Blair: No two-speed Europe

Blair and Schroeder: slow and fast integration?

Prime Minister Tony Blair has met German Chancellor Gerhard Schroeder to warn that the UK will not accept a two-speed Europe.

The two leaders met near Berlin for a private dinner, where Mr Blair stressed that Britain wanted to be part of a single European currency in principle, but that economic conditions had to be met.

We should be full players in Europe

Tony Blair

On Tuesday, French President Jacques Chirac told the German parliament he wanted their two countries to lead a vanguard of nations towards deeper political union.

His backing for a "two-tier" Europe threw the pressure back on Mr Blair to assert his role as an influential player in the EU's development.

Further pressure has come from Nissan boss Carlos Ghosn, who has warned the UK that future investment at its Sunderland plant is in jeopardy because of the strength of the pound against the euro.

Mr Blair said before the meeting: "Being part of the European Union is good for Britain, it is good for British jobs, it is good for British people. We should be full players in Europe."

President Chirac tells the Bundestag of his vision

A spokesman for Mr Blair said issues raised would include the enlargement and reform of the EU, the forthcoming French presidency, moves towards a more flexible Europe, Russia, the Middle East and China.

The prime minister's spokesman said that Mr Blair was not worried by Mr Chirac's remarks.

He said the UK, France and Germany saw eye-to-eye on European integration and that a superstate was not on the agenda.

'Outmanoeuvred'

Conservative leader William Hague said the talks showed that Mr Blair was in a panic - he had lost control of events and was being "outmanoeuvred by France and Germany".

Mr Hague said the federalists in Europe had set out their agenda and the Conservatives had laid out their plans.

"Only the prime minister does not know which way to turn. He always bears the impression of the last person who sat on him at the European negotiations. Let us hope it is going to be different when he goes to Berlin," he said.

'Unholy alliance'

UK Foreign Secretary Robin Cook said the EU had to be a "Europe of member states who are equal member states.

"That is why we find it very worrying the way in which there is an unholy alliance between some federalists in Europe and the euro-sceptics in the Conservative Party who seem to be prepared to go along with this as long as Britain remains in the outer rim."

Mr Blair said: "In principle we want Britain to be part of a successful single European currency, but the economic conditions have to be met."

The questions that have to be answered are:

• Would joining the euro create better conditions for firms making long-term decisions to invest in the United Kingdom?
• How would adopting the single currency affect our financial services?
• Are business cycles and economic structures compatible so that we and others in Europe could live comfortably with euro interest rates on a permanent basis?
• If problems do emerge, is there sufficient flexibility to deal with them?
• Will joining EMU help to promote higher growth, stability and a lasting increase in jobs?

If the conditions were met, there would have to be cabinet agreement and a referendum.

Meanwhile, Downing Street dismissed a report that a minister had said the UK could join the euro sooner than expected.

Number 10 released an British Embassy transcript of the interview Helen Liddell gave to a German newspaper in which the words did not appear.