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«Do not imitate the british example»

June 5 the Tony Blair's Cabinet will discuss in London the UK entry in the EMU or a new "not yet" like in 1997. The canadian Robert Mundell, Nobel laureate of 99 and the "godfather" in 70's of the EMU, talks with about this crucial week in a short interview from Stockholm the week before the Cabinet decision. Mundell, professor at Columbia, in New York, with other personalities including Paul Volcker,the former head of US central Bank before Greenspan, and Stanley Fischer, a former IMF managing director, announced at May 8th that "it is clear that not only is the economic evidence overwhelmingly in favour of euro entry, so is the opinion of the economics profession".

Interview by Jorge Nascimento Rodrigues, May 2003
Web page of Mundell:


Do you expect that UK will entry the eurozone, despite political divergences with other european powers on the transatlantic issue and global strategy of Bush Administration?

Britain will see its entry as the best way of promoting its leadership in Europe, in keeping Europe in NATO and ensuring that the EU does not become anti-American. It will enter. The only question is when.

The five economic tests were a temporizing distraction that increased the power of the Treasury and Gordon Brown in the Blair Cabinet

The 5 economic tests where a good methodology from the UK Treasury? Do you think its something other european countries must do before entring the eurozone?

The five economic tests were a temporizing distraction that increased the power of the Treasury and Gordon Brown in the Blair Cabinet and seemed to present an objective economic framework for taking the decision out of politics. The other countries do not need to imitate the British example.

The USD devaluation is a good or a bad argument for the UK entry in the eurozone?

Neither. Large swings in the dollar-euro rate present a problem for Britain and all the countries in the euro zone. The strong euro will help Britain negotiate a lower rate for the pound in the euro. But a strong euro is a symptom of an excessively tight monetary policy in the ECB and is not an appropriate policy in time of recession. The ECB should not let the United States manipulate the dollar-euro rate against Europe's interests.

The entry of Britain will make the economy of the euro area comparable in size to the US economy, and increase the long-run strength of the euro as an international reserve currency

What will be the main economic effects for Europe of UK entry in the eurozone?

The entry of Britain will be a factor in keeping the dollar-euro rate more stable than it otherwise will be. It will also make the economy of the euro area comparable in size to the US economy, and increase the long-run strength of the euro as an international reserve currency.

Do you think it will be a good signal for other countries like Sweden?

Britain's entry will surely tend to sway opinion in Sweden and Denmark towards entry. But there remain residual fears in these socialistic monarchies that the absorpiton of their national currencies in the euro will lose yet another symbol of their separate identity.

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