Euro would have ‘neutral’ effect on UK employment

The decision on whether the UK joins the euro is likely to have less impact
on jobs and employers in this country than the draft European constitution.

John Philpott, chief economist for the Chartered Institute of Personnel and
Development (CIPD), believes that in the medium- to long-term, joining the euro
would have a fairly neutral impact on employers and jobs in the UK.

Philpott sees the draft EU constitution, which could give increased scope
for unions to exercise power in areas such as union recognition, collective
bargaining and strike action, as potentially having a greater impact on UK
employers than the euro.

Philpott was speaking last week as the business community waited for
Chancellor Gordon Brown’s verdict over whether the five economic tests on UK
entry to the euro had been passed.

The tests include whether joining the euro would adversely affect employment
and growth, and business and workforce flexibility.

Philpott believes that if the UK is to join the euro without employ-ment
stability suffering, the European Central Bank will need to be reformed to
allow more flexibility over interest rates.

Philpott does not think the euro is responsible for the poor performance of
the eurozone compared to the UK, but blames underlying structural problems.

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