British Chancellor of the Exchequer Mr Gordon Brown's Mansion House speech last night mixed a strong call for Britain to be at the heart of the European Union (EU) with a renewed warning that the UK must be wary of further moves towards tax harmonisation and a federal fiscal policy.
As Britain and its 24 EU partners prepare to agree a new constitution for the union at a summit in Brussels in the next two days, the chancellor delivered his customary call for the EU to respond to globalisation by embracing flexibility and liberalisation.
But as ministers face the possibility that they could be fighting a referendum on the new EU constitution within two years, the most striking feature of the speech was a firm signal that he wants to see a "strong Britain in a strong Europe".
In an apparent reference to the strong performance of the UK Independence Party (UKIP) in last week's elections to the European Parliament, he added: "At a time when a significant section of political opinion appears to be making the case against Britain's very membership of the EU, I say that we must, and will, make the positive case for Britain in Europe."
Prime Minister Mr Tony Blair made clear at his monthly Downing Street press conference this week that he intends to make the case for Britain playing a pivotal role in Europe and "it is an argument I intend to win".
But on this issue the chancellor is widely deemed to enjoy greater credibility with the public than Mr Blair - and this means the chancellor's willingness to engage in the debate may be more telling.
Mr Brown made clear that the avoidance of EU-wide tax harmonisation was essential.
"When member-states are answerable to their citizens for tax and spending decisions, it is right that the conduct of fiscal policy remains the responsibility of member-states," he said.
On the broader economic front, the chancellor identified three risks to the economy: a spike in oil prices, the housing market and the need for fiscal discipline.
Mr Brown said Britain's economy was becoming more balanced with an upturn in business investment, manufacturing and exports.
At times like this, "government have relaxed their fiscal disciplines and resorted to quick fixes and short cuts in fiscal policy and gone on to raise the rate of spending in a pre-election spree".
The government would resist this temptation and would meet its self-imposed fiscal rules, Mr Brown said.
