France snubs Blair over new Euro club

FRANCE delivered a slap in the face to Tony Blair's EU leadership ambitions yesterday by proposing that Euro-X, a new economic policy club, reserved for countries joining the single currency, should be launched on 19 May.

The French want the co-ordination of economic policy within the Euro- zone to begin shortly after the 3 May selection of the first wave of single currency members. But such insensitive timing would highlight Britain's political marginalisation following the Government's decision to rule out joining the single currency for now.

For Gordon Brown, the Chancellor, the move would represent a very public snub. He is chairman of EU finance ministers' meetings until July, but now faces being relegated to another room with his Danish Greek and Swedish colleagues.

The French finance minister, Dominique Strauss-Kahn, is expected to seek German backing for the early launch of Euro-X when he meets his German counterpart, Theo Waigel, bilaterally in France today. "As soon as we know for definite who is in EMU we will have a lot of things to co-ordinate, but we also have to decide on the structure and organisation of the committee even if it will be informal," said a senior French official.

Euro-X gave Tony Blair, his first big row with EU partners in December when heads of government formally agreed to its establishment. In Brussels yesterday, Mr Brown clung to the Government's claim that Britain would not be excluded when "matters of common interest" are being discussed.

But the French said yesterday that they will retain a veto over the UK's admission to the club. "The UK will no doubt say they should be in every time we meet but it is absolutely a question for the `ins' whether something is of common interest. And it is the ins who decide what the outs should be told afterwards", a senior adviser to Mr Strauss-Kahn said.