UK Politics

Tony Blair: UK could still join euro in future

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Media captionTony Blair: "Unless you can make a compelling case for the euro, you would never win a referendum on it"

Former prime minister Tony Blair has said there might still be a case for the UK joining the euro in the future.

He told the BBC he did not agree with people who argued joining would be a disaster, but there had to be a compelling economic case for doing so.

He said he believed the euro would eventually resolve its problems and the case for Britain joining may become "compelling ... at a certain point".

David Cameron said it would be a "dreadful idea" for Britain to join.

The prime minister, in Brussels for an EU summit where Greece's debt crisis is among items on the agenda, said: "Britain is out of the euro - I think we will stay out of the euro and certainly as long as I am doing this job there is no prospect of Britain even contemplating joining the euro."

The Greek parliament has to pass fresh austerity measures next week before the country can gain vital bail-out funds to prevent it defaulting on its loan payments, due in mid-July.

Mr Blair told BBC One's Politics Show, in an interview to be broadcast on Sunday, he had backed the idea of Britain joining the euro when he came to power - but had accepted that the conditions had to be right.

Five tests

His then chancellor Gordon Brown famously came up with five economic tests that would have to be met before Britain could join the single currency.

Mr Blair told the programme: "I agreed with the five tests and I agreed with his decision. I was always absolutely in favour of doing it politically and still am. I've always said though, since it's an economic union, the economics have got to be right.

"Now I don't actually take the view that some people take, that Britain joining the euro, in the past or now, will be a disaster. However I always said, unless you can make a compelling case for it economically you were never going to win a referendum on it.

Athens and EU flag What went wrong in Greece?

What went wrong in Greece?

An old drachma note and a euro note
Greece's economic reforms, which led to it abandoning the drachma as its currency in favour of the euro in 2002, made it easier for the country to borrow money.

What went wrong in Greece?

The opening ceremony at the Athens Olympics
Greece went on a big, debt-funded spending spree, including paying for high-profile projects such as the 2004 Athens Olympics, which went well over its budget.

What went wrong in Greece?

A defunct restaurant for sale in central Athens
The country was hit by the downturn, which meant it had to spend more on benefits and received less in taxes. There were also doubts about the accuracy of its economic statistics.

What went wrong in Greece?

A man with a bag of coins walks past the headquarters of the Bank of Greece
Greece's economic problems meant lenders started charging higher interest rates to lend it money. Widespread tax evasion also hit the government's coffers.

What went wrong in Greece?

Workers in a rally led by the PAME union in Athens on 22 April 2010
There have been demonstrations against the government's austerity measures to deal with its debt, such as cuts to public sector pay and pensions, reduced benefits and increased taxes.

What went wrong in Greece?

Greece's problems have made investors nervous, which has made it more expensive for other European countries such as Portugal to borrow money.
Eurozone leaders are worried that if Greece were to default, and even leave the euro, it would cause a major financial crisis that could spread to much bigger economies such as Italy and Spain.

What went wrong in Greece?

Greek Prime Minister George Papandreou at an EU summit in Brussels on 26 March 2010
In 2010, the EU, IMF and ECB agreed a bailout worth 110bn euros (£92bn; $145bn) for Greece. Prime Minister George Papandreou quit the following year while negotiating its follow-up.

What went wrong in Greece?

Lucas Papademos
Lucas Papademos, who succeeded Mr Papandreou, has negotiated a second bailout of 130bn euros, plus a debt writedown of 107bn euros. The price: increased austerity and eurozone monitoring.

What went wrong in Greece?

Crowds
In May 2012 elections a majority of voters backed parties opposed to austerity, but no group won an overall majority resulting in political deadlock. Fresh elections have been called in June.
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"And the case for Britain joining isn't compelling. Now it may become that at a certain point."

Last week Mr Straw - who served in various cabinet posts including foreign secretary under Tony Blair - predicted the collapse of the eurozone, as MPs debated the prospect of a fresh bail-out for Greece.

He said: "Since the euro, in its current form, is going to collapse, is it not better that this happens quickly rather than a slow death?"

Mr Blair said the problems with the eurozone were "fundamental" and there had to be changes - to align fiscal and monetary policy across the single currency area, and to make changes in those countries with problems.

"If people are retiring in their 50s on large salaries in the public sector, in circumstances where, in the end, you know, life has changed, demography has changed, people are living longer and so on - at some point you've got to reform."

But he said he did not think the euro would collapse, adding that the logistics of recreating individual currencies were "immense".

"For Europe, no I don't think they're going to give up the single currency. Now that's not to say there aren't huge issues to do with how you get through the next months."

Mr Brown said in his book, published last year, that when he expressed doubts about Britain's entry into the euro soon after Labour's 1997 election win, "I stood virtually alone in the Cabinet".

He said he had been ready to quit, if the government had decided to join.

The Politics Show is on BBC One on Sunday, from 1100 BST.

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