Charm is not enough - now Blair must take on Murdoch

The die is cast and there is no point in pulling any punches in the bitter euro debates to come

IT'S EASY for the metropolitan elite to be sniffy about Rupert Murdoch and Conrad Black's hysterical campaign against the so-called tax harmonisation plans of Germany's new evil genius, Oskar Lafontaine. The fact that Lafontaine has proposed no such thing was not going to be allowed to stand in the way of a good scare story. Although the Euro-phobes' scare campaign has little actual substance, it's certainly had an impact.

The latest MORI poll shows that among the readers of every major paper, opinion has swung against Britain joining the Euro since September. Even readers of The Independent - who are among the most pro-Europe of any national newspaper - registered an 11 per cent swing against the Euro during the recent row as the spin off from radio and television coverage got to them.

This is bad news for Tony Blair's softly-softly, catchy-monkey charm offensive to persuade Murdoch and his ilk of the joys of Europe. Blair at his most charming can get away with murder, as those of us who have occasionally been on the receiving end of one of his charm offensives will know. The technique he had already developed while at Fettes has been honed to perfection in his dealings with Labour MPs.

For those of us who remember Neil Kinnock under pressure at the weekly meetings of the Parliamentary Labour Party, his face red with rage as he questioned the loyalty and occasionally the manhood of his colleagues, Blair's performances come as a blessed relief. Faced with strong criticism from Labour MPs, Blair's response is to turn on the charm, be humble and genuinely admit that he might have made an error. Often he is able to turn the mood of an audience with a self-deprecatory joke, though his preference is for gentle jokes about his leftist critics.

Blair's style has worked wonders with countless newspaper editors over lunch, and was a key factor in defusing the sort of virulent press criticism that did so much to cost Kinnock the premiership. But the main factor in winning the support of Murdoch's Sun was not charm, but a strongly Euro-sceptical article he penned for that paper in the run-up to the general election. It is this ability to float like a butterfly above the ideological divide which has been Blair's great strength in driving forward the Northern Ireland peace process. Lacking John Major's sentimental commitment to the Unionists, he approached the issue as a problem to be solved.

Blair's problem with the question of monetary union is that it is not a problem to be solved but a choice between two fundamentally opposed views about how the world should be organised. On the one hand, Rupert Murdoch and Conrad Black demand loyalty to project World America in which America, working through its increasing domination of the United Nations, IMF, World Bank and World Trade Organisation, reorganises the entire global economy along lines similar to the internal organisation of the domestic US economy. The classic example of this was the attempt to secretly negotiate a new set of rules on international investment among the rich nations of the West which could then be imposed on the weaker nations of the world.

Not surprisingly, it was France which sunk the pernicious Multilateral Agreement on Investment (MAI) which would have undermined trade union rights and environmental protection legislation across the planet. Although 30 years ago De Gaulle was the only major figure in European politics to resist America's grand designs, recent years have seen the election of a swathe of European governments determined to defend Europe's welfare state, environmental legislation and trade union rights. The virulence of The Sun's attacks on Lafontaine are because he is the principal articulator of a pan-European alliance strong enough to resist US pressure.

Blair's preference would be to avoid this schism by achieving some form of compromise between the rival European and American agendas. His mid- Atlantic position has already led to the most dramatic U-turn of this government on the issue of European defence co-operation. At his first European heads of government meeting, in the summer of 1997, the Prime Minister strongly opposed any moves towards a pan-European defence structure, but in the last few weeks he has signed up to exactly that with the French president, Jacques Chirac, while continuing to protest that this new deal must in no way undermine Nato.

To govern is to choose, and time is rapidly running out for Britain to decide where it stands on the issue of the Euro. Blair's initial strategy was to hope that Murdoch could be won round by a charm offensive. This move would allow public opinion to be swung round in favour of the Euro, allowing the Prime Minister to win a referendum on joining the Euro in the honeymoon period immediately following his re-election victory in 2001.

The prospect that Britain seemed set fair to join the Euro no later than 2003 was enough to keep big business happy. But now that the Euro-sceptic press barons have made clear that they are not susceptible to a charm offensive when it cuts across their fundamental economic commitment to the US, we face the prospect of a virulently anti-Labour campaign in the run-up to the next general election depicting Blair as a stooge of a German conspiracy to win by stealth what they failed to achieve in two world wars.

Blair's hope that public opinion could be slowly shifted on this subject is now dead. As his performance in the House of Commons on Monday shows, he is starting to fight openly for British membership of the Euro. Having gone this far, the die is effectively cast and there is no point in pulling any punches in the bitter debates to come. We need to spell out quite clearly the benefits to Britain of being part of a Euro-currency bloc large enough to resist the attacks of speculators which have so often in the past derailed the plans of Labour governments. We need to spell out the benefits to British industry of being part of a currency where the interest rate is 3 per cent rather than our current 6.25 per cent.

But most of all we need to make clear that while Britain's large corporations were prepared to tolerate joining the Euro a few years late, the prospect that Britain might not join at all in the event of a Tory win based on opposition to the Euro means that we would see a flood of jobs from Britain that would make the Israelites' exodus from Egypt look like a weekend excursion.

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