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The industrialists are wrong – there is nothing left to resolve on European monetary union

September 5th, 1996

A letter to the Editor of the Financial Times which was published on 7th September 1996.

The assertion by Mr Tony Hales and fourteen other company executives (Letters, 5 Sept.) that Britain’s likely refusal to abolish the pound sterling is based on a “serious misunderstanding of the process of monetary union” is clearly based on their own misunderstanding of the Maastricht Treaty.

It is not true, as they say, that “many aspects of monetary union remain to be resolved”.  If they would take the trouble to read what they pronounce on so confidently they would find that all the important provisions of monetary union are set out in black and white in Articles 2 and 102-109 and in 12 protocols of the Treaty.

Protocol 3 alone runs to nine chapters and 53 articles.  In protocol 3 the operation and constitution of the European Central Bank, the handover of our gold and dollar reserves, which belong to the British people (Art 30), the capital subscription (£700M in our case) (Art 28), the transition arrangements including exchange and issue of bank notes (Arts 16, 52 and 53), membership of the Bank’s Executive Board (Art 50), its governing council (Art 11), the Bank’s responsibilities (Art 12) and so on are all completely laid down.

Only the name of the currency and the location of the Central Bank were left open and these have now been decided.

In November 1991 a similar group of CBI executives wrote to the Times saying how important it was for Britain to stay in the ERM.  A year later, after White Wednesday, they were writing to say how important it was to keep open an option to re-enter the ERM.

Four years on, after 800,000 lost jobs and £30Bn of lost output, from which we are only now slowly recovering, they are at it again.