Blair gives boost to feeling that Britain may join euro

The prime ministers of Britain and Spain have urged the European Union to keep alive its commitment to economic reform, and eschew "heavy-handed regulation" and divisive constitutional debate.

In a joint article in the Financial Times and El Mundo, Britain's prime minister Mr Tony Blair, Mr Jose Maria Aznar, Spain's conservative prime minister, write that though "we may come from different political traditions, we are united in our determination to pursue this economic reform agenda". Mr Blair also spoke warmly of the euro as the leaders praised the European Central Bank for "delivering low inflation and higher growth across Europe". The comments will strengthen the feeling that the British government is hardening its commitment to join the euro when the economic conditions are right.

The leaders have taken several joint stands on economic reform before. But the latest move seems designed at least as a counterpoint to the Franco-German axis. It is also a reminder that other big member states will not let themselves be sidelined by Berlin and Paris in the debate over political integration.

Both leaders played a big part in orchestrating the EU's pledge made at the Lisbon summit in March to catch up with the US in terms of e-commerce, skills development and labour market flexibility.

They described Lisbon as "a turning point for Europe" and their article appears aimed at trying to prevent the Lisbon agenda being submerged by political and constitutional wrangles. "As prime ministers, we may come from different political traditions, but we are united in our determination to pursue this agenda. In the past, we made the mistake too often of trying to apply social policies that generated obstacles for business growth and job creation," they wrote.

Next week's EU summit at Feira will focus on defence, incorporation of a flexibility clause into the EU treaty and a human rights charter - issues that will also dominate France's presidency of the EU in the second half of this year.

On flexible integration, Mr Blair and Mr Aznar wrote "some of us may wish to go a bit further a bit faster but all must respect rules and procedures of the union. There can be no second class citizens in Europe".

France has avoided endorsing the recent call by Mr Joschka Fischer, the German foreign minister, for moves to a federal Europe. But writing in yesterday's Le Monde newspaper, his French counterpart, Mr Hubert Vdrine, supported plans for "reinforced co-operation" to allow some states to bind themselves closer than others.

To guard Mr Blair's flank against Britain's eurosceptic majority, the article states "our two countries have distinctive positions on the euro". But it goes on to affirm that the euro "is changing the face of Europe".

The article comes after the governments' partial settlement of their differences over Gibraltar.