Cook fears creation of 'hard core' euro-zone

Robin Cook, the Shadow Foreign Secretary, said yesterday that a Labour government would not favour the emergence of a "hard core" of highly-integrated countries in the European Union that left other nations on the outside.

In a speech to the Centre for European Reform think-tank in London, he also said that Labour believed EU member- states should co-operate for their mutual benefit but not surrender national sovereignty. "The people of Britain want the exports, investment and jobs that come with our membership of the European single market. But the nations of Britain are also very proud of their identity. They want to preserve their culture and their sense of nationhood."

Mr Cook's speech, while clearly intended to mark out Labour as a more positive, pro-European party than the Conservatives, nevertheless indicated that his party could have difficulties with Britain's EU partners if returned to power in the upcoming election. France and Germany have already proposed that certain EU states should be free to deepen political and economic integration if they wish without other countries blocking them.

Moreover, the planned launch of monetary union in 1999 seems certain to generate momentum towards a "hard core" Europe, with countries using the euro co-ordinating policies more closely than countries outside. In particular, a so-called Stability Council whose membership will be confined to countries in the euro-zone is expected to develop transnational strategies for matters including exchange rates, employment and taxation.

All this implies that, if a Labour government wanted to be at the heart of Europe, it would have to accept a greater degree of integration and pooling of sovereignty than Mr Cook and many of his colleagues might feel comfortable with. However, Mr Cook emphasised that Labour understood the risks for Britain in being left out of an inner EU group.

"Labour firmly believes that it would be damaging for Europe if a hard core of highly integrated countries were to emerge at the heart of Europe, with the rest of Europe on the margins," he said. "And we know that it would be damaging for Britain for us to be relegated to the second rung of membership."

Mr Cook argued that Britain would find it difficult to stay out of monetary union if the project proved a success. But he said this did not mean that Labour was committed to joining the euro "in 2001, 2002, 2003 or any other specific year". The euro would have to prove it had "the stability to cope with the strain of differential rates of growth within the single currency area", he noted. Given that it might take many years to establish such proof, it appears Mr Cook was leaving open the option of not entering monetary union for a considerable period after its launch.