Leading Article: Midnight! A happy, bouncing euro is born as 1999 rings in

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NOTHING MUCH happened at midnight last night (except the odd party), and yet everything changed. The euro was born - and yet this event merely formalises the ties that have bound 11 European currencies for some time. The European Central Bank was already running interest-rate policy for the euro area, engineering last month's cut in rates for all 11 currencies. And the French will carry on using francs and the Germans marks for three- and-a-half more years: euro notes and coins will only be phased in during the first half of 2002. But the euro now exists as a trading and banking currency. British visitors to the Continent will be able to take euro travellers' cheques; their credit card bills will be itemised in euros, and conversion costs will drop. Over time, more and more prices in continental Europe will be shown in the both local currencies and their euro equivalents.

What matters most to Britain about today's calendar flip is that the alarmists have been dished. Half the Eurosceptics said the euro would never happen, and the other half said it would be born into a Europe torn by economic chaos and civil disorder. Even sensible people like John Major and Kenneth Clarke used to say there was a good chance it would not be launched on time. All that turned out to be bunkum. Not just wrong, but silly. The euro is being launched in conditions of organised calm. Most significantly, it arrives with a degree of popular consent which was unexpected just six months ago. The German public, above all, which had long been deeply suspicious of the plan to replace their mark, seems to have accepted the euro with a shrug.

This has implications for Britain, where there is a referendum yet to be won. The arguments are well-known, and some of those against the euro are justified: the European Central Bank is neither open, nor accountable enough; and there are likely to be problems of regional recessions in the euro area which will put pressure on the Brussels budget. However, the gains for Europe's citizens - primarily economic but also cultural - outweigh the doubts. At its worst, the argument for joining is that we would lose by staying out.

It seems that public opinion will only begin to move, however, once joining the euro has become an accepted fact. Britain's membership is taking on an air of inevitability among politicians and commentators - now the Government needs to bring this home to the British people. The Chancellor will this month publish detailed plans for what needs to be done if the decision to join were taken: that much is welcome - but it is not enough.

Tony Blair should move from the negative - there is no constitutional bar to Britain's joining - to the positive - the Government believes it is in Britain's interest to join the euro. And he should move, as Peter Mandelson did prematurely last year, from "if" to "when". As Geoffrey Howe suggested in The Independent yesterday, he should set a target date for British entry. Not only would a date become an anchor in the markets, thus reaping for Britain many of the benefits of monetary union straight away, it would reverse the polarity of popular assumptions - from "out unless, we vote to go in" to "in unless, we vote to stay out". Remember, too, that for continental Europeans the single currency has been a fact since the Maastricht Treaty was signed in December 1991. Even for decimalisation, the changeover date was set in 1966, five years ahead.

Mr Blair should say that the Government wants Britain to be able to join the euro "from 2003". To be sure, a date would be a hostage to fortune. But not setting a date would be worse. The Prime Minister said last month: "When I say that I want Britain to be a leading partner in Europe, engaged in shaping its future, I mean it. And I can deliver it." This year, his boast will be tested.