If Mr Tony Blair genuinely believes the decision on whether and when Britain should join a European single currency is the most important of his political career, he should have ensured that it was announced in a commensurate manner. To have allowed the issue to be dealt with by the selective hints, leaks and spins of the last weekend, in which it was implied that his government will not join EMU during the lifetime of the present parliament, shows an extraordinary insensitivity to the various interests at stake in Britain and among its European partners. They need to know clearly whether Britain intends to join the single currency and what timescale the government considers appropriate if it has decided to do so. They deserve to be told this as authoritatively as possible, not by playing games with selected journalists and newspapers in the parliamentary lobby. The manner in which the news was released that governmental opinion has swung against early EMU entry leaves a substantial and regrettable gap between now and a formal parliamentary statement, which will bring further uncertainty to the markets and more volatility of sterling. This was always going to be an extremely difficult decision for Mr Blair. Despite the prolonged honeymoon period he and his government have enjoyed, analyses have shown that the British economic cycle is out of kilter with its European partners. It would create problems of convergence and timing were the decision taken to join EMU in the first wave next year or shortly thereafter, not least because the Treasury is reported to have advised that swingeing tax increases would have been necessary to mitigate the effect of lower interest rates and to avoid economic over-heating. Mr Blair reportedly saw there a breach of faith with middle England and his election promises to stick with existing tax levels.
Now that the decision has apparently been made not to join EMU until after the next election, and then only if its performance measures up to a series of suggested tests, Mr Blair and his government have the difficult task of convincing their European partners of Britain's good faith towards the single currency project and of their continued ambition to adopt a leadership role in the EU's affairs. The bland press briefings after Mr Blair's five-hour meeting with the German Chancellor, Dr Helmut Kohl, yesterday contain little of value in these respects, except for the following important undertaking by the Prime Minister's spokesman. He repeated the position that "while we are unlikely to be in the first wave, we would not seek to undermine or sabotage others who were pressing ahead with EMU and that we would use our position constructively". This is presumably welcome code for no competitive devaluations and a deliberate pursuit of fiscal and interest rate convergence with the other EU economies. If Britain is genuinely to maintain its influence and not risk marginalisation such policies need to be accompanied by a clear commitment that in principle it intends to join EMU as soon as it can. From the Irish perspective the British decision, if formally confirmed, is regrettable but not surprising. Such a large step beyond national sovereignty is difficult for any British government, of whatever political hue. A four or five-year delay, with Britain joining belatedly, will pose serious questions about adaptation and flexibility in the Irish economy. But it remains clearly in Ireland's interests to be among the first-wave economies, in order to maximise benefits and influence at the core of European decision-making.