The troubles of the euro should remind people of something important, writes Spectator columnist (June 5) and former editor of London’s Daily Telegraph, Charles Moore. This is that people who opposed the UK going into the Euro were dismissed as “head-bangers” and “swivel-eyed”.
He points out that it was only because he and other opponents banged their heads for so long that it became impossible for either major party to take Britain in, at least without a referendum, or as Australians would say, a plebiscite.
(The difference between a referendum and a plebiscite is that with a referendum the details of the proposal are on the table before the people vote and not after. Approving a plebiscite is the same as signing a blank cheque.)
Charles Moore says that if Britain survives the economic and political catastrophe which threatens the Continent, “it will be because all the mad people were sane, and all the men of moderation were barking”.
In the meantime, the President of the European Union, Herman Van Rompuy has admitted that Europe’s “man in the street” was misled for years over the vast political and economic implications of the creation of “Euroland”.
“Nobody ever told the proverbial man in the street that sharing a single currency was not just about making people’s lives easier when doing business or travelling abroad, but also about being directly affected by economic developments in the neighbouring countries,” he said.
“Being in the ‘Euro zone’ means, monetarily speaking, being part of one ‘Euroland’.”
According to a report by Bruno Waterfield in Brussels for the London Daily Telegraph (May 26), public anger over the cost of supporting other euro zone governments, so far totalling £470 billion (more than AUD$800 billion) in taxpayer-funded loans or guarantees, has created new political instability in Europe.
This is especially so in Germany where Chancellor Angela Merkel’s coalition government lost its parliamentary majority following a furious reaction to the Greek bail-out that cost Germany’s taxpayers the equivalent of AUD$33 billion.
Opinion polling published by Germany’s Stern magazine found that over three-quarters of Germans now believe that their country’s national debt is out of control, a figure that has risen by 62 per cent since the euro bail-out.
“Today, people are discovering what a ‘common destiny’ in monetary matters means. They are discovering that the euro affects their pensions, savings and jobs, their very daily life. It hurts,” President Van Rompuy concedes.
He admitted that the euro had been flawed from the moment of its creation in 1992, a situation that had not been made clear to voters. “We are clearly confronted with a tension within the system, the ill-famous dilemma of being a monetary union and not a full-fledged economic and political union,” he said.
“This tension has been there since the single currency was created. However, the general public was not really made aware of it.”
The EU President was a minister in the Belgian government at the time the euro was adopted. Why didn’t he and the other proponents of the currency warn the people at the time that this project was obviously inherently unstable, as those of us teaching at the time did? (The same is true of suggestions that Australia and New Zealand should have a common currency).
José Manuel Barroso, the President of the EU Commission told the Frankfurter Allgemeine Zeitung that, until now, “Germany has been one of the big winners from the euro. More politicians in Germany should say that clearly. It was not Greece, Ireland or Spain who invented the euro. It was a German-French project.”
The British political class was eager to join the euro, without explaining the costs and dangers to the people, in the same way that they joined what was to become the EU. If they could have, they would have joined the euro without a referendum. The British government did that when they adopted the EU Constitution, renamed the Treaty of Lisbon, by abandoning the promise they gave that the people would be consulted first in a referendum.
Mr Waterfield reported that research published by Open Europe highlighted the contradictory statements made by EU leaders during the euro zone crisis, including Mrs Merkel’s assertion two months ago that “there is no possibility of paying to bail-out states in difficulty”.
Vincenzo Scarpetta, an analyst for Open Europe, said: “The euro zone crisis is not simply about economic failure but also (about) a breakdown in trust between the political class and European citizens. The EU elite simply got it wrong on the euro.”
David Flint AM is a former law professor at the University of Technology, Sydney. He is currently national president for Australia of the World Jurist Association, a body devoted to upholding the rule of law. His comment first appeared as an opinion column of the national convenor of Australians for Constitutional Monarchy, at www.norepublic.com.au