31 January 2001, 10:00 Blair reportedly in new economic policy row
LONDON (AFX) - Prime Minister Tony Blair was embroiled in an
embarrassing row over Europe last night after a high-ranking German
government official suggested that he had accepted the need to sign up
to a single European economic policy if Britain adopted the euro, the
Daily Telegraph reported.
It said the remarks, which led to frantic diplomatic exchanges
between Downing Street and the Chancellery in Berlin, were made during
a press briefing after Blair and Chancellor Gerhard Schroeder dined in
private on Monday night.
According to the newspaper, the German official implied that
Britain, which has opposed ending the right of individual European
Union nations to veto tax changes, would inevitably sign up to a common
economic policy after joining the euro. Once Britain was a single
currency member, it would then see the logic of a common economic
policy.
Those countries already in "euroland" felt that, "you cannot have
one without the other." The official said: "I could well imagine -- and
this was certainly not contradicted by the course of the dinner -- that
when Britain is in euroland, the basis for this linkage will become
clear."
The Daily Telegraph said his remarks caused consternation in
Downing Street because Blair is anxious in the run-up to an election to
play down the prospect of early British membership of the euro. The
Prime Minister's spokesman confirmed that there had been a brief
discussion of the euro, but denied that the Prime Minister had
discussed harmonising tax policies.
Blair was said to have restated the government's position: that it
was in favour of joining a successful single currency, provided the
economic tests set by Chancellor Gordon Brown were met. British
officials claimed that the German official was expressing his "personal
view" of what might happen if Britain joined the euro.
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