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- guardian.co.uk, Sunday 1 December 2002 03.47 GMT
There may even be nights when Tony Blair dreams of being Prime Minister of Slovakia. The new entrants to the European Union are all gagging to join the single currency. If Mr Blair does not realise his ambition before the next election, it is entirely plausible that he will be in a minority of one among 25.
Such a chilly isolation is evidently haunting the Prime Minister. On Friday, he shared his burden with an audience in Cardiff. 'For each British Prime Minister, there is this dilemma: if we are anxious about Europe's development, is it best to hang back until the direction is clear, or is it best to participate fully in the hope of making the direction more our own?' Answering his own question, Mr Blair said he chose not 'to remain a straggler'; he wanted to be a full participant.
His agonised tone tells us that Mr Blair is as compelled as ever by the case for joining the euro - and simultaneously fearful that the forces of scepticism are overpowering him. I very much doubt that the Prime Minister of Sweden feels the need to open a window on his dilemmas in such a stark way. Mr Persson's advantage over Mr Blair is that the Swedish Prime Minister has a political and economic elite, a Cabinet and, most crucially, a Finance Minister, who all share his sense of where his country's destiny lies.
Gordon Brown's wariness about the single currency has never before been quite so nakedly displayed. There was nothing pro-euro about his pre-Budget report last week. As has become his habit, the Chancellor made the idea of joining the single currency sound like a joke. With lugubrious humour, he told the Commons: 'I can confirm that this year and each year in our forecast period we are well within the Maastricht criteria.'
The comedy in this reference to 'the Maastricht criteria' may not be immediately obvious to anyone who is not a protagonist in the euro debate. But the man sitting beside the Chancellor as he uttered this line could instantly spot the lurking double entendre. For the Prime Minister, this Brown joke has worn thin. When the Chancellor delivered his euro tease, a wan little smile flickered on the face of Tony Blair.
The Prime Minister had already endured listening to his Chancellor pour scorn on Europe's economic record. Mr Brown wanted to suggest that life on the Continent is hellish to make himself look wonderful. Though he will have understood that, Mr Blair must have been inwardly wincing as Mr Brown licked his lips over the miserable levels of growth and the mounting size of the deficits in France and Germany. Even more damaging to the case for the euro was the Chancellor's repeated suggestion that the British economy is currently more converged with that of North America.
This was combined with implicit derision of the way in which the single currency has been managed. The Chancellor boasted that his rules, unlike those which govern the euro, cope with both periods of high growth and global contraction. Romano Prodi, the President of the very European Commission which is supposed to police the euro pact, recently described the 'Maastricht criteria' as 'stupid'. Hence Mr Brown's knowing smirk: hence Mr Blair's rueful grimace. Everything said by his Chancellor could be used by a euro-sceptic to argue that Britain would be crazy to sign up to such a dodgy prospect this side of the next election.
More depressing still for euro-enthusiasts is the identity of the new governor of the Bank of England. There is nothing in the record or reputation of Mervyn King to indicate that he will help Mr Blair make him the last governor of the Bank of England. The Government's own test demands that there should be 'clear and unambiguous' evidence that the British economy is synchronised with the euro-zone. The next governor is on the record as asserting that such a test can never be meaningfully applied, let alone passed: 'You will never arrive at a point when you will be confident that the cycles have converged.'
Mr King has disparaged the idea that the Government can even make a sensible judgment about what would be the correct exchange rate for joining the euro, claiming that: 'It is impossible to know... no one can really know. That is clearly one of the difficulties in making a decision of that kind.' Mr King may not like to be labelled a sceptic, but he sure does talk their language.
The Prime Minister could have insisted on appointing one of the more euro-friendly candidates to the job of leading the Bank of England. Strictly speaking, the post is in his gift, not that of the Chancellor. Mr Brown appears to have overwhelmed Mr Blair with the argument that the City needed the reassurance of Mr King's record as an interest rate hawk when the Government was making such a big increase in borrowing. The Chancellor is nothing if not cunning: he has exploited the consequences of his own forecasting errors to advance into a key position a man who shares Mr Brown's doubts about the euro.
The two most powerful economic decision-making institutions in Britain are entrenched with sceptics. Around the Cabinet table, the most senior positions below the Prime Minister are also held by sceptics. Whatever their other differences withthe Chancellor, the Foreign Secretary and the Home Secretary share his lack of enthusiasm for joining the single currency in this parliament. The personal loyalties of David Blunkett and Jack Straw may flow to Mr Blair, but on the single currency they are much more aligned with the views of Mr Brown.
The trades unions are no longer so solidly pro-euro as they were and have too many other quarrels with the Government to be counted on as reliable allies. There are some business leaders still pressing the case. Sir Nick Scheele of Ford says that the 'incredible penalty' paid by companies will impel them to leave Britain. Carlos Ghosn of Nissan is another voice warning that Britain's share of foreign investment will continue to decline so long as the country is outside the euro-zone. The slightly hysterical edge creeping into these cries of alarm from euro-enthusiasts suggests they see that the chances of joining are shrivelling.
Even at Number 10, it is hard to find anyone who has any confidence that a referendum next year could be winnable. For some months now, Philip Gould has been using focus groups to war-game what would be likely to happen to public opinion during a referendum campaign. The results, I hear, have made gloomy reading for the Prime Minister. According to this war-gaming, a pronouncement that the famous five tests have been passed does build a majority in favour of the euro, but the majority is not solid enough to last into the ballot box. The antis win in the end.
No wonder euro-enthusiasts are increasingly fatalistic. Even officials at the Foreign Office, always the most euro-friendly of departments, are beginning to give up on it happening.
I believe that Tony Blair still thinks he can take Britain into the euro before the next election, but it is daily harder to find anyone else in his government who thinks so too.
Is it all over for the pro-euro cause? Email debate@observer.co.uk
