The Telegraph
Since 1st March, 1999
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Britain springs euro surprise

London, June 9 (Reuters): Britain ruled out joining the euro for now but surprised critics today by saying it may take another look at the divisive currency debate next year.

Chancellor of the exchequer Gordon Brown told parliament Britain would not benefit at the moment from adopting the EU single currency, saying four of the five tests he set in 1997 had not been met. But in surprisingly enthusiastic comments, he also outlined the government’s vision in principle for signing up at a future date to the currency already adopted by 12 of the 15 EU members.

“Membership in a successful single currency would be a benefit to the British people as well as to Europe,” Brown said. “It is a decision of far-reaching consequence, indeed — because it is irreversible — one of the most momentous economic decisions our country has to take.”

Brown’s long-awaited verdict means the pound, in place since Anglo-Saxon times, will survive for now while Britain’s soul-searching over Europe continues. British wariness about tying ever closer into the Europe has a long history and the powerful finance minister is viewed as cautious.

But he said the economic case for switching currencies would be re-examined early next year and, if positive, would lead to a referendum.

In the meantime, Brown will actively pursue reforms to try and make Britain better fitted to the euro club. “In short, if the economics are right for Britain, we should join,” he said.

“The government’s view is that if the economic case is clear and unambiguous, then the constitutional issue, while a factor in the decision, should not be a bar to entry,” Brown said.

Brown and Prime Minister Tony Blair were to give a joint news conference tomorrow to hammer home that message and quash speculation of differences between them.

Critics said the euro verdict was a mish-mash of Brown’s fear of wrecking his domestic economic record and Prime Minister Tony Blair’s belief Britain belongs at the heart of Europe.

If it does go to a referendum, the government would face a hard battle convincing a sceptical public.

Polls show two-thirds of Britons want to keep their pound, fearing an erosion of sovereignty without it.

Studies released by the British treasury earlier today highlighted the key obstacles to Britain joining the euro now.

Running to over 1,700 pages, they said Britain’s housing market made it more sensitive to interest rate changes and that progress on labour market flexibility in the EU lagged the UK and had been slow to pick up.

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