Britain snubbed on single currency

Britain's attempt to avoid becoming politically sidelined in Europe was in difficulty last night, after France and Germany ruled out granting Britain a seat on a proposed economic council to be reserved for governments joining the single currency.

Bonn and Paris raised a new difficulty for the Chancellor, Gordon Brown, by suggesting that even listening to Britain's views on the new committee would be conditional on the country rejoining the European exchange rate mechanism (ERM).

Mr Brown, allied with finance ministers from Sweden, Denmark and Greece, all of whom are likely to remain outside EMU at the start in 1999, protested about plans to set up the body, to be known as "Euro-X". If the committee is to be launched, the British, Greeks, Swedes and Danes want observer places, arguing that its deliberations could have a direct impact on their economies.

But French and German ministers said the difficulties they faced were of their own making. Theo Waigel, the German finance minister, said "nobody could prevent" the euro-zone countries from launching their own informal consultations outside the framework of the EU treaty.