those tests are to be assessed by June.

But other europhiles were disappointed, and the main anti-euro lobby, the No campaign, said the speech offered new evidence the euro has been moved lower on the government's agenda.

"If they wanted to call a referendum next year, there had to be a precampaign. Putting it in the Queen's Speech would have been one way of doing that," said No campaign director George Eurtice. "I think that things that have happened in recent months -- the growing difficulties with the [euro-zone's] stability and growth pact, problems with the economy in Germany and with the [European Central Bank's] interest-rate policy -- make a very difficult backdrop against which to launch a campaign."

Write to Marc Champion at marc.champion@wsj.com1

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Updated November 14, 2002

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