Question: What impact would a no vote from the Swedes in their referendum have on the EU?

Denis MacShane: Sweden is an important European country. It has a population of seven million.

As in other European states, like Ireland or Denmark when people have voted no to this or that aspect of European development everybody will take stock but we are moving to an enlarged European Union of over 400 million people and most of them either use the euro or the incoming members states want to use the euro, so I don't think it will have a big impact.

Question: And how will the Swedes' decision affect the UK's euro decision?

Denis MacShane:Well, let's also wait and see what the outcome of the referendum is in a fortnight, I think it's probably better to see what the Swedes decide. But again, I've always argued that the British decision depends on British economic factors, undoubtedly those who are very keen to enter the euro will say hooray if there is a yes vote, and those who want to keep Britain out of the euro will no doubt be cheered up if there is a no vote. But in a couple of months time from the Swedish referendum I don't think it will be a major issue for Britain.

Question: What happened to the government's summer euro roadshow?

Denis MacShane:Well, I and other ministers have been out making the case for the euro generally because there's much more to Europe than the euro. What we've now got is a big political divide in Britain because the Conservative party under Iain Duncan Smith, Michael Howard and Bill Cash are saying 'never' to the euro, 'no' to the constitutional treaty which is necessary to make EU enlargement work, and most sadly of all, some of Iain Duncan Smith's top aides have been in parts of East Europe campaigning against the completion of the EU by urging people in Estonia to vote 'no', which of course would stop the whole enlargement process. So I think the political case for being in the European Union should be made very vigorously by ministers.

Question: But a number of MPs claim that the prime minister and the chancellor said they would take the campaign on the euro to the country, in what the chancellor specifically described as a 'roadshow', and they were expecting the prime minister and the chancellor to be involved in that. Why didn't that happen?

Denis MacShane: Well, I think even the most pro-European of my colleagues might occasionally look at the newspapers this summer, including the whole of the summer holidays, and accept there have been one or two other both political, governmental and news priorities.

The prime minister made a first rate speech on the advantages of joining the euro when he was in Tokyo, which I distributed to all ministers and to other colleagues, but it happened on one of the news days when news was completely dominated by the tragedy of David Kelly's death.

Question: But it's something you expect the prime minister and chancellor to do in the future weeks and months?

Denis MacShane:I think we're now at a turning point in British politics when after the chancellor's statement on June 9, the question of joining the euro becomes when not if, that the case should be put forward very forcefully by the prime minister and the chancellor of the advantages to Britain for joining the euro once the economic conditions are met, and I think all ministers and all MPs who have a regard for the national interest - it can go beyond the Labour Party in government - have got to defeat the anti-European and isolationist politics that we're now seeing from the leadership of the Conservative party.

Question: Many pro-euro campaigners argue the government should be making a more forceful case for the euro - how do you answer that criticism?

Denis MacShane:I have got articles that can go into every newspaper in the country tomorrow, I'm prepared to go on television every night to make the case for Europe, but there is a curious problem that our national media have got their own news agenda, and of course a significant part of the media are anti-European and even some of the newspapers who are culturally pro-Europe are very hostile to an honest discussion on the euro.

Question: You show a strong commitment to the euro there, does the prime minister share that commitment?

Denis MacShane:Well, I won't speak for the prime minister, but I think anybody who's known Tony Blair, anybody who's looked at any of his speeches on Europe since he became prime minister will see a man who understands the necessity for Britain to be in Europe and helping to run Europe, a man who's very comfortable with the new enlarged European Union in which I firmly believe Britain can play a major leadership role, and a man who understands for Britain to remain isolated in eternity from a currency that 250 million Europeans are using, which banks and businesses are finding a great aide to market competitiveness, for Britain to say never to the euro like the Tories, would be a huge mistake.

Question: What role is the UK playing with the 10 accession members to settle them into the EU?

Denis MacShane:Well, we're working on three levels with the new EU members. Firstly, it was Tony Blair that led the campaign within the EU of 15 to make 2004 the date for accession, and we've achieved that key British strategic objective. Secondly, we have helped very considerably in sendingtechnical experts, civil servants to work in equivalent ministries in the incoming member states' capitals as advisers in order to prepare for EU membership. And thirdly, I've spent more time travelling in the accession member states than I have in the existing member states, simply to remind them of Britain's desire to be a good friend and partner.

They are all independent sovereign states but we are very, very present politically, economically in the incoming member states to argue that their accession to the EU is very important not just for themselves but for us, and for sending a message to all the neighbours of the EU that the road to Europe is the road to take, and sending a wider message to the world that breaking down nationalist barriers, protectionist barriers, sharing sovereignty and being an effective force for partnership is actually a very good way of making the twenty first century successful.

Question: What more could the EU be doing to make accession as smooth as possible?

Denis MacShane:Well, I think that the EU in a sense in the European Commission and the Council has accepted the lead that Britain's given and although two or three years ago there were concerns that there might be some resistance from some member states that get a lot from the agricultural policy funds or structural regional funds which now have to be shared out more equitably. These fears didn't result in any blockage of the accession.

The big concern remains, of course, anti-Europeanism among some right-wing parties which have tried to stop or obtain no votes in EU referendums, and sadly the Conservative party is in there with the anti-European right on that case. I think now what we need to see is successful completion of the constitutional treaty, which is the new rulebook for Europe, to allow the Europe of 25 to function and I think we're a long way down that road. The next big question is, of course, to be reform of EU finances so that the EU budget helps the people who really need it rather than the agricultural protectionism of CAP.

Question: What will be the key EU priorities once we have this enlarged EU?

Denis MacShane:The most important policy priority, certainly, is to get Europe's economy going again. When you look at the big European economies, which now are either close to or technically in recession, which are buffeting through increasing public debts, which is a very unsound way of financing the modern economy, and which aren't yet adopting the policies pursued by this government or recommended by the Sapier report in order to get job creation going again. Clearly, the incoming states would prefer to join a thriving, growing, economically robust and dynamic European Union. We will continue to make the case for economic reform because we also think that's in the interests of the Poles and the Czechs.

Question: What happens if you fail to get that economic reform?

Denis MacShane:Oh we will get it and there's a will to get it through. We're seeing changes certainly in Germany, we're seeing the French government undertaking significant economic reforms, we're now living in a global economy, of course, so much hinges of course on how the American economy performs but Europe has now got, I think, a new generation of leaders that are beginning to listen to the constant message from the Labour government in recent years, that a Europe which doesn't embrace economic reform is a Europe which will not succeed economically as well as politically on the world stage.

Question: Following the Iraq war, how is the government building bridges with other EU members?

Denis MacShane:The divisions over Iraq are well known, and I think most people want to put those divisions in the file marked 'for historical examination later'.

We have got a strong commitment over the summer, the meetings in Evian, the G8 meetings, the European summit in Greece, particularly from Germany, France and Britain to consult, to coordinate and cooperate much better and I think that the big decisions that lie ahead of us, particularly on the successful completion of intergovernmental conference and the new rulebook for Europe, will see, I think much more alignment between Britain and certainly some of the countries that took a different position in the Iraq crisis.

Question: How long will it take for EU relations to get to the pre-war status?

Denis MacShane:Well, we've got - there are 25 member states of the European Union, they both cooperate and share common decision making, but each of the 25 member states, both in terms of individual elected governments and the people within the states, have got different positions on different international issues. And I actually welcome that, I think Europe's got to be built on the strength of its diversity. The last thing one wants is a homogenous, one-size-fits-all Europe and that will include different perspectives on foreign policy issues. But I think everybody's taken a big breath after the divisions prior to military conflict.

From the UK's point of view, we want more European involvement in the reconstruction of Iraq and that's a government position that I think brings us closer to some of the European partners who weren't prepared to back the UN resolution in recent months.

Question: People have been coming back from holiday, where they have been using the euro. How do you think people view using the euro in the UK?

Denis MacShane:Well, I've been on holiday myself in France and Italy and everybody uses the euro there just completely normally. It hasn't been a loss of French or Italian identity, or sense of sovereignty.

They're both very different economies, they've got different approaches and that's how it should be and I think, I hope people will realise that what the euro is is simply a unit of value, it allows complete transparency in business transactions so everybody can see the common cost of anything whether buying as an individual or as an importer or as an investor and bit by bit the extremism of the anti-euro campaigning in Britain, some sections of the media and the political class, will be seen for what it is, a kind of isolationist ideology and that Britain will whether we use the euro or the pound, we will prosper if we've got good economic policies, good labour market policies, good employment record and we remain very, very attractive to inward investment and that's my biggest worry, if everybody in Asia and the United States gets the feeling that Britain is going to say never to the euro, then why on earth should they come and invest here, when there's a lot of Eastern European countries soon to join the euro with low labour costs, great for inward investment. We've got to keep Britain's competitive edge. We'll only do that if the rest of the world thinks Britain is 100 per cent committed to being in Europe, and when economic conditions are right, joining the single currency.

Question: More shops are accepting euros, would you like to see that trend increased so British people can get more used to using euros?

Denis MacShane:Well, I think people are comfortable using the euro abroad. I was rather surprised, I literally this morning came in on a flight from the continent and I was in the gents while waiting for my luggage at Gatwick , and there was a Thomas Cook advert saying we'll take your liras, marks, pesetas and francs and give you the best rate. And I thought, 'My God, if Thomas Cook doesn't know all those countries use the euro what hope is there for the British public?'