Reporters
Members will recall that, earlier this year, we decided that some members of the committee would act as reporters on specific work to try to take our agenda forward. Unfortunately, two of the three members from whom we wanted to hear have been delayed; I do not know whether that is because we were due to hear from them today. One of the reporters, Bruce Crawford, is here and I am sure that we all look forward to the continuation of the debate on the euro. Bruce, could you give us an update on where we are with the investigation?
Yes, but do not expect any singing and dancing from me.
When the committee last discussed the work of the euro reporter, it was decided that I would complete certain sections of work before halting and allowing the committee to continue with the work jointly. The reason for that decision was primarily the difficulty of applying the resources that would allow me to finish the report.
I was asked to consider six areas, the first of which was the background to and rationale for the requirements for European monetary union and what has brought us to this stage of European integration. The second was a review of the euro zone, the Maastricht criteria and how Scotland and the United Kingdom sit in comparison with the convergence criteria. The third was an examination of the advantages and disadvantages of the economic and monetary union and its potential effects on the social and economic development of the European Union. The fourth was how Scotland is progressing in terms of preparation for entry, looking at the different sectors. The fifth was the potential impact on government, public sector and business decision making. The sixth was consideration of other EU member states, such as Ireland and Denmark, that have comparable population size and peripheral locations.
The first three have been completed, apart from the effects on social and economic development, which is part of the third area. Stephen Imrie has the papers on the background and rationale, and the review of the euro zone and the Maastricht criteria. I am beginning to look at the objectives and disadvantages of the EMU.
I have concerns about some of the statistical data that I used in the report, as they are from June and things have moved on since then, particularly the UK's and Scotland's position in relation to the convergence criteria. I am also worried that because the draft was written earlier in the summer, it does not contain any examination of the one-policy-fits-all argument. That is particularly relevant because of the difficulties that are beginning to be experienced between the German economy, which needs lower interest rates for growth, and the Irish economy, which needs higher interest rates to cool it down. I have not had time to look at that, but I have produced the first three sections of the report.
I have suggested to Stephen Imrie that the best way to progress would be for the papers to go to all committee members so that they can give their views and have an input. Stephen has agreed to look after that process, which, if we agree, can begin now.
The fourth piece of work contains a summary of the consultation meetings that have been undertaken. We have spoken to Business for Sterling, the Commercial and General Union, the Royal Bank of Scotland, Standard Life, the Bank of Scotland, the Scottish Food and Drink Federation and the Scottish Council for Development and Industry. The SCDI is about to publish the findings of a wide-ranging survey of Scottish businesses that should be relevant to how the committee might want to view the potential impact on business of joining the euro zone. We had hoped to take evidence from other organisations, but were unable to because we could not have the assistance of a consultant. Pauline Archibald has prepared a note on the discussions that took place and the main points that were made; I will add that note to the material to be circulated.
I hope that I have explained where we are at. Once we have members' responses, we will have to come to some conclusions about the advantages and disadvantages of EMU. I have my own views, but I have not included them at this stage because it is important to surf the views of committee members first to ensure that our report has at least a solid majority behind it.
Thank you for a good overview. Are there comments and questions?
Bruce Crawford mentioned including other countries, such as Ireland, in his report.
Had we carried out the initial remit that would have happened, but because of the decision that was taken towards the end of June, I did not have the resources for a consultant to help us. As a result, the final section of the report—along with the fourth and fifth sections—will have to be a joint view from the committee.
I am curious to know whether countries keep their currency in parallel when the euro begins. Can that be done?
That is being done, but only until a certain date. Once 1 January or 1 June 2002 is reached—forgive me; I cannot remember the specific date—countries will have to fly without dual currency.
Unless the Danes vote no, in which case that will have to be amended at the end of the presidency, so perhaps it would not be a good idea to spend much time going into that now.
I think you are right, Margo.
It is difficult to comment further until we see Bruce Crawford's drafts, which we look forward to reading. We will then be able to decide whether any information is missing.
I emphasise that the initial drafts are early thoughts. I need members' thoughts before we can move to the next stage.
Can we agree to circulate the drafts as private papers? I stress that they will be private at this stage as they are for further consultation and debate. I hope that members will treat the papers as such, as they have no status as committee comment at this stage but are there to help us to progress the discussion. Stephen Imrie will make the appropriate arrangements and we will return to the issue.
We will leave the other two reports for the moment.