Have We Been Left out in the Cold with the Scraps?; Guy Newey and Elizabeth Clark Look at How Parts of Europe Have Embraced the Euro -and Jonathan Walker Examines Gordon Brown's Influence

Article excerpt

Byline: Guy Newey and Elizabeth Clark

It was on New Year's Day 2002 that a large slice of Europe embarked on the largest monetary changeover the world has ever seen.

One notable absentee was the United Kingdom and, according to former Tory Conservative Deputy Prime Minister Lord Heseltine, its loss was Europe's gain.

'The introduction of the euro for over 300 million people in 12 countries will give European people a much wider choice of goods and services at lower prices as enhanced competition helps the best companies and drives out the worst, he declared.

'But it will also put British customers, citizens and companies at a psychological and competitive disadvantage for which we will pay a price.'

But 18 months down the line, as the Government continues to stumble and prevaricate over entry, have we been left out in the cold, fighting for scraps from the European table?

The huge fanfare and optimism for a new age of European partnership has turned sticky as the slowing world economy has taken its toll on the major eurozone partners, France and Germany.

The major difficulty facing the two largest euro economies is the strict set of economic rules they created for themselves in the Stability and Growth Pact. They were implemented to ensure that 'profligate' smaller nations in the eurozone did not spiral out of control, undermining the credibility of so-called prudent members of the currency zone. But as France and Germany face high unemployment and slow growth, the draconian rules have come back to haunt them and they are calling for reform.

At the same time, the 'Celtic Tiger' Irish economy has required greater controls to prevent it over-heating.

The recent conclusion of a European Commission report into the pact confirmed Commission President's Romano Prodi's infamous conclusion that the over-tight rules were 'stupid'.

But while the member countries scrap over economic complexities, how is the euro affecting consumers in Birmingham, the Second City of the European Union's second economy?

Birmingham International Airport and the city centre Marks and Spencer branch are the two most high-profile euro-accepting outlets in Birmingham, but the retailer reports an insignificant amount of trade in the new currency. …