Brown puts weight behind euro

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GORDON BROWN last night tried to stop international markets driving the pound to a new high on the eve of the historic launch of the euro, with reassurances that the single European currency would be a success.

The Chancellor raised the prospects of Britain joining the euro early in the new millennium and came as Tony Blair made last-minute efforts to stop the launch being marred by a row over the presidency of the European Central Bank.

Jacques Santer, President of the European Commission, declared it was no longer "if but when" Britain would join the euro. Mr Brown emphasised that Britain would not "take a leap in the dark" but the euro's success as a hard currency would meet one of the key tests for Britain's membership.

The Chancellor described it as "the opening of a new chapter for Europe" but he said it was only the beginning because the European Union had a high-level objective of long-term stability on which economic success depends.

"I am confident that progress has been made in all the areas that matter for the success of the euro," said Mr Brown, who was also confident of eventually winning public support for Britain's entry.

His upbeat message contradicted the warning by the Tory leader William Hague that the euro would be a soft currency and the formal locking of 11 currencies tomorrow will lead to a flight of money into sterling, inflating its value and hitting exports and jobs.

The agreement of 11, led by France and Germany, at a heads of government summit today is a foregone conclusion and was due to be given final approval after a meeting of European finance council ministers last night in Brussels.

As he arrived, Mr Brown said: "I heard politicians saying only a year ago this could never happen, that today's events were impossible. I think there has been remarkable progress in Europe in achieving budget discipline and greater long-term stability with economic reform."

The Chancellor said there was agreement in Europe on Britain's agenda for creating employment and securing jobs - underlining his confidence that the euro will provide the economic benefits required before joining after a referendum, which he said would be early in the next Parliament.

The Prime Minister flew to The Hague last night for talks with Wim Kok, the Dutch Prime Minister, in a last-minute effort to broker a deal between France and Germany over their rival candidates for the central bank. Mr Blair spoke to Chancellor Helmut Kohl, Jacques Chirac and may speak to Mr Kok again today but was said by Mr Brown to be making progress in seeking acceptance for Germany's preferred choice, Wim Duisenberg, the Dutch president of the European Monetary Institute, in the face of tough French bargaining for their candidate, Jean Claude Trichet, governor of the Bank of France.

British ministers said the rules requiring an eight-year term could not be broken but a compromise was being negotiated possibly to allow Mr Duisenberg to retire after four years, leaving the French a four-year share.

The Prime Minister's official spokesman said: "We think we can make progress, we think we can broker an agreement that will satisfy the requirements of the [Maastricht] treaty but it does remain difficult."

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