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Analysis: Britain divided on euro

By CNN's European Political Editor, Robin Oakley

Blair
Blair insists it is Britain's destiny to adopt the euro.

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The UK government will soon have to decide whether to give up the pound.
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start quoteIf we are to be a member is it sensible to be a half-hearted member? We might as well be in there making British influence properly count.end quote
-- Blair
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LONDON, England (CNN) -- The British government has started debating whether the country should join Europe's single currency.

Britain, Denmark and Sweden are the three European Union members not to have adopted the euro.

UK Prime Minister Tony Blair is at odds with his Finance Minister Gordon Brown on the issue. Blair insists it is Britain's "destiny" to enter, but Brown is more cautious about the benefits.

On June 9, the prime minister will announce whether he will recommend a "yes" vote in a referendum on British entry into the European single currency, or hold off once again.

At a Downing Street news conference on Thursday he again underlined the importance of the decision.

"In the end is it sensible for Britain to be part of the European Union -- yes, for reasons to do with the economy, our influence in the world, the jobs and industry that depend on it," he said.

"If we are to be a member is it sensible to be a half-hearted member? We might as well be in there making British influence properly count."

And some observers say joining the euro could help bridge recent fissures.

Katynka Barysch, of the Center for European Reform, said: "If the government made a commitment to the euro now it would do a lot to heal the rifts that were opened up by the Iraq crisis."

The difficulty for Blair is that he has virtually handed over control of the euro decision to his finance minister -- and would-be successor -- Gordon Brown, who has the biggest say in five key economic tests supposed to determine the issue.

And with UK polls showing 2-1 against the euro, Brown is not keen on entry for a while.

Ministers in the UK Cabinet are debating the issue, but most of them are expecting the decision to be "not yet," which will not go down well in Europe.

"It would certainly be seen as a lack of commitment," Barysch said.

"What's important here is not necessarily the timing, as in saying they will have the referendum this year or next year.

"It is the commitment that the European countries would like to see because they are getting really tired of Britain blowing hot and cold on the euro and on the European Union in general."

So that is where the tussle is on between Blair and Brown. The prime minister wants the "not yet" to be accompanied by a pro-euro declaration and the suggestion there could yet be a referendum on entry before the next election.

"The more skeptical Brown, say colleagues, does not want to harm his own future job prospects by rushing things and is working to a longer time scale.


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