City is sterling place to do business, says Greenspan (HELL NO TO THE EURO)

The Daily Telegraph ^ | September 26, 2002 | George Trefgarne

[MadIvan]

Alan Greenspan, chairman of the United States Federal Reserve and the world's most influential central banker, joined forces with Gordon Brown yesterday to deliver a powerful hint that Britain should stay outside the euro.

Mr Greenspan said that the City was thriving and was a "sterling place" to do business. "London has stayed on top despite the emergence of the euro," he said. Although there were signs of increased activity in Frankfurt, it was still a much less important financial centre than London.

Mr Greenspan also congratulated Mr Brown on the independent Bank of England, saying it "projects a nearly mythical presence". If Britain joined the euro, the Bank of England would lose most of its powers - including the setting of interest rates - to the European Central Bank.

Mr Greenspan is notorious for speaking cryptically and, yesterday, one of his officials said: "I won't elaborate on what the chairman said. I've learnt from experience I shouldn't do that."

However, those who are campaigning to keep Britain outside the euro were delighted. "Alan Greenspan is right," said George Eustice of the No campaign. "The City is thriving outside the euro but giving up the pound would undermine the favourable tax and regulatory framework which has made London a success."

But Britain in Europe, a pro-euro group, said: "Becoming part of the euro would strengthen our position because we would be able to use our superior skills inside what will soon be the world's biggest financial marketplace."

Mr Greenspan, 73, is in Britain to accept an honorary knighthood from the Queen at Balmoral today for his services to the world economy. He began his visit by opening the newly refurbished Treasury building in Whitehall.

Until now, it was unknown how close Mr Brown and his staff are to Mr Greenspan. Yesterday, Mr Brown described him as "a good friend" and "a great American, America's greatest central banker, not just of our generation but of all time, and one of the world's most esteemed statesmen".

He said Mr Greenspan had secretly helped him plan to make the Bank of England independent. Before the 1997 election, Mr Brown and his economic adviser, Ed Balls, visited Mr Greenspan several times.

In 1997, when the dotcom share bubble started to inflate, Mr Greenspan warned of the dangers of "irrational exuberance". Mr Brown joked yesterday that his presence filled him with "exuberance, rational exuberance".

The closeness of their relationship gives Mr Greenspan's words added credence as Mr Brown continues to keep everyone guessing about his true views on the euro. As the most popular Chancellor of the post-war era, his intervention in the debate could prove decisive.

[MadIvan]

The grapevine says that Gordo doesn't want the Euro, partially because he regards the monetary policies of the European Central Bank with disdain, and partially because the euro would lessen his authority. I'm glad he was able to recruit Greenspan to assist in building up the opposition.

Regards, Ivan

[MadIvan]

Bump!

[Happygal]

Hate to break it to ye...but as much as you oppose and despise the Euro..it's coming to git ye! ;-)

[MadIvan]

Hate to break it to ye...but as much as you oppose and despise the Euro..it's coming to git ye! ;-)

The Euro may have broken through the Celtic gleam of murder, but it won't breach English stubbornness, dear. ;)

Best Regards, Ivan

[Happygal]

We'll see ;-)

[MadIvan]

We'll see ;-)

Worse comes to worse, we can always turn to Mr. Tickle. ;)

Best Regards, Ivan