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Wednesday, 7 February, 2001, 18:42 GMT
Euro decision within two years of election
The timing was revealed at prime minister's questions
The UK Government expects to decide whether the economic conditions for Britain joining the euro are right within two years of the next general election, Prime Minister Tony Blair has said.

It is the first time such a timetable has been explicitly stated by the government - and comes as most predictions put the election date just a few months away.

Everyone knows your European policy is to keep the minister and dump the pound. Shouldn't your policy be to dump the minister and keep the pound?

William Hague to Tony Blair
Mr Blair's surprise declaration came during prime minister's questions as Conservative leader William Hague repeatedly challenged him over the government's euro timing.

The Tories later said the prime minister had passed a "two-year death sentence on the pound".

Mr Blair stressed that no assessment would be made on whether to recommend joining the euro in the first few months after the election.

It means Britons could be asked whether they want to join the European single currency in a referendum as early as this autumn.

MPs apparently had no inkling of the statement to come as Mr Hague opened the exchanges by saying: "The foreign secretary [Robin Cook] repeated this week that the government, if re-elected, would make an assessment on joining the euro early in the next parliament.

He asked the prime minister: "Does early mean in the first two years of that parliament?"

'Within two years'

At first Mr Blair replied: "Early in the next parliament means exactly what it says."

But as Tory MPs laughed he seemed to surprise them by adding: "Early in the next parliament would, of course, be within two years."

Mr Blair went on to insist that the important issue was meeting the economic tests.

"What is absurd is your position to rule out a single currency in principle, but only for one parliament," he told Mr Hague.

The Tory leader hit back with a reference to the speculation surrounding Europe Minister Keith Vaz, telling the prime minister: "Your European policy is like your minister for Europe - not trusted by anyone, giving no straight answers and half the cabinet wants to get rid of him."

Michael Portillo
Michael Portillo: 'Economic tests a sham'
Shadow chancellor Michael Portillo later told the BBC Mr Blair's comments meant that if Labour won the election "he intends to pass a two-year death sentence on the pound".

He said Labour would try and "rig" the outcome of the referendum by asking a loaded question and using millions in taxpayers' money for "propaganda".

"Because we know that the prime minster will try to rig the referendum it is the general election that will offer the last chance for the people of this country to vote to keep the pound - and they can do that by voting Conservative," Mr Portillo added.

The European Commission responded positively with a spokesman for Pedro Solbes - the EU Commissioner with responsibility for the euro - saying "the commission is always happy to see the enlargement of the euro area".

But he added that the final decision to join was for the British government and people.

Blair warned

Dominic Cummings, campaign director of anti-euro group Business for Sterling, said Mr Blair had confirmed "exactly what we have been saying - that he wants to join the euro and... he thinks he will win a referendum".

"But the battle will be harder than he thinks."

The prime minister's declaration is the firmest indication so far as to when Britons could expect a euro referendum.

If, as expected, the election is held in May this year, a poll on the euro then looks to be pencilled in for some time before spring 2003 - with summer 2002 the most likely period.

While the euro was launched as an electronic currency in 1999, euro notes and coins will be introduced in January 2002.

The BBC's Jonathan Beale
"Most of Europe is already getting ready for the new currency"
The BBC's Gutto Harri
"This was a surprisingly precise answer to a difficult question"
See also:

06 Feb 01 | UK Politics
Redwood backs EU renegotiation
01 Feb 01 | UK Politics
Cook plays down anti-euro poll
11 Dec 00 | Talking Politics
Nice summit: Q&A
13 Dec 00 | UK Politics
UK to block EU employee directive
11 Dec 00 | UK Politics
UK 'stronger' after Nice
11 Dec 00 | UK Politics
Hague attacks Nice deal
07 Feb 01 | UK Politics
Hague wants euro election campaign
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