Monday, December 01, 2008

When pigs grow wings and fly!

UK 'closer' to adopting the euro

The UK is "closer than ever before" to joining the euro, according to the president of the European Commission, Jose Manuel Barroso.

Speaking on a French radio show,
he said British politicians were considering the move because of the effects of the global credit crunch.

In the same interview, Mr Barroso also forecast that interest rates will drop in Europe.

However Downing Street said its position on the euro remained the same.

Mr Barroso acknowledged "the majority" of British people continued to oppose joining the eurozone.

But he said the recent economic uncertainty had made the currency a far more attractive option.

Confidential conversations

In the RTL radio/LCI television broadcast, the former prime minister of Portugal said: "We are now closer than ever before.

"I'm not going to break the confidentiality of certain conversations, but some British politicians have already told me, 'If we had the euro, we would have been better off'. "

He said that the current poor economic situation had emphasised the importance of the euro and the UK but added he believed a move would not take place in the immediate future.

"I know that the majority in Britain are still opposed, but there is a period of consideration under way and the people who matter in Britain are currently thinking about it", he said.

The value of sterling compared with other currencies has fallen during the credit crunch, and the UK government has had to spend massively in recent months to try to support the economy.

'Awaiting decisions'

During the interview, Mr Barroso highlighted the situation in Denmark - an EU state that voted against joining the eurozone in 2000, but is now considering holding a new referendum on the single currency.

A Downing Street spokesman said: "We have no comment on this. Our position on the euro is the same - it has not changed."

Mr Barroso also said he expected the European Central Bank (ECB) to make a clear move to cut interest rates next week.

He said the conditions were right for a fall, but did not give further details adding: "I am awaiting decisions from the European Central Bank that go in this direction."

Jean-Claude Trichet, president of the ECB, has said that the bank could cut rates in the coming week as long as there is evidence that inflation pressures have eased.

The European Union has called for a 200bn euro boost across Europe to help stimulate an economic recovery.

--from The BBC --

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