BRITISH BUSINESS AND THE EURO By Ophelia Eglene Minda de Gunzburg Center for European Studies Harvard University 27 Kirkland Street at Cabot Way Cambridge, MA 02138 (617) 495-4303 x 259
[email protected] American Consortium on European Union Studies (ACES) EU Center of Excellence Washington, D.C. ACES Cases, No. 2008.2 Stephen J. Silvia, American University, editor Copies of this case and others can be downloaded free of charge at the ACES website: http://transatlantic.sais-jhu.edu/ACES/ACES_Cases Abstract During the Maastricht Treaty negotiations, the United Kingdom obtained an opt- out option on Economic and Monetary Union (EMU). When Tony Blair came to power, he promised there would be a referendum on the euro if the government decided it was in the national interest to join. Many believed Tony Blair intended to call and try to win a referendum on the euro. Therefore, in the late 1990s, the debate over the euro raged in Britain, filling the pages of the tabloids and the minds of many Britons. In this paper based on empirical research conducted in London in 2005-06, I investigate whether the business sector had a clear preference on the issue of British membership in the EMU and tried to influence the government‟s decision. I use Jeffry Frieden‟s model of interest group preferences regarding exchange-rate policies to develop hypotheses regarding the position of the business sector on the euro. Research findings reveal that the business sector was divided on the issue of euro membership exactly as Frieden‟s model predicts.