Britain mulls change to common European currency
December 4, 1996
Web posted at: 5:00 a.m. EST (1000 GMT)
From Correspondent Siobhan Darrow
LONDON (CNN) -- The pound sterling is as British as Big Ben or the changing of the guard at Buckingham Palace. It's been the currency of the realm since the 13th century. But it will be a thing of the past if Britain participates in Europe's planned common currency.
With a decision on whether to join the European Monetary Union only a year away, Britain is growing increasingly nervous over the prospect of losing a cherished symbol of sovereignty.
"There is undoubtedly concern within the U.K. about what appears an endless ceding of sovereignty and power from Westminster, from London, from the U.K. to Brussels, to the E.U.," said Stephen Yorke of SBC Warburg Bank. "And the single currency is a particular, exact example of that."
The Queen's reassuring image would not be banished entirely from the EMU monetary system; participating countries will be allowed to design one side of the new 'Euro' coin. But Anglo distrust abounds over a currency whose strength does not flow from Britain and her time-tested government.
Euroskeptics on the street are mirrored in the Houses of Parliament. British politicians say they plan to sit on the sidelines and observe the action on Europe's political battlefield before trading in the treasured pound for the euro.
Despite Britain's typically wary outlook on things European, many in the business world welcome the expected benefits of a common currency.
"If it's a success, it certainly could help make Europe a much more powerful economic block," said Kate Barker of the Confederation of British Industry.
The British switchover would take six months, during which time dual currencies would be used. But bankers and shopkeepers want a quicker transition to minimize the difficulties inherent in the simultaneous use of two currencies.
"At the end of the day, a lot of the work is going to fall on the retailers to explain to everybody, to the consumer, what this new coinage means," said Peter Williams of retailer Selfridge's.
Retailers also want relief on the proposed January 1 launch date to avoid massive confusion during the high-traffic holiday shopping season.
Retailers aren't the only ones facing practical obstacles if the common currency manages to clear Britain's political hurdles. The Bank of England, for instance, would take at least three years just to print enough euro notes to go around.
Europeans across the Channel tend to be more open to the change. France and Germany will be the first countries to unite their currencies. With or without the British, the euro will be launched in 1999, driven by the all-powerful German deutsche mark.
But the 64,000 euro question remains: Will Britain join Europe in its biggest step yet toward creating an integrated continent, what many dub a "United State of Europe?"
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