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Euro decision is economic insists aide

Joining the European single currency should be an economic decision, an aide to chancellor Gordon Brown said on Monday.

Chief economic advisor Ed Balls told the Royal Institute for International Affairs that the political climate should not influence the timing of a referendum and repeated the importance of the famous five economic tests.

"Too often over the last 100 years we have had decisions taken with a political imperative over economic reasons. We cannot let the short term political imperative override long term economic factors," he said.

His speech has been interpreted by opposition parties as a rejection of comments made by a number of senior politicians, including foreign secretary Jack Straw, who described the tests as ambiguous and said there would be a political element to the decision, and Europe minister Peter Hain, who called for an early ballot on the issue.

Eurosceptic environment secretary Margaret Beckett on Wednesday spoke out in favour of the single currency.

Speaking to the BBC Radio 4 Today programme ahead of her speech to the Britain in Europe campaign group, she said: "Perhaps slightly to my surprise, I have been, particularly over the last couple of years, extremely impressed by just how effective Europe can be when we work together as a united team."

However, former social security minister Frank Field said this was a possible attempt by government to soften public opposition to the Euro ahead of a vote.

"It is amazing that politicians are still talking as though we are a failure and have to go into Europe," he said.

The perception of an on-going spat over the vote, where the Treasury counters every pro-vote quote from Blair-supporters with one against, has been seized on by the Opposition parties.

Shadow chancellor Michael Howard claimed the government was "at sixes and sevens" over the euro.

"The government should stop playing games and stop acting out a good cop, bad cop routine with the British people," he said.

"If Labour think we should join the euro, they should say so and hold a referendum. If they do not, they should stop talking about it and concentrate on dealing with the crisis in public services which gets worse by the day."

Liberal Democrat leader Charles Kennedy called for a clear timetable for Britain's accession to the currency earlier on Monday.

The party's Treasury spokesman, Ed Davey, questioned whether Gordon Brown wanted the British economy to pass the economic tests at all.

"The tests are important, but what active steps are the chancellor and Mr Balls taking to prepare the British economy for them?" he said. "The truth appears to be that these tests are a convenient smokescreen. But the hesitation and prevarication surrounding them is clearly damaging UK industry."

An ICM poll for Business for Sterling has found a six point swing of public opinion, now with 55 per cent against the currency compared to 30 per cent in favour of it.

"Ed Balls is right - the government shouldn't take a huge risk with our jobs just because certain ministers want to join for political reasons," a spokesman for the campaign said.

"With unemployment in the euro zone almost twice the rate here, its going to be very difficult to sell the euro on its economic merits."

Published: Tue, 26 Feb 2002 00:00:00 GMT+00
Author: Sarah Southerton

"We cannot let the short term political imperative override long term economic factors," Balls said