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Euro doesn't need Britain, ECB's Wellink says

Published 01/14/2009, 10:35 AM
Updated 01/14/2009, 10:40 AM

By Marc Jones

FRANKFURT, Jan 14 (Reuters) - The euro zone doesn't need Britain and decision makers in the bloc are reluctant to cooperate with the UK, which has refused to adopt the currency, according to European Central Bank policymaker Nout Wellink.

"In the (ECB) Governing Council we almost never discuss the UK. We more often discuss China, the U.S., Japan," said Wellink, who is one of the Council's longest-serving members.

"There is a certain resistance in the system to having cooperation with the UK. The view is: You do not belong to our group. If you're not a member, do not seek to become involved," Wellink said in an interview for a soon-to-be-published book.

ECB President Jean-Claude Trichet said recently that the UK was welcome to join the euro at any point as long as its economy fitted the entry criteria.

But Wellink, who heads the Dutch national bank, said UK membership of Economic and Monetary Union (EMU) was unnecessary.

"In the beginning, I was in favour of the UK being a member of EMU. I thought we should need the support of the Anglo-Saxon world, for instance to offset the Germans' tendencies towards bureaucracy," he said, according to an advance copy of the book, "The Euro: Politics of the New Global Currency".

"However, I have now changed my mind. I do not think that UK membership is necessary," he added in the interview with the book's author, David Marsh.

Britain negotiated an opt out from joining the euro in 1991. Public support for adopting the common currency remains low and memories linger of the pound's painful ejection from the Exchange Rate Mechanism in 1992.

MINUTES

Euro zone policymakers interviewed for the book also said there was little reason for the Governing Council not to hold votes on its decisions.

ECB decisions are generally made by consensus but Irish central bank governor John Hurley said: "It might be expected that the ECB Governing Council would move more in the direction of voting over time."

Wellink agreed. "The reason why there have been no votes up to now (on monetary policy at the ECB) has been partly to create a feeling of consensus and collegiality during the early years. There is now less reason to be sensitive on that issue."

Jean-Claude Juncker, who heads the Eurogroup of euro zone finance ministers, also said he expected a switch to more formal voting and that the ECB would eventually bow to pressure for more transparency by publishing the minutes of its meetings.

Major central banks such as the U.S. Federal Reserve, the Bank of England and the Bank of Japan all publish minutes. But the ECB does not, and some people say this is because policymakers do not want to be seen as taking action against the perceived interests of their own countries.

"I believe that the ECB Governing Council will publish minutes of its fortnightly meetings in the next two to three years as part of improved democratic accountability, and that they will also put monetary policy decisions such as changes in interest rates to the vote," Juncker was quoted as saying.

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