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British official says euro has acquired vitality; London to be gateway for Indian investors

London will act as the financial gateway to Europe for Indian investors and borrowers notwithstanding the fact that Britain has not joined the euro currency.

British economic secretary to the treasury, Patricia Hewitt, said that London remains the hub of economic activity in Europe, competing with other leading financial centres of the world including New York and Tokyo. "We will offer best possible climate for the investors and borrowers from India," she said.

Participating in a discussion on "London and the Euro" organised by the Bombay Chamber of Commerce and Industry and the British Deputy High Commission in Bombay on Friday, she said that the United Kingdom has taken a decision not to join now because the British economy is not converged with European economies.

"Our priority is to deliver a stable economic environment to allow business and investment to flourish," she said. "This would not be served by joining before we were certain the UK economy could live with common European interest rates."

A lot of public debate and preparedness on the government's part needs to be required before actually adopting the euro, she said, adding, however, the country is not left behind as London acts as a facilitator of the new currency, which came into force on January 1, 1999.

Hewitt said, "For our part, the Tony Blair government's policy on membership of single currency is clear -- prepare and then decide. If the single currency is successful and the economic benefits to the UK from joining are clear and unambiguous, then Britain should be part of it."

She said that the euro will be a major currency for financing, with significant depth and liquidity. "Already we have seen figures showing that since its launch, the euro has been a currency of choice for half of all new international bond issues. The market indications are that 90 per cent of this euro-dominated business has gone through London."

Hewitt said that the repercussions of this historic step will be felt, not just by the countries which have chosen to join economic or monetary union, but throughout the rest of Europe, and indeed across the globe.

UNI

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