The UK Government has stated that it will recommend EMU entry when the economic conditions are met. It has announced policy changes to align economic conditions in the UK to those in the euro zone.

The Chancellor announced no change to the UK's position in the 2004 Budget. He ruled out a further assessment of progress against the economic tests that year but was due to revisit the issue in 2005. In fact not much seems to have happened in policy terms since the referendum bill was published in on 10th December 2003. The referendum question was proposed to be "Are you in favour of the UK adopting the euro as its currency? "

Ten new countries joined the EU on 1st May 2004. The accession treaty obliges them all, sooner or later, to join the single currency, but the timing is left to the individual states; see EMU expansion for further details. Meanwhile, in the UK, public sector preparations have advanced, while the private sector has spent its money carefully, if at all.

The promised referendum on the EU constitution would have been a critical test of UK public attitudes to the European project, but now that France and the Netherlands have rejected the proposals, is unlikely to take place any time soon. With some sceptics in Italy, and some economists elsewhere, beginning to question the whole euro project, this issue is now on the back burner for most UK firms.

EMU is a business issue with an IT impact. It affects every financial process, transaction and information store.

From the referendum, the current planning puts the locking of exchange rates and the Wholesale Transition only eight months away. Businesses and other organisations will have little time from the Referendum to prepare for the Retail Transition. Careful planning will be crucial.