nEUROsis

pete quentin, 1 December 2008

Last week, Shadow Health minister, Andrew Lansley said that the recession could be “good for us”. Amidst public outcry he quickly apologised for his sarcastic and insensitive comment, but it seems that euro-enthusiasts might begin to see a silver-lining as the economic black clouds descend, because the economic turmoil has driven the debate about the UK joining the euro back into the headlines.

This morning, the heated issue was once again stoked by Brussels, when José Manuel Barroso (President of the European Commission) announced on French radio that the UK is “closer to joining the euro” because of the current economic turmoil.
In the interview, Barroso said “I’m not going to break the confidentiality of certain conversations, but (ah…the notorious “but” of politico tittle-tattle) some British politicians have already told me, ‘If we had the euro, we would have been better off’.”
These “some politicians” apparently include Lord Peter Mandelson (recent UK EU Commissioner and stoker of the “Russian Oligarchs and Osbourne donations” scandal) who said that “our aim” should be to join the euro. However in a classic case of ‘the left arm not talking to the right arm’, Downing Street contradicted Mandelson by stating “Our position hasn’t changed… we have no plans to join the euro.”
Labour’s contradictory stance on joining the euro famously divided the Blair/Brown partnership from as early as 1997 when Blair voiced support for joining the single currency, whilst Brown expressed reservations. For example Brown constructed “five economic tests” to examine the effect that the UK’s joining the eurozone would have. The first two tests related to whether the union could actually work and whether the UK economy could cope with the huge economic changes. The last three tests related to whether joining the single currency would have a positive impact on UK jobs, foreign investment, and the UK financial services industry.
In contrast to other currencies, the recent devaluation of sterling during the “credit crunch” has forced the UK Government to try to prop up the economy with a huge spending spree, as announced in last week’s Pre-Budget Report. This lends some evidence to Barroso’s insistence that the euro could be “an anchor of stability in troubled times…” But I would dispute his insistence that “the advantages are very clear” because the euro hardly provided a solid “anchor”. In fact, despite European politicians calls for unity and a “common European solution”, at the height of the financial crisis EU unity was markedly lacking and no EU-wide solution was produced. On the contrary, euro members put their national interests first and were busy anchoring their own economies (note Ireland’s assurance to guarantee 100% of private deposits despite fears that such a move would suck funds from other eurozone banking sectors). Gordon Brown would be quick to argue that the solution ultimately stemmed from outside the eurozone – the UK.
In today’s daily briefing in Brussels an European Commission spokesman announced that “member states would benefit from a country like Britain being in the euro”. Perhaps that is true, but UK politicians must concentrate on the best decision for Britain. Entry into the eurozone is hugely complicated. There can be no simple “one-size-fits-all” analysis because it is different for each state. Britain must evaluate how losing the ability to set interest rates would effect UK jobs and trade.
In his French radio interview, Barroso states that “the majority in Britain are still opposed, but … the people who matter in Britain are currently thinking about it” . That says it all really doesn’t it? So if “the people that don’t matter” are those who are not currently thinking about joining the euro that would include Downing Street, the majority of the UK public and the UK Opposition Party; (William Hague decisively stated that “There are no circumstances in which the next Conservative government will propose joining the euro.”) Barroso’s comments contradict the EU’s principle of subsidiarity. Furthermore, a top EU politician’s determination to ignore the Great British public on account that they simply “don’t matter” starkly demonstrates the EU’s aversion to democracy. As UKIP leader, Nigel Farage, puts it “the people who matter in Britain are the people, not the professional political class that Barroso is himself a member of”.
The joining the euro symbolises a hugely politicised union because it has huge repercussions for national sovereignty. Therefore there is a need for open and honest debate. There have been suggestions today that Barroso’s remarks were intended to “test the mood” in UK. Well the results are in: Britain’s nEUROsis persists.