Brown faces up to the euro

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The Independent Online
Gordon Brown will today open up a full-scale Treasury offensive to force the country to face up to the highly-charged question of the single European currency.

The move is bound to excite Euro-sceptic suspicion that the Government is engaged in a softening up process for early membership of the Euro - and abolition of the pound - possibly in time for the 1999 launch.

A Treasury source said last night that the government line remained firm; that while nothing was ruled out, formidable obstacles remained to first- wave British participation.

The latest date for British notification that it plans to join should be this summer, when preparatory legislation would be needed. But one government source said last night that it might be possible to ask for "more latitude" on the timetable, if a firm intention to join was given by the end of the year.

In a London speech today, the Chancellor will argue that, unlike the Tories, the new government believes the arguments for and against the Euro have to be addressed.

"Whether Britain is in or out," he will say, "Economic and Monetary Union will have profound implications for British business and the British economy."

As for the raw politics, Mr Brown believes that his call for informed debate about the single currency contrasts markedly with the dogmatically blinkered approach taken by the previous government.

The danger for the Tories is that if the debate takes off, it could reopen the deep-seated and highly-damaging divisions within the Opposition ranks.

Some Conservative frontbenchers have warned William Hague that they will resign if he pushes the party line still further against Europe, although the new leader has already ruled out single currency membership, under the Tories, for the next ten years.

To help move the debate along, the Treasury will today publish a report on Economic and Monetary Union by Lord Currie of Marylebone, Professor of Economics at the London Business School.

That will be followed through, next week, with publication of a practical Treasury guide for business on the implications of a single currency.

The Chancellor will argue today that following the Amsterdam summit, and the new spirit of co-operation that was delivered by Tony Blair, the new Government was better placed to play a constructive role in the creation of the new Euro.

Britain would be arguing that economic reform would be required: to promote investment through the European single market; to get the advantages of the single market for all financial services, like insurance; to ensure economic convergence between EU member states; to get flexibility and adaptability in employment markets; and to encourage employment growth.

Mr Brown will say European progress should be judged on the basis of those five tests.