It’s an overdue jolt for Europe’s tram on the line to ever-closer union
There has to be a first time for everything, and now the French have taken my advice. ‘Allez France’, so I urged them last week, ‘votez Non, votez souvent’ — and they did. Offered Europe’s new constitution on a plate with lettuce round it, they sent it straight back like a grounded soufflé. Now I expect to be told that the soufflé’s collapse was all my fault. It has to be somebody’s. Blame is drifting round the Eurosphere like a dark cloud, looking for someone to rain on. Jacques Chirac and Tony Blair now look all set to blame each other. Eurocrats blame the folly of asking impossible questions like this, and try to pretend that the whole aberration never happened. This gambit has worked in the past, after all. Too many careers have been invested in the notion that Europe is on a tramline towards ever-closer union for mere voters to be allowed to push the tram into a siding. Career investments on these lines, or tramlines, are a French speciality. Before signing up for the euro, France insisted that the job of its bank manager should revert to Jean-Claude Trichet, of the Banque de France. In the grand tradition of jobs for les garVons, he has taken his place alongside Jean Lemierre at the European Boondoggle for Remuneration and Disbursement, and Pascal Lamy, now heading for the World Trade Organisation, who drove the grand Europrojet forward in Brussels as Jacques Delors’ devoted chief of staff at the European Commission.
Benefit performance
Such placemen have helped to make the projet grow in France’s image, or at least for France’s benefit. The constitution itself was the work of the grandest of all placemen, Valéry Giscard d’Estaing, sometime president of France. While he was still an ambitious finance minister, he spoke at the International Monetary Fund’s meetings and I would make a point of listening. It was like an evening at the opera: I could not pick up the words, but the performance was impressive. Jacques Chirac may have been relying on this effect, but it seems to have worn off — either that, or the rules have changed. Europe is no longer the small, cosy club that the French founded and could expect to manipulate. New members have found their way in, and even the Turks are readying themselves to face the candidates’ committee. The voters would like to know what is in it for them. In Calais, they voted Non by 70–30. Perhaps they want to rejoin England.
A predictable kicking
At the European Central Bank, JeanClaude Trichet has been creating a diversion, by finding fault with the Bank of England. Its decisions, so an ECB study says, are insufficiently predictable. The Governor, Mervyn King, must find this hurtful — he aspires to make central banking more boring — but surprises help to keep the markets on their toes. They had time to adjust to the idea of a Non vote, but this week they were still taking it out on the euro, as well they might. Without the sure or early prospect of a constitution, and without a pact to keep profligate countries in order, Europe’s single currency finds itself short of a backstop. It will need one if a profligate country comes under pressure, and needs to be bailed out by its partners in the euro or by the Central Bank itself. Which country that might be I forbear to say, but I would hope to pick up warning signals on my negroni index.
It’s a totem
Others might then wonder, as I do, why Europe should need a single currency at all. We seem to be able to manage without it. The idea made sense, in its way, when it was first proposed, half a lifetime ago. In those days, countries had built fences round their currencies to stop them escaping. Our own exchange controls were as obstructive as any. A single currency would be one way to overcome them. Now, though, the barriers are down, money can flow freely across frontiers, we can pay our bills with plastic and debit our accounts at home or extract negroni vouchers from holes in the wall — and Europe’s biggest money markets are still in the City and outside the eurozone. All this was under way long before the European Central Bank arrived to impose its monetary policy on a dozen different economies, with different results. The euro, of course, is a totem, but so is, or was, the constitution.
The price is wrong
Totems come at a price, and Professor Patrick Minford has been working out what all of them will cost us. The short answer is: too much. The longer answer can be found in Should Britain leave the EU? (IEA, £15), full of tables and graphs and multi-decker equations, used by economists to mesmerise their readers. Our subscription to this club (or ‘net contribution’) is only the start of it. Then comes the Common Agricultural Policy, which does so much to penalise hard-working eaters. Then the barriers, all sorts of them, that still obstruct our trade in goods and services. Total, so far: £33 billion a year, just about. Even this would be dwarfed by the costs still to come, labelled harmonisation, and including directives and charters designed to confer (or remove) rights and gum up the market in labour. We may be invited, once again, to join the euro and enjoy its rollercoaster ride. We might even be asked to bail out our improvident friends. When Tony Blair sets out on his next round of euro-diplomacy, I hope that he will tuck this book under his arm. It might serve to remind our neighbours that we have a sticking-point, and to remind him, as the French have reminded us all, that sometimes in life the right answer is No.
Missing the moment
Pleased as I am that the penny (or centime, or eurocent) has dropped in France, I have to say that it has taken its time. A dozen years ago, when we were still labouring within Europe’s exchange rate mechanism, the French were preparing for a referendum on the Maastricht treaty. A Oui vote would open the door to monetary union. The Danes had already voted Nej, and I urged the French people to follow their lead. By the narrowest of margins they were found to have voted Oui. If they had taken my advice, they would have saved us all a lot of trouble.
Previous page
