Post-euro plans may leave Britain out in rain

Franco-German ideas for EMU have sparked an attack of Treasury jitters. Sarah Helm reports from Brussels

New plans to form a powerful body to run European economic policy after the launch of the single currency are to be discussed when European Union leaders meet in Dublin this weekend.

New Franco-German ideas for such a body are already causing intense anxiety in the Treasury. If Britain does not join the single currency, the Government would be excluded from the new club, which will have wide-ranging powers to set economic policy for the euro-zone.

Although no formal proposals are likely to be set out at Dublin, discussions on a joint letter setting out the idea were underway in Paris and Bonn this week. The moves by France and Germany to develop their plans will fuel fears among British pro-Europeans that if Britain does not join the single currency it will be left on the sidelines.

New ideas will also be proposed in Dublin to extend the so-called "stability pact", the controversial system of rules for running the euro-zone, which is currently under discussion, into a "stability-and-growth pact". The intention is to reassure the public that the single currency means growth and jobs, as well as strict economic discipline.

The proposals from France and Germany are the latest indication of the serious preparation which is underway for the launch of the euro. Outstanding differences between France and Germany over how the single currency's rules and sanctions should be applied are still not settled. However, sources in Paris and Bonn last night expected that the dispute would be solved at a meeting of European finance ministers today, ahead of the full summit.

Once the stability-pact rules have been finalised, attention will switch to the more sensitive question of how economic policy will be agreed and what body should enforce stability rules. It is largely agreed in Bonn and Paris that decisions on enforcement of the stability pact would be taken by European finance ministers, as set out under the Maastricht treaty.

However, the more radical plan is to establish an informal policy-making body, which would meet separately from the finance ministers, and would agree in advance how the stability pact should be enforced. The new club would also discuss exchange-rate policy for the euro-zone and other crucial aspects of economic policy. It would constitute an inner circle, from which Britain would be excluded if it chose not to join the single currency.

The idea of creating an informal political group, which would probably consist of heads of government from countries inside the single currency, has already been floated by Jean Arthuis, the French finance minister. He discussed the idea with Kenneth Clarke, the Chancellor, during the Anglo-French summit last month, when Mr Clarke voiced strong opposition.

The plans, which are carefully guarded, are sensitive for all countries who may be left out of monetary union in the first phase. Should a body be established for "in" countries only, suspicion will grow of a new "hard- core" Europe. The European Commission is also strongly opposed to the setting up of such a body which would be outside the rules of the Maastricht treaty. But France has long argued that Europe's economic policy must not be left solely in the hands of the future European Central Bank, but must be given a political counter-weight.

Any disagreements apart, the European finance ministers are determined to use the Dublin summit to proclaim the success of the stability negotiations. The pact is widely viewed as the foundation stone for monetary union.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Sport
ESPN footage showed a split-screen Murray’s partner Kim Sears and Berdych’s partner Ester Satorova 'sporting' their jewellery
tennis
Arts and Entertainment
Cold case: Aaron McCusker and Christopher Eccleston in ‘Fortitude’
tvReview: Sky Atlantic's ambitious new series Fortitude has begun with a feature-length special
Voices
Three people wearing masks depicting Ed Miliband, David Cameron and Nick Clegg
voicesPolitics is in the gutter – but there is an alternative, says Nigel Farage
Voices
The veterans Mark Hayward, Hugh Thompson and Sean Staines (back) with Grayson Perry (front left) and Evgeny Lebedev
charity appealMaverick artist Grayson Perry backs our campaign
News
i100
News
people
Sport
Chelsea manager Jose Mourinho
footballThe more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Life and Style
Vote green: Benoit Berenger at The Duke of Cambridge in London's Islington
food + drinkBanishes thoughts of soggy school dinners and turn over a new leaf
News
Joel Grey (left) poses next to a poster featuring his character in the film
peopleActor Joel Grey comes out at 82
News
i100
News
business
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Marketing & Sales Manager

£40000 per annum: Ashdown Group: A reputable organisation within the leisure i...

Tradewind Recruitment: Science Teacher

£90 - £140 per day: Tradewind Recruitment: I am currently working in partnersh...

Recruitment Genius: Doctors - Dubai - High "Tax Free" Earnings

£96000 - £200000 per annum: Recruitment Genius: Looking for a better earning p...

Recruitment Genius: PHP Developer

£32000 - £36000 per annum: Recruitment Genius: A rapidly expanding company in ...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee