Brussels claims single currency will sideline UK

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The Independent Online
Plans to appoint a single political figure to represent countries inside the new "euro zone" on the international economic stage are being privately canvassed by member states.

The appointment of a "Mr Euro" figure could have far-reaching implications for Britain should the next government decide not to join the single currency, officials in Brussels concede.

Outside the euro zone, Britain could drastically lose influence in key economic clubs such as the World Bank, International Monetary Fund and the Group of Seven (G7) industrial nations. Britain's voice could become drowned out by representatives of the new "big three" trading blocs: the euro, the dollar and the yen.

Furthermore, Britain's right to have a seat in such powerful international groups as the G7 could even be called into question if it does not join the single currency, say sources close to the discussions. The G7 may have to be reconvened as a new "Group of Three".

The question of how the euro zone countries will promote their individual economic interests with a single voice after the launch of monetary union will be raised tomorrow, when the European Commission publishes a long awaited report on the euro's role on the world stage.

The report, passed yesterday to The Independent, sets out in detail how the new European currency is set to rival the US dollar as the most powerful economic entity in the world.

The Commission paints a rosy picture of a powerful, successful and stable euro dominating world trade in the next millennium.

The report's warning to those countries which do not join is clear. "The introduction of the new money will have major consequences for member states which do not participate and for third countries."

In view of the massive world-wide influence of the single currency, the bloc will have to adapt its procedures in order to speak "with a common position in international discussions". The report sidesteps any direct reference to the appointment of a single figure to sit at these world meetings.

Such a move is still viewed as sensitive as it would set the European Union further down the road towards federal style rule. However, officials in Brussels confirm that debate is under way about how the euro's "common position" could be presented. One option might be to appoint a single, weighty political figure. Another might be to appoint the chairman of the European finance ministers' council.

The political figure, would always be accompanied by the chairman of the new European Central Bank.

In terms of world trade, the report says the euro will account for 20.9 per cent of all dealings, compared with 19.6 per cent for the dollar and 10.5 per cent for the yen. One third of world exports will be paid for in euros after the launch of the single currency, says the report.