UK: BROWN CONFIRMS BRITAIN WILL NOT JOIN EMU THIS PARLIAMENT (2)

(20 Oct 1997) English/Nat Britain's Finance minister Gordon Brown confirmed on Monday that the U-K is not likely to participate in the first round of a single European currency in 1999. As British financiers braced for market reaction to the government's decision, Brown said Britain would need to witness some period of stability in the common currency after its inception before joining. Initial fallout from the decision was seen as Britain's FTSE 100 index of leading shares dropped more than 100 points. British stock traders waited anxiously for the speech by Finance Minister Gordon Brown at the London Stock Exchange on Monday. Market watchers were made skitterish over the weekend by reports that the government was preparing to announce that Britain would not join Economic and Monetary Union (EMU) during the tenure of this parliament. The finance minister confirmed the reports in his speech, telling his audience his Labour government would wait to take careful consideration of the risks before signing up with the rest of Europe. Even before Brown had finished making his remarks, stock prices listed on the new computer trading board behind him reacted immediately, with the dozens of stocks turning to red to signify a drop. SOUNDBITE: (English) "The government's determination is not only to have a successful presidency, but also proper and orderly decisions about E-M-U under the treaty. And of course we have also set up the business advisory task force, which will help industry and business prepare whether we are in or out. There is a need for a period of stability, and the government is determined we will not fall into the trap, which the conservatives fell into over the E-R-M (Exchange Rate Mechanism) by implying in so doing it could join in the next day or next month allowing that possibility to dominate every waking hour and every week of the government. And then eventually being forced to make the decision for short-term political reasons, not as it should have been and as all decisions should be made on the basis of the long-term economic interests of the country. I've said before and consistently that it is unlikely that Britain will join the first wave." SUPER CAPTION: Gordon Brown, Chancellor of the Exchequer Brown was visiting the exchange to unveil a new electronic trading system intended to make the stock exchange more efficient and advanced. The new system was clearly upstaged by Brown's announcement on the E-M-U and fears that the exchange would witness more turbulent trading in reaction to his speech. However, some trading analysts believe the cautious government policy is a good move in order to avert a more massive panic within the economy. SOUNDBITE: (English) "This is a trial run for what were to happen if E-M-U itself were ever to be delayed. And yes, there's been a knee jerk negative reaction in the U-K this morning, but it hasn't been a disaster, it hasn't been a massive sell off, there's some red. And again, I think the way it's being handled should give everyone a degree of reassurance that the politicians are being very, very careful not to upset markets too much. They're taking it a step at a time and that's the right way to do it. SUPER CAPTION: Mark Fox, European strategist, Lehman Brothers The fall of British shares after Monday's announcement comes hard on the heels of traders marking the 10th anniversary of the 1987 world stock market crash. Find out more about AP Archive: http://www.aparchive.com/HowWeWork Twitter:   / ap_archive   Facebook:   / aparchives   ​​ Instagram:   / apnews   You can license this story through AP Archive: http://www.aparchive.com/metadata/you...