Britain 'on road to euro', insists EU commissioner

A European commissioner fuelled cabinet tensions over joining the single currency when he suggested Britain's membership was inevitable.

Pascal Lamy, the trade commissioner, is the most senior Brussels official to forecast that Britain will eventually follow the lead of the 12 European Union nations that introduced euro notes and coins on 1 January. He said the single currency was "a topic for domestic internal debate in the UK on which a European commissioner must be very careful about", but he was confident Britain would join.

He told BBC Radio 4's The World At One: "I think the road to Europe may be a bit longer for the United Kingdom than for others but it is the same road. It simply is a bit longer."

Mr Lamy said British membership of the single currency was "very important to the union" and added: "I think we need the British to be in the system, because we will run it better with the Brits in than with the Brits out." Asked whether he believed Britain would join the currency in the end, he replied: "I think so."

Mr Lamy's comments will be welcomed by pro-Europeans, both inside and outside the Government, who are pressing for an early referendum on British membership.

His intervention echoed a series of comments by Peter Hain, the minister for Europe, who said this week: "Can we stay out of the single currency forever? I don't believe we can."

Mr Hain forecast that Denmark and Sweden would vote to join the currency next year, leaving Britain the only EU member outside the financial system. But many ministers are keen for the Government not to get boxed into a corner over the issue too soon after the launch of the currency.

In comments that will be seen as strongly federalist, Mr Lamy also called for greater integration among a hard core of EU countries as the union expands from 15 to 25 member states. He said his "preferred option" was to retain "the sort of coherence we have" among current members. If that was not possible, he said individual countries such as Germany and France could "work more closely together".

Mr Lamy, visiting London yesterday, said there was no question that the United States could ignore a World Trade Organisation ruling that tax breaks for American multinational companies amounted to unfair competition.

"Why would they not comply? After all, they are part of the system and are bound by the rules," he said. The WTO ruling was unlike other international agreements that President George Bush had backed away from because America was committed to the organisation.