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Single Currency - Economic & Monetary Union (EMU)

What is EMU?

As part of Economic and Monetary Union, eleven European Union countries introduced a single currency - the euro - on 1 January 1999. These were: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Portugal, Spain and The Netherlands. Greece joined the single currency on 1 January 2001. In due course, it will also be introduced in the ten countries - Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia - which join the EU on 1 May 2004.

The United Kingdom has not joined the single currency, but British firms are still affected, especially those which buy and sell products in the eurozone. In addition to this, many UK businesses which do not export or import may be affected through their supply chains. UK businesses should continue considering how the euro affects them and what they should do to prepare.

What is the Government's position?

In principle, the Government is in favour of UK membership of EMU; in practice, the economic conditions must be right. The determining factor underpinning any Government decision on membership of the single currency is the national economic interest and whether the economic case for joining is clear and unambiguous. On the basis of the assessment, the Government will take a decision on whether the five tests have been met. If the Government recommends UK entry, it will be put to a vote in Parliament and then to a referendum of the British people. Government, Parliament and the people must all agree.

What is Government doing to assist preparations?

The Government has a dedicated unit in the Treasury - the Euro Preparations Unit (EPU) to help UK businesses prepare and raise awareness of the implications of the euro.A series of fact sheets and case studies, prepared by the EPU, on business preparation for the euro are available and specific information on business preparations can be obtained on the Treasury's Euro website.

The DTI and other government departments are working closely with the Treasury to ensure business and public authorities are prepared for the euro.

Further information for Business is also availible from the Trading in Europe pages of  Business Link website(see related external links)

Contact

Veronica Haidar
Tel: 020 7215 2295
Fax: 020 7215 2235
E-mail: veronica.haidar@dti.gov.uk