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U.K.: Blair Begins Three-Week Cabinet Battle On Euro Referendum

Today marks the start of a three-week period of unprecedented "individual consultations" between British Prime Minister Tony Blair and his cabinet ministers. The matter they will be discussing is equally unprecedented -- a decision on whether to call a referendum on joining the single European currency.

London, 19 May 2003 (RFE/RL) -- British cabinet ministers spent the weekend studying a large, confidential dossier delivered to them on 16 May by the Treasury. The documents deal with the economic implications of the country's possible participation in the common European currency, the euro.

British Prime Minister Tony Blair and Chancellor of the Exchequer Gordon Brown are due today to begin individual consultations with ministers in an effort to make a collective decision on a possible euro referendum.

Blair has reportedly insisted on this approach because many Britons, and half the cabinet, seem reluctant to bid farewell to the British pound. The opposition Conservative Party has even changed its skeptical -- but up until now, ambiguous -- attitude toward the euro to one of open hostility. Conservative leader Ian Duncan Smith urged the government a week ago to let people decide on the common currency in a referendum.

"If Tony Blair believes that we should join the euro, if he chooses to prolong the uncertainty, if he chooses not to deal with our public services as his first priority, then he should say so. And get on with calling a referendum to find out exactly what the British people think," Smith said.

According to the three-week government countdown plan published on 16 May, individual consultations with ministers will be completed by 22 May, when the whole cabinet is expected to discuss the matter. By 26 May, all ministers should receive results of the Treasury's assessment of the so-called five "economic tests," or criteria of convergence of the British and euro-zone economies.

Another cabinet meeting is due in early June after Blair returns from Warsaw, St. Petersburg, and the G-8 summit in France and Parliament returns from recess. The goal of that meeting is to agree on a united stance. On 9 June, Brown is due to make an announcement about a referendum in Parliament.

Most experts believe Brown has already concluded that Britain is not yet in a position to join the euro. Blair and some of his cabinet's staunchly pro-euro colleagues argue, however, that next month's announcement must in no way rule out a referendum within the current Parliament.

Whether Brown -- who had insisted that the decision should be his and his alone -- can make such a concession is still uncertain.

Some British media claim that the fact that Blair has now effectively taken the matter out of Brown's hands by making it an all-cabinet responsibility confirms Blair's victory in a power struggle with Brown.

Others maintain that both share the same economic worries but that Blair needed to go public in order to bring his cabinet's pro-euro enthusiasts down to Earth.

Observers also agree that the unusual joint written statement, issued on 16 May and stressing that Blair and Brown are "united on the euro," did not appear convincing. "The Times" daily, for example, remarked, "The unprecedented statement confirmed how worried both men are about the issue's ability to tear the cabinet apart."

Brown's remarks over the weekend on BBC television ("Breakfast With Frost") did not clear the matter up. He stated that the government "has been in principle committed since 1997 to join the euro when the time is right," and that both he and Blair are of one mind.

So-called euroskeptics point to current problems with the management of the 12 diverse euro-zone economies -- for example, setting an interest rate that suits both low- and high-inflation economies. They also believe Britain should at least wait until her economic cycle is more in tune with that of the euro-zone, especially in view of the latest gloomy economic figures from France and Germany.

The optimists believe that -- apart from the advantages of a single market -- joining the euro-zone is in the interest of the further integration of the European Union and that, in the longer term, Britain could lose influence over European economic matters if it does not join.

Britons stopped on the street in an informal RFE/RL poll appear to be split on the issue. One young man told RFE/RL: "No, I don't think they should adopt [the euro]. And, secondly, we don't know enough about it yet for the exchange rate."

A mother of two teenage children sounded more enthusiastic: "Yes [they should adopt the euro], so that the exchange rate would be the same in every other European country, and also so that you will not have to exchange money to travel abroad. I would rather keep the pound so that we have our own currency. But obviously, if it has to change, then for those reasons -- if the exchange rate is the same everywhere -- then that's fine."

The father of a young child said he is strongly against the euro. "No, I don't think that it is a very good idea that we should be losing our identity," he said. "I don't think that we should be losing the British pound, and I would like a referendum."

Another man said he is also against adopting the euro. "There should be a referendum about it, and I think myself they should not change the pound. They should keep the pound," he said.

Surveys indicate most Britons feel that joining the European single currency would be premature at the moment. That is why most experts predict that on 9 June, Brown will announce "not yet" for now, and "maybe" later.