Niall FitzGerald, chairman of Unilever, said it would be better to delay the project than go ahead with a fudge in order to meet the 1 January 1999 deadline. But he urged the Government to commit Britain to joining later on a firm timetable.
"A pragmatic British voice with credibility and authority restored through its clear commitment to the success of EMU is now essential in the crucial months ahead," Mr FitzGerald said in a speech at the London School of Economics last night, joining the chorus of voices calling on Tony Blair to take a lead in Europe.
Continuing the former government's "wait and see" policy would be disastrous, Mr FitzGerald argued. Britain would lose an opportunity to shape the single currency in its own interests.
Mr FitzGerald also said Labour ministers should push for the completion of the single market and for an EU-wide commitment to jobs flexibility. Improved social standards should be based on making people more employable rather than new workplace regulations.
The Unilever chairman did not waver from his view that EMU was the natural extension of the single market and would boost investment, growth and jobs. However, he insisted these benefits would only arise if the single currency was based on genuine economic convergence.
This was not a matter of whether or not they were 0.1 percentage points over the Maastricht ceiling on the ration of government deficits to GDP. Rather, it meant sustainable reductions in budget deficits and labour market flexibility.
"If the euro is set up on the wrong basis, the single currency could be blown apart within a few years. That would carry great costs," he said, criticising those pressing for a broad but fudged membership. Mr FitzGerald said an initial core group should go ahead, joined by others in a phased first wave as they met the criteria.
Although Britain would meet the government deficit and debt criteria in time to join the first wave, the more advanced state of the economic cycle in the UK would justify delaying entry. "In these circumstances I believe we should give an unequivocal commitment to go in at a later stage, on a clear timetable," Mr FitzGerald said.