Speech seen as welcome break with past

There was undoubtedly disappointment in Brussels last night that the British Chancellor, Mr Gordon Brown, had all but ruled out participation in the single currency in the current Parliament. But such feelings were swamped by the welcome recognition that the thrust of his speech represented a profound break with past British government policy.

That latter reality, the sub-text of his speech, is far more deeply felt and important both to Brussels and other EU capitals than the unconvincing attempt by the Tories to caricature Mr Brown's statement as a rehash of the old formula of "wait and see".

As one diplomat put it: "This injects an important new stability into the relationship between Britain and its fellow member-states." In three important respects Mr Brown has provided the reassurances they wanted - a declaration in principle of support for the idea of a single currency; the politically courageous recognition that if it works economically the sacrifice of some economic sovereignty is worthwhile; and a pledge that Britain will start immediate practical preparations for currency union so that the choice whether or not to join is a real one.

No one here has believed for a long time that Britain, for precisely the latter reason, really had left itself the option of signing up for the launch of the single currency in 1999. The hope had been that it would make the issuing of the banknotes in 2002 - it now looks certain we will have to wait longer. But there has also been a growing willingness here to recognise the case for British delay on the basis of the disjunction of its economic cycle from that of the rest of the EU now that that argument is no longer a disguised case for never participating.

The British Prime Minister, Mr Tony Blair, will undoubtedly pay a price for delaying entry in terms of political influence in the short term, particularly during the presidency starting in January.

Britain will not be part of the board of the new European Central Bank from the start. Nor will it be part of the informal group of euro states who will meet to co-ordinate economic policy in parallel to the Council of Finance Ministers.

This is a government, it has been said many times, that is already planning for its second term, and in 2003-2004 how many of Europe's current leaders will still be around? Kohl? Chirac? Prodi? Mr Blair will be, and if Britain is by then part of the single currency, he will certainly be centre stage.

There will also be strong support here for the British determination to make the completion of the single market the key challenge of its presidency starting in January.

"The Commission is of the opinion that the sooner the UK joins the better," said the President of the Commission, Mr Jacques Santer, and Mr Yves-Thibault de Silguy, the Commissioner in charge of Economic Affairs, in a joint statement last night.

But they welcomed "the overall positive UK attitude towards the euro, and its determination to prepare intensively for the introduction of the single currency". The Transport Commissioner, Mr Neil Kinnock, described the statement as a "careful and constructive" attempt to end "continual and disruptive guesses about a date for entry while making the government's support for the principle of Economic and Monetary Union clear".