Euro launch leaves Blair to deal with sceptical mindset

In pantomime the golden rule on stage is never to look out for the joker with the custard pie.

In pantomime the golden rule on stage is never to look out for the joker with the custard pie.

The Dutch Finance Minister, Mr Gerrit Zalm, could have been forgiven for not seeing the joke on Monday when he turned up for the grand launch of the euro at the Amsterdam Stock Exchange.

He had not had a great start to the day - his car became stuck in traffic and he missed the chance to launch trading officially - and when he finally arrived he ended up with a face full of custard pie, thrown by a member of an anti-euro protest group.

Apart from the joke factor of printing Mr Zalm's photograph, the birth of the single currency in the 11 member-states of the euro zone was marked by the majority of the British press with a creeping acceptance that it was a historic chapter in European history.

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Like it or not, the euro had arrived. While it was not a member of euro-land, the signs were clear that the debate over whether Britain should join or not would dominate the political landscape for years to come.

Returning from the Christmas and New Year break this week, most office workers in London were caught by surprise by the launch of the euro. Stores such as Marks and Spencer and Boots were among only a handful of retailers which had made basic preparations to accept euros in their cash tills. Most retailers believe there isn't much point in euro conversion until the government gives a clear indication of intent concerning the single currency.

The absence of the Prime Minister, Mr Blair, and the Chancellor of the Exchequer, Mr Gordon Brown, from London on euro launch day - Mr Blair was on holiday in the Seychelles and Mr Brown was in his constituency in Dunfermline - did not go unnoticed by the media.

Both men were escaping from what we might call a little local difficulty following the resignations of the former trade and industry secretary, Mr Peter Mandelson, and the former paymaster general, Mr Geoffrey Robinson, and the imminent departure of Mr Brown's press secretary, Mr Charlie Whelan.

Not good enough, cried the Daily Telegraph, the nation was looking to Mr Brown for guidance while the "Continentals" talked of the long-term implications of the euro. Yet all the public were given was an article by Mr Blair in the Wall Street Journal telling them that Britain was strong in or out of the euro zone.

For while 30,000 financial staff toiled over the New Year holiday to prepare the London Stock Exchange and banks for the euro's launch, Mr Blair's policy of "wait and see" means the government is unlikely to call a referendum on membership until after the next general election.

If the Tories succeed in turning the debate into a battle over the political and social identity of Britain in the light of elections to the Scottish parliament and the Welsh assembly in May, and the transfer of powers to the Northern Ireland Assembly - rather than a purely economic debate as the government would prefer - Mr Blair is facing a tough few years.

Devolving power to Scotland could open the floodgates of independence if the Scottish National Party defeats Labour in Edinburgh. Downing Street is by no means assured that its candidate in Wales will assume power in Cardiff following the resignation of the former Welsh secretary, Mr Ron Davies.

The break-up of the UK could come at about the same time as Britain elects to strengthen its ties with Europe, posing complex economic and political questions at Westminster.

A Guardian/ICM poll published this week, however, revealed growing opposition to the euro among British voters, with euro-scepticism strongest among working-class voters compared with middle-class voters: 57 per cent of manual and semi-skilled workers rejected the euro and only 21 per cent were in favour; 43 per cent of managerial and professional workers were against the euro compared with 40 per cent in favour.

There was some good news for Mr Blair, who gave the strongest hint so far that the government was enthusiastic about the euro when he said in the Wall Street Journal there was no constitutional barrier to Britain signing up to the euro, with 46 per cent saying they would vote to join the euro if the economic conditions were right.

Sun readers have yet to be convinced and, ever mindful of the powerful influence of the anti-euro Sun on British voters, Mr Blair and Mr Brown will have a difficult job turning them around when the membership issue goes to a referendum. The results of the Sun's latest poll found 77 per cent of 12,000 respondents rejected the euro compared with 16 per cent in favour.

It is the mindset of British voters who are sceptical about losing sterling, which is intimately bound up with the national identity, and fears over tax harmonisation, rises in unemployment and interest rates, which must be met head-on by Mr Blair.