Santer widens Tory rift

CONSERVATIVE divisions over Europe were reopened yesterday when Jacques Santer, the new European Commission President, called on the EU to stick to its timetable for introducing a single currency.The comments put Mr Santer directly at odds with C abinet ministers, but won him praise from Conservative pro-Europeans.

Mr Santer's speech, at a conference in Davos, Switzerland, argued that maintaining the EMU timetable would "boost the credibility of the single European currency" and "ensure we can permanently benefit from lower interest rates".

He added: "My policy in this sphere is clear. There must be no departing from the path towards economic and monetary union mapped out in the [Maastricht] treaty based on the strict application of the convergence criteria laid down." Britain has a single currency opt-out from Maastricht which sets out 1997 as a target date, with 1999 as an alternative.

Cabinet ministers gave an immediate rebuff to Mr Santer's comments. Michael Portillo, Secretary of State for Employment, said that "it would be very difficult" for most EU member countries to achieve fully the proper convergence criteria by 1997. The Conservative Party Chairman, Jeremy Hanley, said a single currency by 1997 would "be an impossibility, certainly under the Maastricht conditions".

But one backbench Tory pro-European, Hugh Dykes, said Mr Santer had done "a considerable service". He added: "I hope all the member governments will pay close attention, including the British Government, the latter particularly after the painful and unnecessary hesitations of recent weeks."

Meanwhile Douglas Hurd, the Foreign Secretary, moved to quash reports that the Cabinet had overturned his preliminary proposals for the Intergovernmental Conference due to begin next year. He told a Conservative Political Centre conference: "There has been some fanciful comment on supposed ructions in Cabinet about alternative prospectuses for Europe. The Prime Minister has dismissed one such account as `a travesty'. There was a good discussion on Thursday which endorsed the hard-headed and realistic approach which I recommended.''

Mr Hurd made clear that Britain would seek in 1996 to reclaim some authority surrendered to the EU, although "no-one should pretend that Britain can opt out of Europe''.