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X. Study the article in several groups. Choose one of the situations and brainstorm the points.
1. Denmark restricts out-of-town shopping, so retailers have set up shop on the Swedish side.
2. States face similar pressures from the explosive growth of single-person households and urban sprawl.
3. Some members have been wary of extending the EU's reach into national governments' territory.
4. The UK planning minister has held meetings with doubters such as Spain and Portugal.
5. The document charts the growth of "gateway" cities to the EU, such as Lisbon, and "world cities" such as London and Paris.
XI. Meet as one group. One of you should lead the meeting. Decide how the problems of Gateway cities can be minimized.
Text 2
Sustainable Convergence or Resistance?
The government says that Britain cannot consider joining the European single currency until it has passed five economic tests. But have the tests already been met?
It is an economic argument set to a transparently political timetable. The government has long insisted that it regards the question of whether Britain should join the single European currency as above all an economic issue. Gordon Brown has set five economic tests to gauge whether Britain is ready to take the plunge. But he also insists that he will not decide whether Britain has met these tests until after the next election.
The reasoning is plain. Polls show that a large majority of British people do not want to join the euro. The Labour Party is desperate for the single currency not to become an issue in the next election. So Mr. Brown is trying to kick the issue into touch, until the election is safely won. In his Mansion House speech, which the chancellor was making as The Economist went to press, he was expected to stick firmly to this line.
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Increasingly, however, the government's strategy is under strain. It is hard to imagine that the Labour Party will get through an election campaign, without revealing whether it intends to call a referendum on the abolition of the national currency shortly afterwards. Some of Mr. Brown's cabinet colleagues in particular Robin Cook, Stephen Byers and Peter Mandelson - clearly want the government to take a more robustly pro-euro line now.
The past fortnight has seen a steady stream of interventions, from the pro- and anti-euro camps, as they try to force the chancellor off the fence. This week, the Britain in Europe campaign marshalled a posse of international economists to present the case for joining the single currency. The anti-euro Business for Sterling pressure group rustled up former Treasury "wise men" (economic advisers) to warn that entry could imperil hard-won economic stability.
So how far is Britain to meeting the five tests Mr. Brown first set out in October 1997? The first and most important is whether the economy can demonstrate sustainable convergence with the euro zone. Next, the Treasury wants to be sure that the economy is flexible enough to cope with economic shocks once interest rates are set in Frankfurt. It will also assess the impact of joining the euro on investment, the City and employment. Recent debate has focused on three of the tests: convergence, investment and the City.
When he first posed his tests, he concluded that the economic cycles of Britain and the euro zone were too divergent to allow entry into monetary union in this parliament. However, this week's figures for consumer price inflation were ammunition for those arguing that the economy is converging on the euro area. On the index of prices used within the European Union to measure inflation, Britain's annual rate nudged down in May to a new low of 0.5%. Last October, British inflation fell below the euro zone's and since the start of the year, it has been the lowest of any EU country.
These latest inflation figures appeared to validate the view of the Organization for Economic Co-operation and Development, that Britain is moving closer to the economic centre of gravity of the euro area than some of its current members. Britain's short-term interest rates, too, are now much nearer to those in the euro area than was the case when Mr. Brown ruled out early entry. Then there was a differential of almost 4 percentage points between official rates in Britain and Germany. Now that has narrowed to less than 2 percentage points.
That differential could close further if the Bank of England continues to hold interest rates at 6% while the European Central Bank further tightens monetary policy. The pressure for higher rates in Britain eased this week thanks to signs of pay moderation in the labour market. Average earnings growth in the latest three months fell from an annual rate of 5.7% to 5.1%, the biggest slowdown since 1993 - and approaching the 4.5% rate the Bank believes is compatible with meeting its inflation target.
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Text-study
I. Learn the following words
gauge - , , ,
plunge - , ,
robust - , ; ;
marshal
divergent -
compatible - (compatible with) ,
II. Complete the sentences with suitable words from the box.
| sustainable convergence with the euro zone; economic shocks; economic cycles; inflation target; to pave the way; exchange-rate risk |
1. The treasury wants to be sure that the economy is flexible enough to cope with .
2. A very important fact is whether the economy can demonstrate with the euro zone.
3. The of Britain and the euro zone were too divergent to allow entry into monetary union in the Parliament.
4. The Bank believes its compatible with meeting its .
5. Exchange-rate uncertainty will hit inward investment from foreign companies which can now invest without .
6. The government will have for entry by negotiating with its European partners.
III. Answer the following questions
1. How many tests does Britain have to meet to join the European single currency?
2. How many of them are considered in the text?
3. What are the convergence criteria a country must meet to enter the euro zone?
4. What factor could complicate Britain's joining the euro?
5. How can the exchange-rate uncertainty hit inward investment from foreign companies?
6. Will the City's competitiveness be damaged by Britains joining the euro?
7.Why do you think the author says that Britain's joining the euro is largely a political issue?
IV. Give Russian equivalents for the following words and phrases used in the text:
an economic issue; a pro-euro line; entry into monetary union; consumer price inflation; the index of prices used within the European Union; short-term interest rates; a differential; pay moderation in the labour market; the output gap; fluctuations in the value of the pound;
a source of instability; exchange-rate uncertainty; inward investment;
the City's competitiveness; a major recession in either Britain or Europe; an entry rate into the euro.
V. Translate into English.
1. , .
2. , , , .
3. : , .
4. .
5. .
6. , , .
7. , , , .
VI. Fill in the blanks in the text with suitable prepositions.
The Treasury insists that convergence must be "sustainable and durable". Sceptics euro membership compare the recent alignment to ships passing in the night. In evidence to the Treasury select committee this week, Roger Bootle, an economist, described convergence as "superficial" and asked whether British inflation would be the lowest in the EU if the base rate were 4.25%, as in the euro zone. The dangers Britain adopting a "one size fits all" monetary policy were highlighted this week as Irish inflation rose further 5%.
The "killer fact" in the convergence story remains the current strength and past volatility the pound. This has both stoked up the campaign entry - and made it more difficult to achieve without a clear lead from the government. A central argument this week's broadside Britain in Europe, "The case for the euro", is that Britain will suffer increasingly fluctuations in the value the pound. One of the authors, Willem Buiter, a former member of the Bank of England Monetary Policy Committee, said that the pound is a source of instability rather than a buffer against it: "sterling is a rabbit squeezed between two elephants," the dollar and the euro.
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VII. Insert the articles where necessary.
Exchange-rate uncertainty would hit inward investment from foreign companies which can now invest without exchange-rate risk in euro zone. So far the evidence is mixed. speech this week from the governor of Bank of England robustly defended the City's performance to date outside the euro zone. "There were those who argued that City would suffer if UK failed to join from the outset," said Eddie George: "That clearly has not so far happened - quite reverse." He saw no reason to suppose that Britain's position outside euro area would detract from the City's competitiveness in future.
survey of foreign banks by London Chamber of Commerce and Industry backed up governor's views on current impact of the euro. This found that British participation in the euro ranked 21st out of 23 factors influencing location. However, a third said Britain would have to join the euro to secure London's long-term future as international financial centre.
VIII. Explain the italicized grammar constructions in the following sentences.
1. The debate about the five economic tests increasingly suggests that they will be met when the chancellor decides that it is politically convenient for them to be met.
2. It is not that the tests are meaningless or unimportant. But they are vague. In the absence of a major recession in either Britain or Europe, it is likely that evidence can be marshaled on either side to suit the prejudices of whoever is making the case.
3. If Britain is to enter monetary union, it will have to do more than pass Gordon Brown's five tests.
4.The government will have to pave the way for entry by negotiating with its European partners over an acceptable exchange rate. It will have to influence expectations in the foreign exchange markets about an entry rate into the euro.
5. In this sense, the economy will only pass the tests if the government wills that result. And even if the economic tests are met, the government will have to win a referendum. It is highly unlikely that the Yes campaign will be able to avoid dealing with the political implications of euro membership. The decision whether or not to join the euro is ultimately political - whatever Mr. Brown would have us believe.
IX. Summarize the text, using the words and phrases given below:
to join the single European currency; to take the plunge; to set five economic tests; to pass the economic tests; to meet the economic tests; to reveal smth; to call a referendum on the abolition of the national currency; to present the case for smth; to imperil hard-won economic stability; to cope with economic shocks; to focus on smth; to validate smth; to rule out early entry; to tighten monetary policy; to secure Londons long-term future; to negotiate over an acceptable exchange-rate.
X. Study the text in several groups and try to find arguments to support the following point of view:
1. The latest inflation figures appeared to validate the view of the Organization for Economic Co-operation and Development.
2. Britain is moving much closer to the economic centre of gravity of the euro area than some of its current members.
3. The "killer fact" in the convergence story remains the current strength and past volatility of the pound.
4. The pound is a source of instability rather than a buffer against it: "sterling is a rabbit squeezed between two elephants", the dollar and the euro.
XI. Meet as one group. One of you should lead the meeting. Develop the following idea:
- If Britain is to enter monetary union, it will have to do more than to pass Gordon Brown's five tests.
Text 3
