Why do Blair and Hague fall silent when the talk turns to Europe?

A PROXY war is being fought out in Britain with the most potent of invisible weapons: disinformation, propaganda, and blood-curdling war-cries. The debate about Britain's place in or out of the single currency zone is becoming a screaming match between two camps, each deaf to the arguments of the other.

Only the main political figures remain silent. Mr Blair mutely avoids committing himself to a firm intention, beyond general goodwill towards economic and monetary union. From this Government's first collision with the subject, when Mr Brown had to make a Commons statement in response to contradictory leaks by his aides to The Times and Financial Times, the roles of media and politicians have been reversed. The newspapers define the pace and parameters of the debate while our elected representatives belatedly respond to their promptings

Mr Brown promised yesterday to veto the same tax harmonisation he had agreed to embrace in principle two weeks ago when he helped draw up The New European Way - the most integrationist document in the EU/EEC's recent history. He did so in response to the "Her Majesty's unofficial Opposition on all questions European" - The Sun - which claimed that there were plans to increase the amount of VAT on children's clothes as part of the drive towards tax harmonisation.

In the manner of Linda Evangelista, the Chancellor does not get out of bed for the ten-past-eight slot these days unless The Sun demands that he should. He would have no call to set the alarm early on account of the Conservative Party.

Where is the William Hague who won the leadership against Ken Clarke largely because he was a Eurosceptic and Mr Clarke was not? Mr Hague then risked a divisive party ballot on the matter and won it. His troops on the ground were ready for the next full-frontal assault on the euro. Since then, the trenches have been eerily quiet. The party which has staked its future on opposition to a single currency is making no impact on the debate whatsoever. The Sun's engaging editor, David Yelland, is turning into the best Eurosceptic leader the Tories never had.

True, Mr Hague sometimes has difficulty making himself heard above the din of people agreeing that he is irrelevant. But if he can't make himself heard on the propensity of EMU to produce a currency manipulated by shifting political interests, accelerate integration beyond the tempo at which most citizens on the continent feel happy, and launch Britain on a slide towards unaccountable policies and some murky long-term revenue-raising schemes, then he shouldn't be in this game at all.

The Sun's story raised awareness of tumult beneath the deceptively smooth surface of events. "Youch," cry the EMU-philes. "What base disinformation. Entering the single currency will not result in higher taxes and even if it does, not very much, and not for a long time." Of course, they cannot know this. Electorates are right to be distrustful of politicians - their own and other peoples' - on tax.

"We will use the veto to control any unwelcome consequences of the euro to which we, or The Sun, objects," continue the euro defenders. This would have sounded more reassuring had Chancellor Schroder not purposefully inquired last week "whether the use of national vetoes should be limited in EU decision making". Can Mr Brown tell us how he intends to resist unwelcome impositions from the EU once his veto has been vetoed?

In vain, the EMU-philes have implored Mr Blair to out himself as a passionate crusader for a single currency. But Mr Blair is neither an EMU-phile nor an EMU-sceptic. He could, in different circumstances, be either. In present ones, he has chosen to go along with the project, but left himself a fire- escape by refusing to make a complete and unconditional commitment to entry.

Now, however, his tactical position is far more difficult than Messrs Clarke, Howe and Hattersley acknowledged when they pleaded in Monday's The Independent for the Government to commit more clearly to British entry. How definite these politicians become when they are no longer in office. I remember asking Mr Clarke when he was Chancellor which day he would name for entering the single currency, given that he was so keen on the idea. "That's a minxy little question," he replied, which hardly amounted to enlightenment.

For Mr Blair to specify an intended entry date to a single currency would mean taking on the full brunt of debate about the euro's risks before it is launched, and when its terms are looking most vulnerable. The New European Way asserts a continental, left-wing approach to economic management that is wholly at odds with his belief in the tight control of national finances and retreat from statist, high-spending solutions to the problems of globalisation.

The very nature of the single currency is shifting before his eyes and a true moderniser cannot much like its mutated form. A political project was given a veneer of economic solidity in order to convince the sceptical and rich countries of northern Europe to go along with a scheme whose outstanding benefits are to Germany politically, to France economically and to the countries of the south who crave the centralised discipline the euro imposes.

The changes in German politics and the pressure on an SPD-led government to tackle unemployment fast has revealed the reality. Oskar Lafontaine is not alone in desiring that the central bankers back off and allow politicians to dilute the strict criteria imposed on the euro by the Maastricht Treaty. Most of the SPD and related left-of-centre continental parties feel the same way.

As much as Mr Blair enjoys companionable chats with Social Democrat leaders in the EU, he has reason to be nervous about the impact of their new dominance of the institution. He would have far fewer qualms about selling to the British public a single currency guaranteed by hatchet-faced central bankers (whom one could rail about from time to time), than one open to the baleful influence of Herr Lafontaine, who believes that governments must spend money to cure joblessness, rather than tackle the structural causes of the malaise.

Mr Blair's carefully balanced policy of approaching EMU by stealth has been blown apart. By raising the subject of tax harmonisation, his European partners have done a valuable service to the sceptical tendency. They have revealed a truth, one kept fastidiously veiled down the years. Economic and monetary union always was a political project. It will demand ever greater integration of national expenditure and revenue between the participating countries to keep the show on the road in difficult times. If you don't like the sound of this, don't vote for it - whenever they get round to asking you.