Cook: "no soft Euro"

"The Euro debate is in danger of polarising between hard and soft"

Cook Warns of Soft Euro

His comments came after a week in which German attempts to meet the Maastricht Treaty criteria by revaluing its gold reserves were blocked by the Bundesbank. It also saw the election of a socialist government in France which is committed to abandoning the previous administration's tough economic policies which had been aimed at meeting the treaty criteria.

"The last week has raised some very significant questions in the minds of politicians on the Continent," Mr Cook told the BBC's Breakfast With Frost   programme. Asked if he welcomed the French idea of a "softer euro", Mr Cook said: "No, not if that meant you were making it easier for people who had fudged the criteria to get in under the line."

He added: "The debate at the moment seems to be in danger of polarising between a softer Euro, which would not be workable, and a harder Euro which would not be popular. If the European single currency is to proceed on time it is very important that it proceeds on time both with credible criteria which will make sure it is a credible strong currency and secondly with popular backing."

As to the prospects of Britain joining, he said: "We will carry out a hard-headed assessment towards the end of this year as to whether joining would be in the economic interests of Britain. At the moment we think it unlikely that that assessment would point to us joining."