Jean Monnet said that in negotiating with the British you first establish the facts and then rely on their famed ability to recognise them. So it is with the euro. Mr Gordon Brown's statement to the House of Commons yesterday contains much that is positive about the United Kingdom's relationship with it.
He repeated the Labour government's firm commitment to join when the conditions are right and registered clear progress on the conditions he set out in 1997 to test that resolve.
But his conclusion that there is as yet no clear and unambiguous economic case for Britain to join conceals a political disquiet at the heart of his government about doing so, despite his announcement of structural economic reforms and political preparations for British entry. Its timing is equally ambiguous, since these reforms will take longer to implement than the review in the next British budget, when he is to evaluate the five tests again.
A referendum is therefore unlikely in this parliamentary term, putting British entry back at least four years.Such a delay will strain Britain's credibility as a state intending to join the euro, and hence Mr Tony Blair's long-standing ambition as prime minister to bring his country to the heart of Europe. Presenting the case so much in terms of when the conditions are right for Britain to join will create a resentment among existing euro members that they are having to bear the risks and hence should be increasingly responsible for governing the currency and the macro-economic policy-making that must accompany it in an uncertain European and world economy.
As a result Britain's influence on that economic policy and on wider issues such as the constitutional treaty and developing foreign and security policies within the European Union will be jeopardised. Things will not stand still over the four or five years it will take Britain to join the euro, according to the most optimistic and realistic scenario engendered by yesterday's announcement.
There is much politics in the decision, including tension and long negotiations between Mr Blair and Mr Brown about the domestic and international strategy and tactics involved. There is also a clear, if unstated, recognition that British public opinion is not yet ready to make the shift towards the euro. In good part this is because Mr Blair and his government have not been willing to argue the case vigorously and vocally with the electorate. The British debate has been bedevilled by a false distinction between the economic and political cases for joining. It is high time the political case was made.
This decision is regrettable and potentially damaging from the Irish point of view, because of this State's exposure to exchange rate volatility between the euro and sterling. It was right to join the euro without the UK, to broaden Ireland's economic and political engagement; but the consequent need to diversify Irish exports and ensure competitiveness must now be squarely faced.