Britain bars publicity campaign for 'Euro'

SARAH HELM

Brussels

Fearing a new eruption of controversy over monetary union, the Government has blocked the European Commission from extending its single-currency publicity campaign to Britain.

As European leaders arrived in Brussels to inaugurate the publicity drive, the Commission conceded it would not now be able to carry out its programme in Britain, due to the refusal of the Government to co-operate.

Last week David Davis, the Foreign Office Minister, wrote to Jacques Santer, President of the European Commission, warning against any Commission- backed campaign in Britain.

Kenneth Clarke, the Chancellor, meeting finance ministers in Brussels yesterday, said it would be unwise to launch the single-currency campaign in Britain until there was greater certainty about monetary union and an atmosphere of "calm". However, Mr Clarke, who paid a lightning visit to the opening conference of the campaign, struck a far more positive note than his Euro-sceptic colleagues about the need to inform the British public "sooner or later".

"I have always said we need an informed debate in the UK," said Mr Clarke, who stuck by his assertion last month that there is a 60-40 chance that monetary union will happen. "A Commission campaign ... is not at the present stage the best way of taking the matter forward. Sooner or later it is obvious the more we have an informed debate the better."

The Commission had anticipated a cool response from Britain to its single currency publicity proposals. Officials attempted to play down the seriousness of the snub yesterday. The publicity campaign was always intended to be conducted "in co-operation" with the member-states, they said. However, it is clear that Commission plans for television advertising and widescale public conferences will be scaled down - and not solely because of British objections.

Given the uncertainty about whether the 1999 launch of monetary union can be achieved, several other governments are back-pedalling. German leaders were markedly absent from yesterday's publicity launch; the entire atmosphere of the first-day conference was low-key.

A poll published yesterday by the Commission to coincide with the launch indicated that more people in the EU are in favour of the single currency since the decision was made in December to call it the Euro. A survey suggested that 47 per cent of Europeans are in favour of the new currency; 37 per cent are against.

During the finance ministers' discussion yesterday ministers made their first attempt of the year to sharpen the focus of the single-currency debate. There are growing signs that the Italian government, which holds the EU presidency for the first half of the year, may be distracted by domestic turmoil and unable to provide a clear lead.

The ministers sought, however, to revive confidence in European economies, insisting that gloomy figures released last week represented a "pause" in economic growth, "not a slow-down''.

Mr Clarke set out Britain's agenda for the coming months, repeating the Prime Minister's insistence that priority must be given to studying the relationship between currencies which join monetary union in 1999 and those which stay outside.

In a four-point letter to Lamberto Dini, the Italian Prime Minister and Finance Minister, Mr Clarke has called for reassurances from its partners that countries which do not join the single currency at the launch will be able to join, without penalties, at a later stage.

The letter appears to indicate new fears within the Treasury that if Britain does stand outside at first, it may find itself permanently excluded from an inner core of EU countries. Those that chose to join EMU later must be able to do so "on the same terms as the others," said Mr Clarke yesterday.