The British Chancellor of the Exchequer, Mr Gordon Brown, has broadly hinted that sterling will shadow the euro when the new currency is launched.
While refusing to be drawn into an explicit promise, Mr Brown's words are likely to provide some reassurance to Irish officials concerned at the vulnerability of exporters once the pound is locked into the euro.
Mr Brown said the British government would pursue "a policy of stable and competitive exchange rates consistent with an aim of low inflation". His promise of stability in exchange rates echoed a similar promise by the British Prime Minister, Mr Blair, who said he foresaw no problems in managing the relationship between sterling and the euro. Both men were extremely positive about the prospects of Britain joining the euro. Mr Brown refused to be drawn on the costs of Britain staying out, but argued strongly that the benefits of membership were considerable lower interest rates, lower transaction costs leading to improved competitiveness, and less currency speculation.
Although insisting that the decision by Britain would not be taken until after the next election, and then on the basis of economic evidence that participation in the euro would be good for Britain, Mr Brown said economic and monetary union was a process that was under way. "We consider ourselves to be part of that process," he said.
The Minister without Portfolio, Mr Peter Mandelson, contrasted the British attitude now to that of the Tories: "We are not in `wait and see' but `prepare and decide'."
The president of the Board of Trade, Ms Margaret Beckett, warned that British companies had done far too little to prepare for the single currency and said that the government would use its presidency of the EU to raise awareness.
Asked if the British government would be willing to allow companies to do their accounts and to pay taxes in euros, Ms Beckett's deputy, Lord Simon, said that, although there was as yet no demand for such facilities, he believed the government would be willing to consider the issue favourably.
Mr Brown said Britain had no plans to rejoin the Exchange Rate Mechanism (ERM)
formally a precondition for euro membership but argued that what was "most important is exchange rate stability".
In doing so, he echoes the position of the former minister for finance, Mr Ruairi Quinn, who repeatedly argued that member-states would not stand in the way of Britain signing up to the euro over non-ERM membership.
