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EU: Schroeder Urges British Decision On Euro

London, 4 November 1998 (RFE/RL) -- Germany's new Chancellor Gerhard Schroeder has urged greater British involvement in the European Union, saying the Labor Government of Tony Blair should decide soon whether to join the single EU currency due to be launched in two months' time.

Schroeder made the appeal on Monday (Nov. 2) during talks with Blair in London, his first official visit outside Germany since he was confirmed as chancellor by the Bundestag last week. Later, in an address to British businessmen, Schroeder spoke of the constructive role being played by the Blair government in Europe, but said he looked forward to Britain joining the new "euro-zone."

At a joint news conference, Blair said that the future of Europe and monetary union topped the agenda in their talks, which he described as "excellent. Blair said, "We discussed in our talks with each other a whole range of different issues, the future of Europe and monetary union, obviously, global finance and the statement of the G7 finance ministers of a few days ago, Kosovo and Iraq."

The European single currency, the euro, is one of the biggest EU projects to be attempted since the founding Treaty of Rome. Eleven EU countries will join the euro's launch, creating a single currency zone of 300 million people.

Britain, long criticized for being only reluctantly European, has chosen to wait to see if the ambitious monetary experiment works. Sweden, Denmark and Greece will also stay on the sidelines for the time being.

Both Schroeder and Spain's Prime Minister Jose Maria Aznar told the Confederation of British Industry yesterday that EU growth and stability will be helped by a firm decision by Britain to join in the deeper integration of the Union's 15 economies.

The Blair government has pledged to hold a referendum before deciding whether to scrap the pound and join the euro. A majority of British business is in favor, but critics say monetary union will lead to a loss of sovereignty by national governments.

The German and Spanish leaders were told by one British businessman yesterday that there are three possible outcomes. The euro will succeed over time; it will work for other countries but not Britain, because of historic differences; or it will fail because there is insufficient political will to overcome national self-interest.

Aside from the euro, Schroeder and Blair agreed to set up a working group to explore practical ways for left-of-center governments to reconcile market efficiency with social justice. Blair calls his approach the Third Way, Schroeder the Neue Mittel (New Center).

Schroeder emphasized the common elements in the thinking of the British and German governments. He said, "I find it just as noteworthy as Prime Minister Blair does that we want to deal together with the issue that concerns Europe --how do you succeed in building a modern economy without giving (too little attention) to social justice."

Blair said the new working group, which will function outside traditional diplomatic channels, will look at how both countries can, in Blair's phrase, "learn from each other" in implementing left-of-center policies. He said, "They will look as to how we can combine levels of social justice and a highly competitive economy in the modern world."

This will mean, apparently, exchanging ideas about how to tackle problems such as efficiency, productivity, social exclusion, education and training. With the new Social Democrat-Green coalition government in Bonn, 11 of the 15 EU states are now led from the center-left --an opportunity both leaders clearly want to exploit.

Schroeder and Blair also stressed that what is obviously an improving Anglo-German relationship will not be at the expense of the traditionally strong Bonn-Paris axis. Schroeder, who first visited Paris and Washington after his election triumph, told journalists that he does "not think in terms of geometrical constructions."