Voice of reason
For better or worse, the level of debate on Europe seems to be at an all-time high. Much of this can be attributed to the clowns in the Referendum Party, but making this a major campaign issue is highly beneficial at such a important time in the development of the EU. And from where I am standing, if things aren’t sorted out tout de suite, we are in dire trouble, dear reader.
Some say that Britain seeks only narrow self-interest in Europe, compared to France and Germany that are in it for the common good. Where Britain differs from our continental partners is in the fact that our people and our politicians are far more closely aligned in their views on the future of Europe. You may imagine that the people of Germany are fanatically Euro-enthusiastic. A recent survey found that a majority of Germans want a referendum on the single currency. The Maastricht Treaty only scraped through in France and Denmark. Our portrayal as being Eurosceptic is one that everyone in the country should be proud of, whether they agree with the stance or not. For a country’s leaders to be so out of touch with public opinion on constitutional matters is a perilous situation.
Monetary union is, of course, the hot potato at the moment. Money and power have always been synonymous. Therefore, any move to centralise monetary policy is a shift in power and thus sovereignty. Or so you would think. This view is unique to Britain. The French feel that monetary, and ultimately political, union will increase their sovereignty by giving them influence over other countries, totally ignoring the consequent loss of control over their own affairs. The Germans, however, are desperate to cede sovereignty in order that, once and for all, they cease to be seen as a threat to Europe. Less high-mindedly, Germany, given her economic might (albeit declining) in Europe, realises that exercising control over her partners economies allows her to protect the competitiveness of German industry by preventing all the old dodgy ruses such as devaluation or inflation brought about by slack monetary policy. The early attempt to do this, the apocalyptically awful ERM, put such emphasis on killing inflation in the 80s without reforming economies, as we did, that it was a major factor in the high unemployment on the continent.
Now the ERM is to grow into EMU (an odd bird, invariably seen with Rod Hull’s arm up its nether regions, that stands a cat in hells chance of ever getting off the ground). Had Lady Thatcher not ousted Ted Heath, this may have already happened; the original plan was for monetary union by 1980, a point he omitted to mention when we signed up in 1973. Convergence is the name of the game for EMU, namely if you wish to have a single currency, it would be prudent to ensure that all the participating economies were in economic sync on growth, inflation and debt, for example. Oh dear. The tricks, fiddles and fudges done to achieve this have been incredible. The French have nobbled pension funds, the Dutch have sold gold like nobody’s business and the Italians have sold everything that wasn’t nailed down. On the face of it not even Germany should be allowed into EMU, on account of national debt. If these rules, less than perfect in any case, are bent to the point of cracking, the resulting currency will be fatally flawed. We are best to steer well clear of such a farrago.
Even if the rules were rigidly obeyed and genuine efforts were made to meet them, rather than the shameless attempts to shoehorn economies into EMU in 1999, the benefits seem illusory. People talk of not having to change money in Europe and the huge assistance to business. What they forget are interest rates. We shall end up with rates too high in one place and too low elsewhere, leading to problems in both cases. It’s difficult to get the whole of Britain at the same point in the economic cycle, let alone Germany and Portugal. The EU should stay as a single market. Move towards a federal Europe, of which this is the key step, and there will be blood on the walls. Again.
