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To: long-gone who wrote (29200)	2/28/1999 10:15:00 PM
From: goldsnow	Respond to of 116894

Euro is 'doomed to failure' The New Europe think-tank will campaign against the euro Leading British politicans have warned the Government against rushing to sign up for the euro. Former British foreign secretary Lord David Owen said: "The basic concept is flawed. I think that it is a straitjacket which if we joined we would find an intolerable constraint." He was speaking ahead of the launch of his "New Europe" think-tank which will campaign against Britain joining Europe's single currency. The all-party group includes Lord Prior, former cabinet minister under premier Margaret Thatcher, former Labour Chancellor of the Exchequer, Dennis Healey, former Barclays Bank chief executive Martin Taylor and City economist Roger Bootle. Lord Owen said: "It's not a party, it's not a membership organisation. We hope people will come and support us. "It is mainly to try and produce serious factual information about Europe as it is, Europe as it will be when it becomes over 26 countries and what euroland really does mean, what it means to not have control over your own currency, the exchange rate, your own interest rates. "I think people just need to be very aware that this is a massive change for Britain. "It isn't a minor political question, it's not even just an economic question, it has a lot of political baggage in its trail," he told BBC 1's Breakfast with Frost. Lord Owen who split from the Labour party and helped found the Social Democratic party in the early 1980s, stressed he was a lifelong supporter of the European Union but that signing up to the euro was a step too far. Lord Healey said the European single currency was likely to crash before Prime Minister Tony Blair even has a chance to decide whether Britain should join. "An economic recession will require the existing members of European Monetary Union (EMU) to have different interest rates and exchange rates and I myself believe that EMU will probably break down before Blair is called on to take a decision whether or not Britain should join," he added. Last week Prime Minister Tony Blair made his strongest statement of support to date for Britain signing up to the euro early next century, subject to a number of economic tests and a referendum. Euro 'key to prosperity' Giles Radice, chairman of the European Movement and Labour MP for Durham North, said: "People who believe that Britain can say no to the single currency, but remain a leading player in Europe are deluding themselves. "The choice is between a Britain inside EMU, leading in Europe, and economically prosperous, or a Britain outside EMU losing out economically marginalised and without influence in Europe. "The only choice for pro-Europeans will be to vote to join the single currency. To reject the euro will be to consign Britain to, at best, second class status in Europe." news.bbc.co.uk

To: long-gone who wrote (29200)	2/28/1999 10:25:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116894

Commodities carnage slows By Stephen Wyatt For the first time in almost two years, Australian commodity prices have stopped their suicide dive. They are now tracking sidewise and a number of analysts are suggesting the worst may be over for commodities. If so, despite last week's strong sell-off, the commodity sensitive Australian dollar could be triggered higher to retest US65¢ and eventually US70¢, said Mr Rob Henderson, chief economist in Sydney with Dresdner Kleinwort Benson. Australian commodity prices, measured by the Dresdner Commodity Price index in currency neutral Special Drawing Rights (SDR) terms, slumped dramatically over the period September 1997 to September 1998 as Asia's economic collapse sent markets into a tailspin. Commodities lost 25 per cent of their value. But since September last year, Australian commodity prices have traded sideways, albeit near historically low levels. This could be an early indication that these markets are now bottoming. Some commodity consumers are thinking this way. A major German car manufacturer and client of Dresdner Bank in Germany has just locked in aluminium prices for five years ahead, Mr Henderson said. The Dresdner commodity price index, like the Reserve Bank of Australia, Commonwealth Bank and ABARE commodity price indices, measures the prices of Australia's major commodity exports and weights these according to their contribution to total exports. These indices are more relevant measures of Australian commodity prices than the widely followed Commodity Research Bureau index of 17 US commodity futures markets. They also have a much stronger correlation with movements in the Australia-US dollar exchange rate. While Australian commodity indexes in SDR terms are flattening and showing early signs of bottoming, the CRB index collapsed on Friday to its lowest level for 24 years on the back of weak grains, sugar, cotton and oil prices. But no one, except perhaps some US hedge funds who have been keen buyers of the Australian dollar over the past month on the belief that non-Japan Asia is beginning to recover, is actually bullish commodities -- yet. "We doubt [that commodities have bottomed] . . . and technical indicators point to further weakness to go along with the negative global macro-economic fundamentals that have pressured commodities for months," said Mr Bill O'Neill, futures strategist with Merrill Lynch in New York. "At this juncture, we are still looking at the fourth quarter or first quarter 2000 for a potential bottoming in commodity prices, but even that may be a bit optimistic," he said. The key to a commodities recovery is a recovery in global demand. While the US economy continues to boom, ongoing problems in Asia, Brazil and other emerging markets along with evidence of slowing growth in Europe point to slack demand for both agricultural and industrial commodities for the next six months, Mr O'Neill said. But there are a few bright spots appearing in Asia, including noticeable improvement in South Korea and Thailand. Japan, however, remains mired in recession. Australia's exports to Japan and South Korea have recently recovered after dropping precipitously through to mid-1998 and South Korean industrial production rose by 4.7 per cent for the calendar year 1998 against 1997. In the base metals sector "there is a growing view that we could be nearing the bottom", said Mr Jim Lennon, London-based commodities strategist for the Macquarie Bank group. This was emanating from possible supply cuts in copper mine and smelter production in the US (Highland Valley and across the south west) and South America and growing optimism about US economic growth, he said. The giant Chilean producer Codelco, announced plans last week to cut costs from US45¢ a pound to US40¢/lb by reducing production at its highest cost mines, especially the Andina Mine. There are also rumours that, in the US south-west, a number of mines and smelters could close, including BHP's Robinson and San Manuel mines and its San Manuel smelter. The prospect of a large draw-down in Singapore London Metal Exchange stocks due to increased demand from China was also buoying sentiment, said Lennon. Consensus forecasts of 1999 US growth have picked up from around 2.3 per cent at the end of 1998 to around 3 per cent now and forecasts of world growth have risen from 1.4 per cent in December to over 1.6 per cent now. If correct and if Asia can muster a recovery, the worst is in for commodities. afr.com.au