[A-List] UK eurozone membership: economic weakness

["Michael Keaney" <michael.keaney@xxxxxx>]

Reliance on foreign investment exposes vulnerability
DAMIEN HENDERSON: Scotland
The Herald, 6 June 2003

ONE of the major differences between the British economy and those within
the eurozone is our greater reliance on foreign investment, which supports
two million British jobs and accounts for two-fifths of our manufacturing
investment.

The vagaries of this situation was painfully illustrated last week when
Ethicon, the medical supplier owned by US healthcare giant Johnson &
Johnson, announced the closure of its Edinburgh plant over the next two to
three years, with the loss of 850 jobs.

To add salt to the wounds of those now seeking alternative employment, the
profitable plant was closed because the company is seeking tighter margins
overseas.

Neil Ryding, vice-president of Ethicon's European operations, denied reports
that the outfit was relocating solely to Puerto Rico, stating that sites in
America, Brazil and Germany were being considered.

He said the decision to move followed a review of Ethicon's global
operations which sought to avoid duplication in different factories, adding:
"It is not about tax, low wages or the prevailing business conditions.

"The best way of eliminating duplication is to transfer the products to
other facilities around the world that already make similar products at a
higher volume on automated equipment."

So would joining the euro hamper or encourage greater investment? Mr Ryding
is sanguine about the prospect. Global multi-nationals like Johnson &
Johnson hedge against currency fluctuations, he said, so the UK's current
isolation from the eurozone is unlikely to cause a problem.

"My own view is that I just wish we had one global currency, because I spend
so much time travelling and changing currencies. I'm sure my PA would say
the same," he said.