The UK Government's policy on economic and monetary policy (EMU)
On 9 June 2003 the Government published the assessment of the five economic tests, the 18 supporting studies, and the third outline national changeover plan.
The assessment sets out the real benefits to Britain of membership of the single currency, shows that with the achievement of sustainable convergence and flexibility all five tests could and can be met, and lays down the concrete and practical steps which the Government will follow – radical steps which set out a new direction for reform, steps which set out the clear path ahead for Britain. At all times the Government has and will put stability and the national economic interest first.
The Chancellor’s statement and the assessment show:
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we have strengthened our commitment to and support for the principle of joining the euro – showing that the gains to Britain are considerable;
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the five tests are our stability guarantee. To meet them would ensure that we will not put at risk our economy or our public services. At all times we will put stability and the national economic interest first. While there has been significant progress in achieving cyclical convergence, we still have to meet the two tests of sustainable convergence and flexibility. But, as the Chancellor said, with the achievement of sustainable convergence and flexibility, all five tests could and can be met;
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to achieve sustainable and durable convergence to meet the five tests, we have announced major reforms – including a new inflation target, reforms to housing, planning and to promote flexibility in the economy, and consultation on a new fiscal regime - to be implemented immediately and over the next year. It is a reform agenda - right for Britain’s economic interest and right to help meet the five tests; a reform agenda on which we believe there is a realistic prospect of making significant progress over the next year;
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we will report on progress in the Budget next year. We can then consider the extent of progress and determine whether on the basis of it we make a further Treasury assessment of the five tests which - if positive next year - would allow us at that time to put the issue before the British people in a referendum;
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a modern, long-term, and deep seated pro-European consensus in Britain about Britain’s role in Europe and Europe’s role in the world can and will be built.