Blair cools on single currency

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Political Correspondent

Tony Blair, the Labour leader, edged further to a more sceptical stance towards the European Union last night, saying "there are considerable doubts about the feasibility" of the 1999 launch date for the single currency.

Rather than monetary union, he said the priorities for a Labour government in Europe would be enlargement of the EU to take in countries in central and eastern Europe, reform of the Common Agricultural Policy and open competition in airlines, energy and telecommunications. His comments on the single currency follow doubts cast on the 1999 timetable by former Labour leader Neil Kinnock, European Commissioner, whose views on Europe are close to Mr Blair's.

"France and Germany are determined to press ahead on the Maastricht timetable," Mr Blair told an American and British business audience at a Time magazine dinner. But he reflected a recent shift of emphasis in European debate, which has focused on the practical obstacles, with many economists talking about 2002 as the earliest feasible date, while insisting: "Britain's attitude should not be to set out to obstruct or to glory in difficulties." Mr Blair stressed that a Labour government would "keep our own options open" while "trying to ensure that the issue is handled constructively".

And his emphasis on enlargement conflicts with Franco-German orthodoxy, which is that closer integration must come before expansion. He pointed out that Britain would hold the EU Presidency in the first half of 1998, and he pledged that "a Labour government will open negotiations with the first group of these countries" as the first priority of its presidency.

He also tempered his pro-Europeanism with a vigorous assertion of the importance of the relationship with the United States, underscored by his meeting President Clinton on Wednesday. He urged the EU-US summit in Madrid this weekend to open talks on the elimination of trade barriers "to create a new Euro-Atlantic community".

Developing the "patriotic" theme of his Brighton conference speech, Mr Blair insisted that devolution of power to a Scottish parliament and "deeper co-operation" between European states were essential to a modern patriotism.