U.K. Businesses Increasingly Back Adoption of the Euro

However, the public isn't quite so receptive.
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The British may have embraced spicier Continental haute cuisine in recent years, but most people in the U.K. still love their classic fish and chips.

Regardless of what they choose to eat, British business is hoping the skeptical U.K. public can be convinced to pay for their meals with Europe's single currency, the euro, instead of their beloved pound.

A survey of 5,000 members of the

Confederation of British Industry

released on Tuesday showed U.K. businesses support their nation joining the euro by a 3-1 majority. The strong showing encouraged the CBI's national council to back a statement favoring -- in principle -- joining the 11 other members of the currency union, but without setting a specific timeframe. The CBI represents over 250,000 pubic and private companies.

That's in stark contrast to the British public's attitudes. Some of the Queen's subjects, it seems, are terrified of giving up an inch of national sovereignty to Brussels' eurocrats, the Germans, or perhaps even worse, the French. The euro's recent slide against the U.S. dollar hasn't helped. A polling last week by

Mori

-- which also conducted the CBI poll -- found 58% of the population was opposed to joining the euro, compared with 27% prepared to trade in the sterling for the new currency.

The CBI poll likely comes as a welcome relief to the pro-euro forces in Britain, including Prime Minister

Tony Blair

, which have seen nascent momentum for the euro at the beginning of the year completely reversed over the last six months. More importantly, however, the CBI results highlight how key British industry will be in the government's quest to win over the skeptical man in the street and his patriotic love of the pound.

As the euro has lost roughly 15% of its value vs. the dollar since January, the British public's faith that

EMU

(Economic and Monetary Union) will succeed has plummeted. That, in turn, helped euro-skeptic parties in last month's elections for the

European Parliament

to victory. The

Labour Party

, which, under Blair, has agreed to a nationwide referendum on joining the euro after the next general election a couple of years from now, took a drubbing from the predominately anti-euro

Conservatives

.

The Tories will likely try to exploit anti-euro sentiment during the next election. However, public disapproval isn't quite as rock-solid as it looks. In the Mori poll, when asked if they would support the introduction of the euro if the government campaigned strongly for it, the public's negative vote dropped by 8 percentage points.

Moreover, more than a third of those opposed to the euro said they could be persuaded otherwise if they thought it would be good for the British economy, according to Mori. Tuesday's CBI support might be the first step down that long road.

"U.K. membership of a successful EMU would enable British firms to participate fully in a more complete and competitive single market, and remove the harmful impact of exchange-rate volatility against the euro," said

CBI President Sir Clive Thompson

in a press release.

While the CBI's support remains conditional upon the continued success of the euro, public opinion may also begin to shift to Blair and the pro-euro camp if the average punter begins link the common currency with more jobs and economic prosperity for Britain.

"Clearly, opinion polls can move over time and a big swing once the euro currency is actually in circulation in 2002 cannot be ruled out," says David Brickman, an economist for

PaineWebber International

in London.

However, to what degree British business and the Labour government can convince John Q. Public that his European cuisine is best paid with a European currency remains to be seen.