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Blair cannot now be honest
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Britain's role in Europe
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new euro hint - BBC about Blair's speech
The euro challenge /Blair/
The prime minister, in spite of all his enthusiasm for full engagement with Europe, also repeated the mantra that "as for the euro, the conclusion of this argument is not that we go in regardless of the economic conditions. It is that if the economic tests are met, political or constitutional barriers should not prevent us joining."
The formal position is not dissimilar to the chancellor's. Mr Brown, in his speech to the Confederation of British Industry at the beginning of the month, described the position as "one of pro-euro realism". But, as befits his job as chancellor, he stressed the rigour of the assessment of the Treasury's five tests. He remains the gatekeeper to any referendum.
For many enthusiasts for entry, this position is intolerable. The prime minister, they suggest, should sweep the chancellor's objections, or the chancellor himself, aside. But the chances of winning a referendum against a sceptical public opinion over the opposition of a respected chancellor must be close to zero. So why not sack him? The chances of winning a referendum while Gordon Brown sits on the back benches expressing his opposition do not seem that good either.
Yet this leaves the prime minister with a difficulty. For we may presume that the Treasury will, at Gordon Brown's request, do a thorough evaluation of the economics of euro entry. It will then conclude that entry would be extremely unwise. It is impossible to imagine that any group of competent economists would conclude otherwise.
The case against joining has been set out in an excellent pamphlet* for the New Europe Research Trust, which Sir Alan Budd, former chief economic adviser to the treasury, describes as "required reading for the Treasury when it assesses the government's five tests". So it is.
For a speech which had been billed as part of an attempt to consider Britains future within the European Union, the address delivered by Tony Blair yesterday was notable for its concentration on the past.
The Prime Minister spent most of his time repeating the familiar charge that British Governments had failed to appreciate the significance of European developments, in a string of missed opportunities and, as a consequence, had left Britain less able to exploit its possible influence than if they had acted imaginatively.
But if the logic of this lengthy preamble was that Mr Blair would outline a fresh approach, his audience was to be disappointed. He simply restated existing policy on the euro.
The significance of his words rested in timing and tone. This was at least the third major speech in the past two months where the Prime Minister has sought to leave the impression that he is warming towards the single currency. He always stops short of words that would imply that the fabled five economic tests are mere dressing for a political decision, or would commit him to a date for a referendum that his advisers know could easily be lost.
So far, the euro has worked well for its member countries. Those who said it would never happen, or never work, are wrong. But this success does not necessarily make Britain's entry either inevitable or desirable.
The economic case alone will not be decisive. In the short term, the benefits of exchange rate stability are offset by less macro-economic autonomy. Greater access to a large market would promote trade, competition and efficiencies in the longer term. These gains, however, could be more than cancelled out by entry at the wrong exchange rate.
Politics must therefore move up the agenda. Britain would gain from closer co-operation with its neighbours and most important trading partners. Its influence would be enhanced over European economic policy debate. This should not be exaggerated - Britain already provides an important example of the benefits of liberalised markets. But greater engagement could provide an additional spur to others. Mr Blair clearly understands these benefits. Friday's speech - the most enthusiastic on the euro he has made on British soil - showed he was seeking to build momentum.
He must be much more explicit. The challenge in persuading the British population of the case for the euro cannot be underestimated. Britain must not stumble into the euro once conditions across the Channel seem much better than at home. That would be the worst of all worlds.
French Prime Minister Lionel Jospin made the call in a keynote speech on the future state of Europe. Jospin said unfair competition between national tax regimes was "unacceptable" and that harmonising corporate taxation would eventually be necessary.
However, Blair, campaigning ahead of the British general election on June 7, told reporters: "We don't agree with tax harmonisation across Europe. "Unfair tax competition is another matter, however. That prevents the single market working properly.
The seven reasons why Blair will lose
Tony Blair boldly declared on Thursday that Denmark's rejection of the euro would have "no effect" on the British euro debate or the timing of a referendum in Britain. If this is the Prime Minister's idea of humility and listening to the people, then perhaps William Hague should book the removal van for Downing Street after all.
It is, of course, true that four million Danes are not representative of British public opinion. But what Mr Blair must surely realise, unless he has lost his grip on reality completely, is that the Danish experience is unrepresentative mainly because it vastly understates the difficulty that a British Government would have in winning the euro debate.
The British Government has a new European
DON'T expect a formal announcement, but the Government has a new European policy. The Prime Minister's comments in Korea last week were a foretaste of his intention not to join the euro during the next parliament. I can't prove it, of course. No slinky spin-doctor has tipped me the wink. But I certainly share the consensus which has developed in recent weeks that Mr Blair has resigned himself to not joining the single currency.
The reason is simply that it has become indubitable that the "yes" camp cannot win a referendum on the euro in the medium term. It's as simple as that. Mr Blair's desire to join remains undimmed. He has not changed his mind about what he wants, but he has changed it about what he believes he can get.
He was speaking after the euro crashed to its lowest level against
the dollar. But the Conservatives were quick to try to capitalise on the prime
minister's comments - despite the fact that his official spokesman said there
was nothing new in them.