Nearly two thirds of finance directors believe that the UK’s entry into the euro is inevitable, according to an exclusive survey.
This week’s Accountancy Age/Reed Accountancy Big Question found that 62% of those asked thought that euro entry will eventually happen, despite the continuing conflict between prime minister Tony Blair and chancellor Gordon Brown over the country’s readiness to do so.
The results also contrast with last week’s exclusive Accountancy Age reader survey, in which 83% of those polled thought that the chancellor’s five economic tests for entry into the euro had not yet been met.
The government has always promised that the public will be asked to vote in a referendum on the subject of the euro before any decision on entry is made, but only 31% of FDs think this means our entry into the single currency can be avoided.
‘Big business wants it to happen and since ultimately this funds the economy then it will happen,’ said Michael Barnes, FD at Hartley Botamic. ‘Blair wants it now so that it will curry favour with the City.’
‘Purely from a business point of view, it can’t come soon enough,’ agreed another FD. ‘It’s a pain working out the foreign exchange differences. As the EC expands, a move into the euro is inevitable.’
John Buckley, financial director at Sauter Automation, said: ‘The main thing is to end the uncertainty, so that the currency markets can adjust to the reality of the current situation. As long as rumour and secrecy persist, the markets will make life very difficult for those of us who trade in the euro against sterling.’
Others were not so sure that the government would be able to force the UK into the euro with so many of the public seemingly against the issue.
‘The Blair/Brown split is only symptomatic of the division of the nation on this issue,’ said one respondent. ‘Any decision will surely go to a people’s referendum, which at the moment would get defeated. Blair will not risk any more loss of face following Iraq, so I think we will stay out of the euro until after the next election at least.’
Another agreed that it would be ‘political suicide to suggest entry now as there is such deep political and national opposition to it’.
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