Next test for the euro will it prove to be worth the paper it's forged on?
CHRISTOPHER FILDES
Lenin was transported across Europe in a sealed train — like a bacillus. Churchill said — and now it is time for the euro. Mysterious trains, unidentified in the working timetables, have been rumbling through the night to unspecified destinations. They are whispered to contain the notes and coins which will burst upon a continent when the new year comes. Watch the wall, my darling, when the euromen go by. At the European Central Bank, Wim Duisenberg, whose promises to pay they are, chose this week to put them on show. He will excuse me for saying that they look more like the sort of meta-currency coupons and tokens once handed out at petrol stations. The Turkish 10-million lira note. with a broad silver band running through it, is far more distinguished, though the decline in the lira's fortunes may mean that it costs more than its face value to produce. All over Europe, this summer, hoarded notes have been coming out from under mattresses, to be passed to builders and car salesmen in untraceable transactions or shipped across the border into Switzerland. Fears are now being voiced or put about that the euro in its turn will be hoarded, forged or laundered, but these are all of them, in their way, compliments, which the new currency has yet to earn. Some countries, like Turkey, have notes which would not be worth the paper they were forged on. There are African countries whose money, even if genuine, stands at a discount to forged $20 bills. It has been the euro's achievement to lose one-fifth of its value before it even got out of its sealed trains and into its citizens' pockets.
Phoney warriors
HOW close we came to all this is a story told by Alan Clark in his parting shot, The Tories, which must be required reading just now. Early in 1940, he says, the Foreign Office, inspired by an idea of Arnold Toynbee's, wanted us to share a currency with France. We were allies in the Phoney War, so this would be part of a perpetual association, already in progress, which would (it was claimed) provide a real peace aim for the youth of England and France. Backed by 'Rab' Butler, this notion was launched in Whitehall on 30 April. The Treasury had objections. It fielded a mandarin called T.K. Bewley, who said that we could not be expected to support the value of the French franc indefinitely. Lord De La Warr thought that our schoolchildren ought to learn more about France: 'There are a number of unemployed French chefs in London who we might get to go around the schools and cook French meals.' Then T.K. Bewley returned to the charge: 'A common currency had never been possible historically without a common government.' The meeting scarcely had time to adjourn before the Phoney War became real.
Ever closer union
SIX weeks later, with Churchill in power and the Germans sweeping through France, the Foreign Office's pet idea came up again, this time as an offer of joint and indissoluble union. The two countries would henceforth be one. No one had thought of asking Parliament about this constitutional change, but time was pressing, and the French might be encouraged to stay in the war or at least to leave their navy and the colonies behind them. Nothing came of it, and France spent the next few years inside a European economic area directed from the centre. Since then, that first Whitehall meeting must have been replayed a hundred times, with the Foreign Office anxious to negotiate by concession, the Department of Freebies looking forward to more cultural exchanges, and the Treasury suspicious. Just now its mandarins are working their way slowly through the Chancellor's five tests for joining the euro. May the spirit of T.K. Bewley be there to remind them that a common currency requires a common government.
Back from the grave
LOOK who's back? Woolworths. At the end of a summer of sumo wrestling in the boardroom, this once great name from the High Street's past has rejoined the stock market. It was a worn-out business two decades ago, when an earlier bout of wrestling got it taken over, in the hope that it would be worth more dead than alive. That branch in Cheapside where I used to buy my collar-studs — shut the store, sell the site, repeat ad lib . . Woolies lives, though, has moved on to pick'n'mix sweets, and is all set to provide its new chairman, Gerald Corbett, late of Railtrack, with another in his impressive collection of retirement cheques. I wish it well, but the general rule is that businesses have their natural life-spans, and that when they wear out, it is a waste of capital and energy to keep them going. Think of the collar-stud industry. There are other examples around, some of them in the High Street.
Boom and bust
NO more boom and bust? We seem to have both. We have already combined a boom in house prices with a decline in manufacturing industry, though this trick might have been better the other way around. For our next trick, we are combining a boom in the shops with a decline in advertising. 'Billings nose-dive as recession hits', complains Campaign, the adman's journal. On last month's form, retail sales looked unstoppable, but perhaps the goods are walking out of the shops by themselves, unaided. We have also combined the lowest level of unemployment for a quarter of a century with a collapse in recruitment. The agencies and headhunters are missing their forecasts by miles, and the stream of sits vac ads is down to a trickle. Marvel at these tricks while they last. The boom side and gloom side cannot both be right, and I think I know which is, but something has to give.
Founder's kin
HAPPY birthday — 70 this week — to Sir Evelyn de Rothschild, chairman of the family bank and great-great-grandson of the founder. He can claim to have vindicated the prophecy made to me thirty years ago by one of his competitors: 'Which of the merchant banks do you think are for sale? I should think they all are. This one certainly is.' Then, after a moment's pause: 'All except Rothschilds, of course.'
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