Redwood joins battle with a pamphlet blast

COLIN BROWN

A fresh challenge to John Major was issued by John Redwood yesterday, with a warning not to weaken over the Maastricht terms for creating a single currency on the eve of the Madrid European summit .

He said Mr Major should not allow Germany and France to change the rules laid down in the Maastricht Treaty requiring currency stability for at least two years before a single currency could be launched. The former Welsh secretary, who challenged for the leadership in July, denied he was reopening Tory wounds on Europe.

He accused Tony Blair of being "an appeaser on Europe" when he launched a pamphlet to begin a campaign among British businessmen to oppose the single currency.

Mr Redwood said he believed Mr Major and other leaders would be pressed at Madrid to allow terms for a single currency to be eased, to allow France to join with Germany. "That is the game plan, I think ... Britain should say the Maastricht requirements are the bare minimum and there should be no dilution at all. This is a highly dangerous venture. If economies are not in line with one another, it could do damage to jobs, prosperity, opportunity."

A Treasury source confirmed no one in Whitehall believed the two-year rule would be a barrier to creation of a single currency. Mr Redwood said the single-currency drive was the cause of the riots in France, because it had forced Paris to maintain high interest rates to keep the franc high against the Mark. "The single- currency scheme is in crisis. The Exchange Rate Mechanism was meant to be a success and the currencies were meant to be trading together and be comfortable. They are not. Britain is in a very good position to say 'Hold on - let's think this through from first principles'."

Mr Major could fulfil his commitment to be at the heart of Europe by arguing with a distinctive view which was different from Germany and France. "Britain has a very positive agenda for jobs and prosperity. That, I am sure, is what the Prime Minister will be putting forward. You don't put yourself at the heart of Europe if you ring up Germany just to hear what she wants."

In his pamphlet Mr Redwood says the main argument against a single currency is that it would be a big step on the way to a single European nation. But it would mean higher taxation to cross-subsidise other countries, lead to higher prices, and cause economic disruption.

The Single European Currency, by John Redwood, Tecla Editions in association with Conservative 2000 Foundation, PO Box 7567, London NW3 2LJ (Tel: 0171 435 5077).