Blair Moves Closer To European Single Currency

By Mike Wendling | July 7, 2008 | 8:10 PM EDT

London ( - British Prime Minister Tony Blair is urging greater cooperation with the European Union, hinting that his administration may move for a referendum on joining the single European currency.

Blair's comments came as French and German leaders called for an E.U. constitution and more support for continental police and military forces in a declaration released over the weekend.

In a speech Friday to the European Research Institute in Birmingham, England's second city, Blair linked the war on terror to a need for greater international collaboration.

"Europe is in Britain's international security interest. The events of September 11 showed the vulnerability of our democratic way of life," Blair said. "No single country, even one as powerful as the United States, can defend those democratic values alone."

During the speech, Blair called Britain's relationship with Europe since World War II a "history of missed opportunities"

"It is time for us to adjust to the facts. Britain's future is in Europe," the prime minister said. "Nearly 60 percent of British trade is with the rest of Europe. Our membership of the E.U. is crucial to attracting foreign direct investment to the U.K. -- most of the companies investing need a viable E.U. export market."

The European single currency, the euro, will become legal tender in 12 countries on January 1. Britain is one of three nations that chose to opt out of the system.

The Blair government has repeatedly said that Britain would not consider joining the single currency until five key economic tests have been met. The tests include questions about the euro's effect on investment, the financial services industry, the U.K. business cycle, economic flexibility, growth and job creation.

Blair has also promised to put the euro to a nationwide referendum if the conditions are achieved. The government insisted that Blair's speech Friday was not a change in government policy towards the single currency, but the prime minister downplayed sovereignty and legal issues during his speech.

"If economic tests are met, political or constitutional barriers should not prevent us joining. And of course the final decision rests with the people in a referendum," Blair said.

Anti-euro politicians criticized Blair's comments. A Labour M.P. and member of anti-euro pressure group "no", Ian Davidson, said that single currency membership would put an end to Britain's economic progress.

"We do not have to join the euro to be a constructive and influential member of the E.U.," Davidson said. "Locking into the euro would lead to a loss of economic control and take us back to boom and bust, which we've worked so hard to overcome."

The "no" campaign said Monday that polls indicate the British public is largely opposed to introducing the single currency in the U.K.

Chancellor cautious

Although Chancellor (Treasury Secretary) Gordon Brown is thought to be more cautious on entry to the common currency than Blair, other government ministers have been supporting the prime minister's internationalist rhetoric. Last Thursday, Foreign Secretary Jack Straw called for a new debate on sovereignty and independence in a letter to a British newspaper.

"In a world where states and the interests of their citizens are so obviously interdependent, we need to rethink our attitudes to concepts like 'independence' and 'sovereignty,'" Straw wrote in The Independent. "By sharing sovereignty, a people may end up with more, not less, independence of action."

The foreign secretary contended in his article that concerns voiced by "euroskeptic" politicians and activists were misguided.

"Closer co-operation with our friends and closest neighbours in Europe is an essential safeguard as much for our security as our prosperity," Straw wrote. "The European Union does not threaten our independence, our sovereignty or our identity."

European constitution

In a joint declaration Friday, French President Jacques Chirac and German Chancellor Gerhard Schroeder issued a statement backing a common EU constitution. Schroeder has advocated that such a document be legally binding on all EU members.

The leaders also urged the creation of a European Border Police, the beefing up of continental police agency Europol, the creation of a continent-wide arrest warrant, and greater economic cooperation among EU members. Also high on the list of priorities is the creation of a common European defense force. Chirac and Schroeder would like such a force to be used in the fight against terrorism.

In their statement, the two leaders said that a written constitution would be "an essential step in the historical process of European integration."

The joint statement and Blair's speech angered Conservative Party leaders. In a statement, Tory foreign affairs spokesman Michael Ancram accused Blair of political opportunism.

"The truth behind all this is that Blair's European superpower agenda is on course, and he is determined to lead it," Ancram said in a statement. "Astonishingly he is seeking to use the current international crisis as the vehicle to promote it."