Exchange Rate Mechanism (Hansard, 9 January 1996)

§ Mr. Austin Mitchell
To ask the Prime Minister (1) if he will make a statement on the prospect for an exchange rate mechanism for those EEC members who do not join the single currency; [7552]
(2) what restraints were proposed by the advocates of monetary union at the Madrid summit on the freedom of action of those countries which do not join it. [7653]

§ The Prime Minister
The European Council agreed at Madrid that the Ecofin Council, together with, in their respective fields of competence, the Commission and the European Monetary Institute, will study the range of issues raised by the fact that some countries might not initially participate in the Euro area. In particular, the study should cover those issues related to monetary stability.

§ Mr. Mitchell
To ask the Prime Minister to what extent progress to monetary union requires Britain to rejoin the ERM(a) as a condition for fulfilling the preliminary stages of EMU before giving notice to join or otherwise and (b) as a condition of staying out; and if he will make a statement. [7712]

§ The Prime Minister
Protocol No. 11, annexed to the EC treaty, means that the United Kingdom shall not be obliged or committed to move to the third stage of economic union without a separate decision to do so by the Government and Parliament.
It will be for the Council, meeting as Heads of State or Government in 1998, to decide pursuant to the provisions of the EC treaty which member states fulfil the necessary conditions for the adoption of the single currency. It is not possible to say now precisely how the exchange rate criterion will be interpreted, given the changes in the way the ERM has operated since the treaty was agreed.
The Madrid European Council requested that the Ecofin Council, together with, in their respective fields of competence, the Commission and the European Monetary Institute, will study the range of issues raised by the fact that some countries might not initially participate in the Euro area. In particular, the study should cover those issues related to monetary stability.