CBI: 50 YEARS OF BUSINESS INNOVATION | BRITAIN AND BEYOND
the UK government that was more lukewarm about the rest of Europe rather than the other way round. The Conservative administration of Margaret Thatcher disliked what it saw as a push towards a federal Europe and a single currency under Jacques Delors, the socialist French politician who was President of the European Commission. While she was praised for negotiating a permanent rebate from the EU agricultural budget, she opened up splits within her party in 1988 when she used a speech in Bruges to reject “a European super-state exercising a new dominance from Brussels”. After Mrs Thatcher’s removal from power in 1990, the UK moved further down the
path towards closer integration with the rest of Europe. In 1992 Prime Minister John Major signed the Maastricht Treaty, which laid the groundwork for the creation of the euro, added the areas of justice and foreign policy, and introduced closer integration on employment and social issues. The treaty also introduced the notion of European citizenship, giving citizens of EU countries the right to live in any other EU country and vote in its elections. However, the UK secured an opt-out from the single currency and from the Social Chapter. Again the CBI made clear its members were in no doubt that the UK’s long-term interest lay in ratification. The incoming Labour government of Tony Blair signed up the UK to the Social Chapter and initially set out a path towards adoption of the euro, which was due to become the common currency of Europe in 1999 but without the UK, Sweden or Denmark as members. The CBI had declared its support for joining economic and monetary union (EMU), as it was known then, but only when the economic conditions were right. In July 1999 it backed UK entry under key conditions without a specific date, which it said was a “compromise between the strongly held views of different members”. However, the then Chancellor Gordon Brown was opposed and,
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after the Treasury carried out a detailed analysis showing that the disadvantages from joining at that stage outweighed the benefits, the idea was shelved.
SECOND REFERENDUM? The issue fell off the domestic political agenda in the 2000s and the euro debt crisis has probably put paid to the idea of the UK joining in the foreseeable future. The eurozone crisis forced Cyprus, Greece, Ireland, Portugal and Spain to seek financial bailouts. The crisis also exposed failures in the economic governance of the EU, while the absence of a common banking system and a fiscal union had left member states vulnerable to swings in financial markets. The scale of the crisis has led to a rise
in euroscepticism among both politicians and voters in the UK, marked most clearly by the large vote for the UK Independence Party, which campaigned for withdrawal from the EU, in the 2014 European elections. Another factor behind UKIP’s success was the sharp rise in the number of people coming to the UK from eight eastern European and two Mediterranean countries that joined the EU on 1 May 2004. »
Left: The 1992 Maastricht Treaty. Opposite: The Eurozone crash causes misery for Greek pensioners
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