The Daily Mail
Wednesday, January 16th, 2002

Brussels 'must have control of the euroland economies'

The euro can only survive if countries using the new currency hand over control of their economies to Brussels, it was claimed yesterday.

Taxes and welfare systems must also come under central control, or the euro will collapse.

The warning, by French finance minister Laurent Fabius, could not have come at a worse time for Tony Blair as he steps up his drive to persuade a sceptical British public to embrace the euro.

Mr. Fabius said on French TV that the creation of the new currency will increasingly lead to 'budgetary federalism', although he insisted this would not mean the creation of a European superstate.

His remarks will be seized upon by anti-euro campaigners as evidence of a major drive towards federalism.

Mr. Fabius will also enrage Chancellor Gordon Brown, who last year slapped down proposals for tax harmonisation.

The finance minister is one of a growing number of eurocrats who believe that eurozone countries have not converged their economic policies enough. They fear the widely varying inflation, taxes and spending policies could tear the single currency apart in the event of an economic crisis.


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