Blair seeks to slow EU integration

Jacques Chirac and Gerhard Schroeder leading integration calls

By BBC News Online's political correspondent Nick Assinder.

It is a law of politics that whenever the presidency of the EU is taken over by Germany or, as is now the case, France, there will be rows over the pace of European integration.

The "big two" have a habit of working together to push forward the integrationist agenda, and Britain is usually leading those countries trying to apply the brakes.

The latest outbreak has seen French President Jacques Chirac apparently piling on the pressure by suggesting that a "pioneer group" of EU states should get on with the job of forging closer political union while the rest - including Britain - are left on the sidelines.

Gordon Brown is cool on the euro

Meanwhile, Britain is also coming under increasing pressure from its EU allies to make a clear statement of intent about joining the single currency.

Every utterance by ministers is trawled over for signs of cabinet splits on the issue or hints that a timetable for British entry is being mapped out.

Federalist route

What Mr Blair fears is that, with France in the EU driving seat, the old Franco-German alliance will again move into top gear and start steering the union down the federalist route.

Neither country says it wants to create a European superstate, but many simply do not believe them.

They argue that moves towards political integration - with a written constitution, a single currency and, amongst other things, common foreign, defence and taxation policies - will inevitably see the creation of a United States of Europe.

Others, however, insist the federalist agenda is in retreat and the more flexible approach pioneered by Britain is now the dominant force.

They also point out that the enlargement of the EU from 15 to 28 - with a first wave to include Romania, Bulgaria, Slovakia, Latvia, Malta and Lithuania - will inevitably slow down integration.

Tony Blair has a fight on his hands

That is why Mr Blair is eager to become the champion for enlargement, seeing it as a way of combating those trying to force the pace.

The counter argument, put by France, is that enlargement actually makes it more vital that an inner core, or the avant-garde as they like to call themselves, pushes ahead to ensure the EU does not stagnate.

Many of these issues will come to a head during the six-month French presidency and at the Nice summit in December - and Mr Blair has a formidable task on his hands.

Top of the agenda is the notion of a two-tier Europe, which has raised its head numerous times over the past few years and has been revived by President Chirac.

The government is implacably opposed to such a notion and will do everything in its power to stop it happening.

Mr Blair, with the backing of the Scandinavians and others, wants a Europe of equal nation states without a small group running ahead of the rest.

Second class

His job is to dissuade France and Germany from persisting with the two-tier approach.

He will argue that it would be impractical to press ahead with greater integration while other countries are poised to join the EU.

If a small group pushed ahead, the incomers would be treated like second class citizens, he will argue.

The other major issue dogging the government is its approach to the single currency.

There are clear signs of a cabinet rift over the issue, with enthusiasts like Robin Cook and Stephen Byers wanting to push a positive campaign to prepare voters for a "yes" vote in a post-election referendum.

Others, led by Chancellor Gordon Brown, are more cautious and want to say little about the euro during the election campaign for fear of losing votes over the issue.

The government policy is clear, and regularly spelled out by Mr Blair and Mr Brown.

A Labour government will hold a referendum on entry into the euro early in the next parliament, if five economic criteria have been 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?

Blair will lead

Once those criteria have been met, the cabinet will have to agree to a referendum.

Mr Blair has recently said that, once a cabinet decision in favour of joining had been taken, he would lead the campaign for a "yes" vote.

Meanwhile, the prime minister is also facing a battle over French plans to strengthen the role of the so-called euro-11 - the group of euroland finance ministers - at the expense of Ecofin, the body which includes all EU finance ministers.

If France succeeds, it would severely limit Britain's influence within the EU - until it joined the euro.

Much of what is happening at the moment is the normal elbowing and jostling that happens under a new EU presidency - particularly when it is held by one of the big two.

But Mr Blair is also painfully aware that these issues will come to a head with, possibly, only months to go before the next general election.