The use of the Euro as a major currency could be the first step towards political unification of the EU -- and across-the-board taxation for member states and Overseas Territories like Bermuda, a businessman warned.

Ex-Shell Bermuda chief and Chamber of Commerce committee member Bob Stewart said: "When we have political unification, then there is greater pressure for tax harmonisation in all of the countries.

"If there is political unification, if there is tax harmonisation, what it means is that each country will say to the others `you cannot have policies in place in your country which benefit you and harms us'.'' And he added France and Germany were "traditionally keen'' on intervention in the economy, unlike the hands-off approach adopted by the UK in recent times and practised by the US.

Mr. Stewart predicted: "If there is a tax code which applies within Germany and France or some other place, it will be the obligation of the British Government to apply that to Bermuda.'' He was speaking at a breakfast seminar organised by the Chamber of Commerce to canvass views on the UK Government's rewrite of relations with its colonies, published last month.

The White Paper offered full citizenship to the less-than-200,000 citizens of the Overseas Territories with no strings attached.

But it also warned the Territories would have to adopt Euro-style standards on human rights and financial regulation.

That could mean tougher rules governing business in Bermuda -- including `fishing expeditions' by outside authorities as well as the abolition of hanging and flogging.

And the UK warned if Territories do not toe the line in protecting human rights and taking measures to cut down on white-collar crime and money laundering, then Britain could legislate for them.

Mr. Stewart added: "Britain has kept its hands off..that may very well not be the case in the future and that requires further study.'' And he said that more countries -- like Hungary and the Ukraine, both former Soviet satellites -- had advertised for candidates to set up companies and banks in a offshore-style deal.

Mr. Stewart added that "ethical foreign policies'' like the line taken by the British Labour Government "includes attacks on offshore jurisdictions'', especially with the growth of the drugs trade.

And he said: "A more coordinated approach by the UK and organisations like the Organisation for Economic Cooperation and Development, the European Union and G7 could create a great threat to our economic activity.'' Another guest speaker, PLP Senator and BIU Credit Union chief Calvin Smith said that Britain had made it plain it wanted action on human rights and financial regulation.

Sen. Smith added: "Britain makes it very clear that there are certain things, if we don't do ourselves, they will do for us.'' And Mr. Stewart said: "The EU, the OECD and G7 are in effect all the same group and they were saying `do as we say or we will do it for you'.

"America has been doing this for years to Cuba, which is a much bigger country than Bermuda is.'' During question time for members, one guest raised the possibility of Bermuda being able to fight its corner better as an independent country.

But another insisted: "I don't believe that we, as an independent country, will be as well-served as we are under the current situation.'' And he pointed out: "The US and other Governments could very quickly impose restrictions whether we were independent or not.'' Lawyer and pro-Independence candidate Phil Perinchief told the breakfast meeting that Bermuda was already branded a tax haven and a "tax harmful jurisdiction.'' He said: "Many people are attracted to Bermuda because they avoid tax -- indeed, they may evade tax.'' But Bank of Bermuda chief Barry Shailer said accepting Bermuda was a tax haven did not help the Island's bid to stay off a variety of hitlists of dodgy jurisdictions.

He said: "One of the things we have had to constantly overcome is that Bermuda is just another tax haven.'' BUSINESS BUC