Hurd urges `open debate' on single currency

Douglas Hurd yesterday used his authority as Foreign Secretary to reassert Cabinet neutrality towards European monetary union (EMU) with a warning that "never" was as "foolish" a word to use about a single currency as "now". As Paddy Ashdown, the Liberal Democrat leader, sought to exploit continuing signs of Cabinet division by preparing a Commons motion for next Monday seeking a future referendum on Europe, Mr Hurd called for an "open, objective debate" on EMU.

In terms which - like those used by Michael Heseltine, the President of the Board of Trade at the weekend - contrasted sharply with the remark by Jonathan Aitken, the Chief Secretary to the Treasury, that he would "hesitate for an eternity" before agreeing to a single currency, Mr Hurd said: "We need to hear a little less of the politicis of the choice and more about its effect on our prosperity and indeed our freedoms."

Professing himself an "agnostic" on the issue, Mr Hurd added: "We need to escape from nightmares about the withering away of the nation, about the remorseless advance of the European superstate; to move the debate from shadows to substance." He told his City audience that they had an "indispensable voice in that debate".

Downing Street sources yesterday stressed the central importance in the key European passage of John Major's speech on Friday of his insistence on leaving open the long-term question of whether Britain would join a single currency. Mr Major, who has beenurged by Eurosceptics to rule out participation in EMU altogether, made clear in his speech his view that it would be a mistake to make a commitment now one way or another.

The fresh moves to rebalance the Government's stance followed a weekend in which Mr Heseltine had taken an overtly pro-European stance, and Sir Leon Brittan, Britain's senior European Union commissioner, had cast serious doubt on the tactic of imposing new conditions on accepting a single currency.

In his speech on Friday Mr Major said: "By the right economic conditions, the Government does not only mean the Maastricht criteria - they are a necessary but not a sufficient condition to justify a single currency."

But while Conservative Party sources had pointed on Friday to the passage as one of the new elements, Downing Street was at pains yesterday to suggest that Mr Major was doing no more than "developing" ideas already embedded in the Maastricht treaty.

At the same time, the sources pointed to a speech last week by Eddie George, the Governor of the Bank of England, in which he suggested that EU countries would have to take into account the dangers of trying to weld countries with widely differing levelsof structural unemployment into monetary union.

Article 109J of the treaty specifies the need, before monetary union, of convergence between the participating countries on inflation, elimination of deficits, relative exchange-rate stability, and interest rates. But it also adds that the commission andthe European Monetary Institute should "take into account" development of the European currency unit, market "integration", balance of payment figures, unit labour costs and other price indices"

Robin Cook, Labour's foreign affairs spokesman, said yesterday: "There is no way in which Britain can be led into the very important negotiations [on the EU's future] by a government so disunited as this one in which Cabinet ministers contradict each other every five hours."