Britain unlikely to be ready for meet EMU

THE Minister for Finance, Mr Quinn, has said that the British Labour Government is not likely to have enough time to prepare to enter EMU in 1999, even if it wanted to. But he has stressed that Ireland will go ahead regardless.

Speaking in Finland yesterday, Mr Quinn said he doubted that the new British government would be able to make all of the necessary preparations to participate in the single currency in 1999, even if it wanted to.

Nevertheless, Ireland intended to be a founder of a single European currency, regardless of whether Britain stayed in or out of the final stages of Economic and Monetary Union.

Mr Quinn, who held a series of meeting with members of Finland's government yesterday, went on to warn that if Britain decided to opt out of the single currency, and devalued sterling by 20 per cent, Ireland would stand to lose about 28,000 jobs as a direct consequence.

"Even in that event, participation in EMU would be beneficial overall for Ireland," he stated.

The possibility potential job losses in this scenario was highlighted last year by the Economic and Social Research Institute in its report on the impact of EMU on the Irish economy.

However, it stressed that, despite the job losses, the overall benefits to the Irish economy would outweigh the cost.

The sectors most exposed to losses as a result of the Britain's absence include clothing, textiles, and food processing, although individual firms in other sectors may also face difficulties, according to the institute.

But it highlighted that the main gains for the Irish economy would come from lower interest rates and there would be substantial savings on currency transactions costs.

Meanwhile, a new business poll has shown that British business leaders are split over the ability of the new government to successfully run the economy. The survey, by Dun & Bradstreet (D&B), reflects the view of 600 managing and finance directors in Britain, with 45 per cent expressing confidence about the new government's ability to run the economy.

A further 45 per cent said they were not confident, while 10 per cent said it was too early to tell what would happen. "Business leaders appear from the results of this poll to be more hardheaded than the rest of the general public," said Mr Philip Mellor, senior analyst for D&B.

"In contrast to the general euphoria across the country. . . the jury is out. Business leaders will wait and see before they deliver their verdict."

Nearly 40 per cent of the business leaders polled said the election would have little impact on their businesses. But of those who said it would have an effect, 58 per cent said it would be positive.

One third of the businessmen said Europe was the key issue to be addressed by the new government. Taxation and national insurance were named by 27 per cent as the most important areas of policy.

London businessmen proved most in favour of the new government. Some 53.3 per cent said they were confident it would run the economy well.