THE credibility of the euro suffered a serious setback after a former European commissioner publicly called into question its long-term survival.

The attack by Frits Bolkestein, the former EU Internal Market Commissioner, is a serious embarrassment to the Commission, which has fought hard to kill off speculation about the single currency’s future.

Last year several City economists cast doubt on the future of the euro, and some Italian politicians have started a campaign to ditch it. The Commission has always dismissed critics as cranks or ill-informed.

Mr Bolkestein, a Dutchman who served in the Prodi Commission from 1999 to 2004, predicted in a speech to Dutch business leaders in London that the euro would face a huge test in about ten years, with a massive growth in people reaching pensions age in Europe. He said that the ageing of Europe’s population would hit the Continent “ruthlessly”, with eurozone states such as Italy being unprepared for the expected jump in pension claims.

These states “will be forced by political pressure to borrow more and increase their budget deficit, with consequences for interest rates and inflation”, Mr Bolkestein said, adding that “the real test for the euro is not now but in ten years’ time.” He concluded: “In my view the long-term chances of survival of the euro should be questioned.”

Joaquin Almunia, the Monetary Affairs Commissioner, and Jean-Claude Trichet, President of the European Central Bank, will be forced on the defensive over the currency tomorrow in a World Economic Forum debate in Davos on its long-term stability. Some economists predict that the euro could be pulled apart by countries’ differing economic performances. Opinion polls show that many Europeans blame the euro for the Continent’s struggling economy.

• The European Commission is to open an inquiry into a French decree that shields certain industrial sectors from foreign takeovers.

  A spokesman for Charlie McCreevy, the Internal Market Commissioner, said that a letter had been sent to Paris detailing the Commission’s concerns.

  France has one month to respond. If the reply does not satisfy the Commission’s concerns, it will consider opening infringement proceedings.

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