Counting two years back from that countries will have to be inside the normal bands of

General — July 26, 2010 at 8:30

Counting two years back from that, countries will have to be inside the “normal” bands of the ERM by the beginning of next year if they are to qualify for EMU. This may be why the Italian government has been talking about the possibility of taking the lira back into the ERM by the end of 1995.The Germans have quite definitely noticed this provision in the treaty, and appear determined to enforce it to the letter. In order to qualify for membership, each country must be participating within the “normal” bands of the ERM for at least two years before the start date. Furthermore, there must be no unilateral currency devaluations within the ERM over that period. Let us assume that the launch date is 1 January 1999, and work back from there.In order to make this a practicable starting point, the participating countries will obviously need to be selected well in advance, probably by 1 January 1998.

But as David Blake, of Goldman Sachs, has pointed out, another provision in the treaty could bring the effective decision point a great deal closer. Remember that the Maastricht Treaty says that EMU can only be launched in 1997 if a majority of the member states meet the convergence criteria by then Everyone accepts that this will not now happen. However, if the 1997 date is missed, then the heads of government must, by 1 January 1999, set another date for the start of EMU. The date could in theory be after 1999, though that was not the intention of the treaty.This all still seems a comfortable distance into the future. If we do nothing, we could be choosing by default to stay out of EMU. Although the paper will presumably accept that 1997 is no longer possible as a start date, it will not abandon the possibility of 1 January 1998. And the run-up to a 1998 launch – or even a launch in 1999 – means that Britain could face some critical decisions much earlier than it would like.

But in fact it is far from clear that events on the other side of the Channel will remain conveniently frozen in aspic until we have gone to the polls.
On Wednesday, the Commission will publish its long-awaited Green Paper on the transition to stage three of EMU. This suited the British Government, which wants to shuffle the crunch decision until well into the next parliament. Late last year, almost everyone in the European Union, including the Commission, began tacitly to accept that the first possible date for the launch of EMU (1 January 1997) was a dead duck. For the moment, it seems that the protaganists are content to let slumbering dogs lie. One reason for this unusual British reticence is that the issue seemed to have slipped down the agenda in Brussels.

Furthermore, a detailed and sceptical report on the subject by the Treasury’s Independent Forecasting Panel passed into oblivion. Last week, for example, nobody noticed that Tony Blair’s comprehensive speech on Labour’s economic strategy failed to devote a single one of its 9,000 words to the subject. European monetary union has imperceptibly slipped from centre stage in the UK political debate in recent months. Members of the staff union Unifi and the Banking, Insurance and Finance Union will join forces to picket around 150 of Barclays’ 2,000 branches.
Barclays will face calls for further talks over pay but the bank insists the settlement is “fair and competitive” and has been boosted by a profit sharing bonus of 7.5%.Unifi said today that Barclays had backed down from its threat to sack staff involved in the strike and the union now expects most of its 40,000 members to support the action.Most branches will be closed or will operate on a skeleton staff and those which do open will only offer “minimal services”, said general secretary Paul Snowball.He said staff had been awarded below inflation pay rises for four years in a row and although bonuses were given, they were discretionary and non-pensionable.”The bank faces a virtual shutdown tomorrow and we are confident most of our workers will support the strike,” he said tonight.Unifi claims its 5,000 members who work as managers are pressing to be ballotted over pay and could join any future strikes.Unifi’s executive will meet on Thursday to decide its next move in the dispute.Barclays has said it will do everything it can to ensure inconvenience to customers is kept to a minimum tomorrow.end mt.