LONDON, May 18: Britain could be allowed to join the euro without raising taxes or cutting public spending to improve its budgetary balance, the chairman of the Eurogroup of euro zone finance ministers was quoted as saying on Saturday.
The Financial Times newspaper said Rodrigo Rato told it in an interview that Britain’s need for public investment and low government debt should be factors when its compliance with EU rules was assessed.
He added that the long-term health of British public finances was “not an issue”.
British finance minister Gordon Brown unveiled a budget last month whose cornerstone was increased investment in the ailing national health service.
He predicted government borrowing of 18 billion pounds ($26.29 billion) in 2006-7, whereas the EU’s stability pact called for member states to move to broadly balanced budgets over the medium term.
NEW YORK: The yen moved sharply higher Friday after the Japanese government said the country’s economic slump may be over, while the euro climbed to the 92 US cent level for the first time since October.
After rising as high as $0.9211 in European trade, the euro traded at $0.9200 from its level of 0.9116 late Thursday in New York.
The dollar was going for 125.90 yen from 128.05 Thursday, a sharp gain for the Japanese currency after an upbeat outlook from Tokyo.
The Japanese Cabinet Office upgraded its overall assessment of the economy for May, the third consecutive month of improvement, and said the economy has bottomed out although it remains in a difficult situation.
That news was followed by comments by Ministry of Finance official Masahiro Kawai in London that Japan has no intention of driving the yen artificially lower.
The yen’s sharp gains were unchecked by comments from the Ministry of Finance vice minister for international affairs Haruhiko Kuroda, who was quoted as saying that Japan would not need to change its yen policy. Kurdoa also said that Japan would take action on the yen if needed.
The dollar, which is seen by analysts as on a downward trend from recent higher, failed to get a lift from stronger-than-expected US consumer confidence data.
The University of Michigan consumer sentiment index rose to 96.0 in May from 93.0 in the final April reading. Wall Street economists had forecast the index to fall to 92.7 in May.
In this bearish environment, good news has no impact, Steve Barrow, currency strategist at Bear Sterns said.
The euro zone story is not particularly good at the moment ... but the US has been having a good run for a long time, he said.
In late New York trade, the dollar was worth 1.5802 Swiss francs from 1.5970 Thursday.
The pound was at $1.4580 from 1.4558 on Thursday.—Rueters/AFP