Sharpe's Opinion
Tuesday, 27th Jan, 2009
John Redwood:
The single currency was always more of a political project than an economic one. The Germans saw it as their contribution to European union to offer a shared currency, drawing on the legendary anti inflation strengths of the DM. They do not expect other countries to cavil at the necessary anti inflation discipline which they built into the Euro, as they think it is good for all.
There is no easy way out of the currency. Whatever the people of the peripheral countries may think of their currency, their governments regard it as a matter of faith to stay in and manage the consequences. EU support for the concept has switched from arguing it is good economically, to arguing that the larger currency bloc gives members some protection from market hurricanes like those that engulfed Iceland recently.
That first sentence, about the single currency being a political project, cuts right to the heart of the EU. The EU exists, and continues to expand, because it feels like it should. It’s always been argued for on the basis of political expediency and idealism, not on the basis of whether it will help anyone accomplish anything, nor whether it is what the people of Europe are looking for, nor whether it fits with the social or historical makeup of Europe.
The goal hasn’t changed, the arguments vary by the decade. The fact that the French wanted to change the treaty so that the single market was no longer about efficient economics tells us everything we need to know.
I just don’t understand why British leaders are so keen on the project given that all it seems to do is cost us. Do our “partners” have some kind of hold over us?
The idea that big is best is shown to be a lie by countries like Singapore and Switzerland.
Blue Eyes
January 27, 2009 at 5:12 pm