THE Japanese car group Toyota has warned that future levels of investment in Britain could be affected if the UK stayed outside the European Monetary Union.
"Regardless on whether Britain joins [the EMU], I have a feeling that it would be excessive if we made additional [investments] in Britain," Toyota's president, Mr Hiroshi Okuda, said in Tokyo.
Asked if Toyota's future strategy in Britain would change depending on whether the country joins the EMU, Mr Okuda said: "It will change."
Toyota last year built 117,000 cars at its plant at Burnaston in Derbyshire, and is considering how rapidly to expand production there.
Meanwhile, the Minister for Finance has reiterated that the pound's strength would not be a reason for Ireland failing to enter monetary union.
Speaking to student members of the Labour Party in Trinity College, Dublin, yesterday, Mr Quinn said the pound's strength within the Exchange Rate Mechanism has not been raised "either formally or informally" at Brussels.
There has been concern recently that the pound's strength against many European currencies could bee used to stop Ireland joining the single currency. The exchange rate clause states that currencies must be broadly stable in the run up to monetary union.
While the volatility of the pound is unwelcome and "unhelpful", according to Mr Quinn, he did not see how it could be made into an issue which would disqualify Ireland from joining monetary union.
"We are in line with all the other criteria so that I cannot see how it could be an issue, although we would prefer it if the pound remained more stable within the ERM," Mr Quinn said.
Many Irish exporters to Germany and other European countries have been hard pressed after the recent surge in the pound, which is trading at almost 10 per cent above the weakest currency in the block. However, the Minister noted that companies generally only "squeal" when currency movements go against them and keep quiet when the movement works in their favour.
He repeated his theory that if the Bank of England were independent, there would not be such a premium on sterling. That would take a lot of the speculative heat out of the currency," he said.
Speaking on the Progressive Democrats' assertion that Ireland should not enter monetary union without Britain, Mr Quinn stressed it was not a matter of deciding to jump into the river from the bank but rather of deciding to clamber out.
"If we took that decision, the market reaction to us stating that we felt we could not go it alone without the UK could be quite draconian," he said.
On the debt criteria for joining, Mr Quinn said he expected debt to fall to under 70 per cent of gross domestic product this year for the first time, from 73 per cent last year.
The Minister also called for a debate on tax entitlements for people who live together as a couple but who are not married. "There has to be a debate on whether the tax code should reflect the status of marriage," he said in response to a question about the treatment of gay couples under inheritance tax legislation.
