Mon, May 12, 2003 - Page 7 News List

Blair paves UK's way to join euro

CLEAR SIGNAL The go-ahead will be given to Cabinet ministers to start campaigns to join the single currency, although key tests will not be met

THE OBSERVER , LONDON

British Prime Minister Tony Blair is to give his Cabinet ministers the green light to campaign to join the euro even though the majority of the key "five tests" will not be met.

In the clearest signal yet that he wants to pave the way for Britain to join the single currency, Whitehall sources said that he will allow Cabinet members a "freer reign" to push the arguments on the issue.

When the results of the tests are announced in the next three weeks, Blair wants to make it clear that Britain has taken an "enormous step" towards joining, and will argue that the British economy is now closer to that of other European countries, essential to the euro working.

Senior figures close to the prime minister said that the analysis of the key hurdles to joining the euro was "open to interpretation" and that the chances of the country joining the single currency in the next three years had increased considerably.

"It will be a yes, with conditions to joining, not a no, we're never doing it,' said one source.

The opportunity of having a referendum before the end of the parliament will be left "very much open," the source said, disappointing some government officials who had briefed that it was likely that one of the biggest decisions facing the country would be put off for a decade.

In the highly significant move, Blair will launch a vigorous campaign on the virtues of the euro once the tests have been announced, a clear sign that he expects a referendum either towards the end of this parliament or in the first year of the next.

That would give a likely referendum date on joining the euro of 2005 or 2006.

"We've had a period of rapid convergence between the economy and those of our neighbors in Europe," said another source in Blair's inner circle. "The question is now about sustaining that convergence and how we test that, that is what we are looking at."

It is now clear that Blair and the Chancellor of the Exchequer, Gordon Brown, are close to agreeing a form of words which will give a firm push towards setting a date for entry.

Although joining will be ruled out "for the time being," it will be made clear that convergence, the key test of whether Britain could sustain the euro, is progressing rapidly.

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