Politicians must not use the current global economic uncertainty to back away from the necessary reforms

Digby Jones CBI

Uncertainty over euro adoption inevitably had "an impact on investment decisions", Mr Jones told BBC Radio 4's Today programme.

He was backed by John Monks, general secretary of the TUC, who said it was time to "face up" to the euro policy challenge.

Fresh stance

While the TUC has long advocated that Britain scrap the pound for the euro, Mr Jones' statement highlights a bolder stance by the CBI towards the issue.

Although the CBI took a strongly pro-euro tack under its former leadership, Mr Jones' reign has seen the group take a more neutral line, reflecting a divide in opinion amongst its members.

Mr Jones said a euro decision was needed to clarify Britain's position within the European Union, and its role in a much-needed reform programme.

He reinforced the point in a New Year message stressing the need for an EU shake-up to help states recover from a "deeply painful" economic slowdown.

The single market remained "seriously fragmented", Mr Jones said, urging politicians to meet pledges to make Europe's economy the world's most effective.

"Politicians must not use the current global economic uncertainty to back away from the necessary reforms," he said, while stressing the need to cut red tape.

"MEPs and European commissioners should make a New Year's resolution to legislate less often and more effectively."

Jobs lost

Mr Monks urged the government to end the indecision which had left Britain "half in, half out" of the euro.

"Today I am asking the government to move forward on it and to step up the preparation otherwise we are in a sense going to put it off and put if off," he told Today.

"Then we'll be talking about the next election rather than perhaps next year."

The UK's exclusion from the single currency has already cost 150,000 manufacturing jobs this year, Mr Monks said.