New Threat to UK Industry Over Joining EMU as Euro Slides Again
August 5, 2000 - 0:0
LONDON Whilst sterling continues to rise against the euro, the UK government is coming under new pressure from overseas investors over its wait-and see' policy toward joining the European Monetary Union (EMU).
Matsushita Electric, the Japanese parent of Panasonic and National brands, warned Britain on Friday that it and other foreign investors would transfer their factories elsewhere unless Britain committed itself to joining the euro.
Referring to the strength of the pound, Junio Nakamura, the president of the world's biggest consumer electronics manufacturer told reporters in Tokyo on Thursday, "This is making it difficult for us to continue production in the country." The company employs 5,000 people in factories across the UK making household electrical goods, having set up the biggest TV making factory in Europe in Cardiff, Wales.
But for Matsushita president "the immediate question is when the pound will be included in the euro." His remarks came as the pound was enjoying a rally against a weak euro, currently at its 10-week high. Pound went up five pfennigs on Thursday to just below 3.24 Dutch marks, its highest level since May.
The rise coincided with the decision by the Bank of England's Monetary Policy Committee to keep the interest rates on hold for the sixth successive month at 6 percent.
Although industry leaders took a sigh of relief when the bank's decision was announced, they were less pleased to see the pound rise against euro.
This makes British goods more expensive in European markets hitting export industries, though their performance has been better than expected.
In a similar move, Japanese car giant Nissan, now owned by Renault of France, had warned last month that the future of its car production plant in Britain was in doubt due to the strength of the pound.
Following this threat, Stephen Byers, British trade and Industry secretary increased the pressure on Tony Blair, prime minister, to take a more proactive approach toward joining the euro, by describing Nissan's threat a "euro warning." A recent government memo leaked to the sections of British press had also warned that the manufacturing sector of the UK economy will face a "meltdown" with huge loss of jobs unless the government commits itself to an "indispensable" entry into the euro zone.
The euro issue is increasingly becoming a nightmare for the Labour government that has committed itself only as far as holding a referendum on the subject after the next general election, whilst domestic and foreign investors continually demand a stronger and quicker commitment.
(IRNA)
Matsushita Electric, the Japanese parent of Panasonic and National brands, warned Britain on Friday that it and other foreign investors would transfer their factories elsewhere unless Britain committed itself to joining the euro.
Referring to the strength of the pound, Junio Nakamura, the president of the world's biggest consumer electronics manufacturer told reporters in Tokyo on Thursday, "This is making it difficult for us to continue production in the country." The company employs 5,000 people in factories across the UK making household electrical goods, having set up the biggest TV making factory in Europe in Cardiff, Wales.
But for Matsushita president "the immediate question is when the pound will be included in the euro." His remarks came as the pound was enjoying a rally against a weak euro, currently at its 10-week high. Pound went up five pfennigs on Thursday to just below 3.24 Dutch marks, its highest level since May.
The rise coincided with the decision by the Bank of England's Monetary Policy Committee to keep the interest rates on hold for the sixth successive month at 6 percent.
Although industry leaders took a sigh of relief when the bank's decision was announced, they were less pleased to see the pound rise against euro.
This makes British goods more expensive in European markets hitting export industries, though their performance has been better than expected.
In a similar move, Japanese car giant Nissan, now owned by Renault of France, had warned last month that the future of its car production plant in Britain was in doubt due to the strength of the pound.
Following this threat, Stephen Byers, British trade and Industry secretary increased the pressure on Tony Blair, prime minister, to take a more proactive approach toward joining the euro, by describing Nissan's threat a "euro warning." A recent government memo leaked to the sections of British press had also warned that the manufacturing sector of the UK economy will face a "meltdown" with huge loss of jobs unless the government commits itself to an "indispensable" entry into the euro zone.
The euro issue is increasingly becoming a nightmare for the Labour government that has committed itself only as far as holding a referendum on the subject after the next general election, whilst domestic and foreign investors continually demand a stronger and quicker commitment.
(IRNA)