Talks by European finance ministers ended in disarray last night with France and Germany, the masterminds of a new economic policy coordinating body to be called Euro-X, still rejecting British demands to be admitted.
As he left the Brussels headquarters Mr Brown condemned efforts by "exclusive groups of people" to hijack economic policy cooperation which he said was constitutionally entrusted to finance ministers from all 15 member states. But he faces accusations that the decision to keep Britain out of Emu for the lifetime of this parliament means Britain is being politically as as well as economically marginalised.
"I am determined to stand up for British economic interests and that economic coordination which is necessary happens among all EU ministers and not just an exclusive group of people," he said.
The Chancellor said he accepted that some matters, such as the decision on the composition of the future European Central Bank, could not legally involve countries not taking part in the single currency, but he condemned efforts by the "in" governments to exclude the "outs" from talks on unemployment, and other critical economic policies.
Mr Brown rejected as inadequate an offer from the Emu participating countries that the "outs" will be given a regular flow of information about what is discussed. This was the compromise offered by the Luxembourg EU presidency which sought Britain's and the three other "out" countries' blessing for the new forum.
But Luxembourg Prime Minister, Jean Claude Juncker, whose government holds the EU presidency, said that while he would prefer to have an agreement among the 15 at the EU leaders' summit in 10 days time, Euro-X would go ahead regardless. The Prime Minister Tony Blair will now battle at the summit to prevent Britain's exclusion but will find himself legally powerless if the "ins" want to launch the Euro-X as a purely informal body outside the normal EU framework. Britain's fear is that debate within the new body will pre-cook decisions which will then be referred to all 15 finance ministers for rubber-stamping.
Britain's obduracy was dismissed by the French as "sulking". The problem for the "outs" arose not from the Euro-X but from their decision to remain outside the single currency, said Dominique Struass-Kahn, the French minister.
"The Euro is a monetary marriage. But those in the marriage do not want anybody else in the bedroom," Mr Strauss Kahn said. He added that the new inner circle would be launched with or without Britain's agreement. "I hope the UK will join Emu as soon as possible but as long as they remain outside some of their interests will be contradictory to those who are inside."
The "outs", he said, would understand in time "that there is no point in sulking" and that they would need information on what is being discussed in the new currency management club.
Short of accepting an unsatisfactory compromise which ensures it is, at best, kept informed of discussions inside Euro-X, there is little Britain can do.
The denial of full participation on the new body, even if it is as the Germans claim "informal", means Britain will have little scope to exert influence over discussions on such matters as budgetary policy, fiscal harmonisation, wages policy, and the external exchange rate policy of the euro-zone.
l London (Reuters) - Emu member countries could put Britain under political pressure if the pound should fall sharply against the euro at some stage in the future, Robin Cook, the Foreign Secretary, said yesterday.
Mr Cook was asked by the Commons Foreign Affairs Committee whether the pound might be forced to shadow or follow the single currency before Britain joined it. "I think the position is that we cannot be legally compelled to do so," he said.
He added: "If the single currency was to find itself appreciating against sterling, or we were seen to be depreciating, we would come under political pressure."Reuse content