Europe: All smiles as Britain takes Euro-reins

Tony Blair yesterday kicked off Britain's European presidency with a pledge to be a constructive `honest broker' in launch preparations for the single currency. But as Rupert Cornwell explains, awkward issues ranging from Turkey to the EU beef-ban could yet spoil the Prime Minister's Euro-show.

It was the traditional beaming start for an EU presidency, only more so - the descent en masse of the 20-man European Commission into the new incumbent's capital to map out the six months ahead, but spiced this time by the undisguised delight of the Commission President, Jacques Santer, that he would be dealing not with Eurosceptic Tories, but with a new, keen Labour Government.

At a joint press conference, Mr Blair and Mr Santer, already on "Jacques" and "Tony" terms, gushed with quite sincere mutual enthusiasm. How "refreshing and appreciated" was Britain's new-found spirit of co-operation, Mr Santer said, and its desire to show how Europe could improve the lives of ordinary people.

The Prime Minister responded in similar vein. It was "a privilege" to take on the presidency at a moment when the EU would embark on two crucial steps: enlargement to the East, and the final preparations for the single currency. Although Britain was not joining in the first wave, it would be an honest broker, playing a "good constructive role" in the launch of the euro.

But as Britain gets into the daily business of the presidency, the smiles could soon fade. Both men stressed the urgency of improving the EU's fraught relations with Turkey, already threatening major trouble for the accession of Cyprus to the Union, and which could complicate efforts to find a solution to the Kurdish refugee crisis.

The EU's failure to lift its 21-month ban on British beef exports is a separate irritant. Progress had been "far slower than I'd like," Mr Blair said, adding that "if science was the test, we should get some action and improvement. But he warned, "it would be unwise to be over-optimistic".

During the presidency, Mr Blair and the other Cabinet ministers who chair EU meetings are supposed to be neutral, leaving the national interest to be defended by more junior officials occupying the normal British seat.

But this may not prevent friction between Labour's deregulatory, "welfare- to-work" philosophy and the interventionist, statist, instincts of continental Europe.

On the single currency, however, not a word was breathed yesterday about last month's row over Britain's exclusion from the "Euro-X" club of countries which sign up for the euro.

But even from the sidelines, the Tories still snipe. In remarks that can only have intensified Mr Santer's relief at the change of guard in Downing Street, William Hague last night stepped up his campaign of hostility to the single currency, urging Mr Blair to block unprepared EU members from joining the euro.

In a speech to Teignbridge Tories, he said: "Britain is at the helm for the next six months ... For a prime minister far more interested in doing what is popular rather than what is right, it will mean hard choices."