BMW, the owners of the Rover Group, have issued an investment warning over European Monetary Union.
The Government and the Opposition have explained their position over the single currency amid an investment warning from the chairman of BMW. Bernd Pischetsrieder, whose company owns the Rover group, said investment in the UK was “at risk” if Britain did not join European monetary union.
Chancellor Gordon Brown launched details of a campaign to bring the debate over economic and monetary union to the public and outlined more details of the Government’s plans to help business prepare for using the euro. In his address to the CBI, Mr Brown called on businesses to get ready for the start-date of EMU on January 1, 1999.
He said firms must “get down together to the serious business” of preparing for the introduction of European economic and monetary union. “It is now time in the national economic interest to set aside the divisions over Europe that have caused – over a long period of time – indecision, instability, a loss of influence abroad, and denied us a national economic consensus.”
He said the Government had declared itself in favour of the principle of a single currency and would now make sure firm preparations were put in place to ensure it was a success.
Later the Conservative leader, William Hague, tackled his differences with industry over the issue head-on by warning business could find itself trapped in a burning building “with no exits” because of monetary union.
Mr Hague voiced “his deep concerns” about EMU described supporters as acting like “lemmings. A single currency should be low on Europe’s list of priorities. Instead it is fast becoming its only priority,” he told delegates.
Economic and monetary union was a political idea but unlike the Exchange Rate Mechanism, a single currency was for “all time”. Mr Hague would have been buoyed by comments by leading business figures such as Sir Stanley Kalms, the chairman of Dixons, who said the CBI was failing to represent its grassroots over EMU, which he likened to castration.
“Our voices may be pitched higher in the councils of Europe but only at the cost of our economic virility,” he said to laughter from the audience. He said the CBI leadership had claimed the high ground in the argument to join EMU but that it had failed to present the full picture.
However the chairman of BMW, Bernd Pischetsrieder, whose company employs 40,000 workers in the UK, has said that unless Britain enters the single currency he would not recommmend any further investment in the UK by the German car makers. “The current investment is secure but further inward investment could be at risk.”
The President of the CBI, Sir Colin Marshall, played safe congratulating both the Chancellor and Tory leader. He said that the Chancellor’s speech was clearer on the single currency than the statement he made to Parliament a few weeks ago.
“What he is pressing upon business is the need for us to get down to preparing for eventual entry into EMU, irrespective of when that might occur.” Sir Colin said people in Britain had to be prepared to use the euro as their currency and for the impact this would have on their lives.
“For the business sector I think we have to adjust and be ready for doing business in the euro certainly by the beginning of 2002 when it is expected that the euro will be the currency of the countries that have joined EMU.” He also thanked William Hague for putting his case “so forcefully”, adding: “The CBI welcomes your call to have a debate on the real issues – something we have been calling for for some time.”