17 May 2007
BBC Europe editor Mark Mardell on Gordon Brown's European credentials, and the complex Blair-Brown double-act that will have to be played out over the European constitution between now and December.
The diary is published every Thursday.
Mr Blair will decide in the next few weeks whether Gordon Brown has a happy Christmas, or an indigestible problem.
It's almost certain that Tony Blair's last appearance on the world stage will be in Brussels at the European summit in late June. There he will take a decision which will, one way or another, leave his successor with an unappetising dish on his plate when he turns up for the pre-summit dinner before Christmas.
The treaty could be harder to chew
It's the traditional dilemma. He could sign up for a new treaty that will inevitably cause howls of protest from sections of the press. Or he could turn it down and shatter the hopes of other European leaders as his very last act as prime minister.
I am told on very good authority that the two men are talking constantly about the problem of what sort of treaty should replace the European constitution voted down by the French and Dutch people. But Mr Brown's team don't seem to have had any contact with even the most senior civil servants dealing with the matter.
Their hands at the moment are spotless. No clues. No fingerprints. The Brown team are playing their cards infuriatingly close to their chest on European policy as on everything else. All they will say is that it will be a crucial plank of their platform.
It may be a plank more admired among the newer members of the EU than the traditionalists. Some say that Gordon Brown has a clear vision of the nation state and a strong sense of a globalised world, but isn't convinced that the European Union fits comfortably with either.
But that mysterious entity called "Brussels" may prove an ally in some of the battles he may want to have with other European leaders.
The prime ministers and presidents of EU countries have had their ups and downs with Tony Blair but the general assumption is that Gordon Brown will be worse, from their point of view.
He certainly shares the Eurosceptics' impatience with those who constantly do all they can to further European integration. If there is a ratchet effect, he'd like to put a spanner in the works.
But while many traditional Eurosceptics are angry at what they see as a plot, Mr Brown is more withering in his contempt. He scorns the notion of further and deeper integration as not merely wrong, but worse, as old-fashioned.
In his one big policy statement on Europe, Mr Brown says that "a Europe whose first goals were internal integration and harmonisation" has to ask "fundamental questions about traditional models of European development" and abandon the "older inward-looking model".
EU politicians think they know two things about Mr Brown. First, he's a bit of a grump. He doesn't enjoy the regular meetings of finance ministers in Brussels and very often sends a junior minister instead. The EU's way of doing business, slow compromise among equals, does not suit Mr Brown's taste for high-quality analysis followed by decisive action.
He also doesn't like being cut out of the most important decisions. But that was his choice.
The official British government position is still, lest we forget, that the political decision has been taken to join the euro
For the second thing they know about Mr Brown is that he blocked, and will continue to block Britain's participation in their biggest, grandest and in some ways most successful project: the euro.
The official British government position is still, lest we forget, that the political decision has been taken to join the euro but the economic circumstances have to be right before it happens. The problem for Euro-enthusiasts is that while Mr Brown has never said so publicly, he just doesn't think the euro can work in the long term. Not just in Britain. In the rest of Europe.
He thinks that the economies of the eurozone are so different that the project can only function if there are different interest rates in different countries. And no-one has explained to me how that could be possible.
But his criticism of Europe's economy does not stop with the euro. While the new French President Nicolas Sarkozy tells the European Union that it must not be a Trojan horse for globalisation, Mr Brown will warn it, as he has in the past "protectionism cannot work in a global economy".
While many in the old EU worry about the disappearance of traditional workers' rights, he argues that the labour market has to become more flexible.
He accepts that this will produce causalities and so the EU must also "provide security for the vulnerable" and more training in skills. While this might make them like him more in France and Germany, these are not policies that are carried out at an EU level. He's lecturing our neighbours on how they should behave, not coming forward with a new project for joint action.
He is particularly opposed to one possible measure of integration, pushed by Euro-enthusiasts. He describes plans to harmonise taxation as an "old, fatally flawed assumption". He argues that economic reality and the political respect due to the nation state mean there can never be any such move.
USES OF THE COMMISSION
But he will find allies for other economic policies. While Mr Brown wouldn't invent the European Commission if starting afresh, his people are coming round to the view that it has its uses.
The beast of "Brussels" has been so demonised in the British press that most people don't realise that the European Commission (what I take it most people mean by "Brussels") and the British government are hand in hand on a whole range of measures, despite strong disapproval of some of them from France and Germany, which is no mean feat.
Mr Brown's people are slowly beginning to see the worth of the commission in pursuing their polices
Mr Brown's people are slowly beginning to see the worth of the commission in pursuing their polices. He is against what he calls "wasteful state subsidies". The commission can stop them. He want monopolies in energy broken up by legal investigations. That is what the commission is threatening.
His biggest battle on the European front may be that old chestnut, the common agricultural policy. Or maybe it should be a walnut. Infuriatingly hard to crack without breaking your teeth.
Of course, any British prime minister with any sense would want the CAP changed, but Mr Brown will have an opportunity as the way the EU takes in and doles out money, the whole budget structure, is up for discussion next year.
A POLITICAL CHOICE
But it is the decision on the replacement for the European constitution that looms large.
Make no mistake, this is much worse for Mr Brown than Mr Blair. It's one thing for a leader who's been in office for years, widely distrusted, to come back from Brussels with a deal bound to be hated by at least large section of the press and say: "Tough luck. No referendum. This is what's happening." It wouldn't be pretty, but strong nerves can see you through a lot midterm.
In reality, Tony Blair cannot tie Gordon Brown's hands
But Brown's every decision will be dissected and its entrails read for signs of bad faith, bad judgment or bad intent. As far as I can see, this is the one big political choice we know is round the corner. And I do believe that it will be Brown's decision, however lily white his tries to keep those broad hands.
There's been some speculation that Tony Blair will go for a quick and dirty fix in June and so "tie Gordon's hands". Politicians can always surprise us, but this seems to me a shallow attempt to shoehorn this into "a Gordon versus Tony" narrative.
It's also politically illiterate. There may be some European leaders who are so desperate to get a deal done that they will urge Blair to sign up to what he won't have to deliver. But the more astute among them will realise they want Gordon's name at the bottom of any treaty, even if it is in invisible ink.
I don't rule out an element of play-acting. Gordon's people could be keeping their lips oyster tight so they can try to duck any mud that is thrown, and hope it sticks on the outgoing man.
But in reality Blair cannot tie Brown's hands. The June deal will only be a working sketch of a full treaty to be negotiated and signed in December. If Brown doesn't want to do a deal based on an agreement in the early summer he simply doesn't sign up to the detailed version before Christmas.
Even if the whole thing could be signed, sealed and delivered next month, which is so highly unlikely as to be a fantasy, Brown could just decide to hold a referendum and destroy the possibility of anyone getting a treaty. Mr Blair has long learned to negotiate with his next-door neighbour breathing down his neck and the last time will be no different.
Please use the post form below to comment on any of the issues raised in the diary.
Most Europeans like the US even if they dislike Bush, they like their nation-states, and they liked their old pre-euro currencies, which gave them lower prices and stronger economies. Most Europeans are also aware of just how small and (relatively) non-influential a part of the world the EU is, and will remain even if we do become a single nation state/currency. I'm sure the UK would be better off in NAFTA (which Gordon Brown has suggested we join before) and either with Sterling or the US dollar as our currency. We have always been more in line with their economy (the UK is the biggest single foreign investor in the US, as well as the same being true in reverse as stated by John Philips).
David Macdonald, London, UK
Monetary unions stimulate trade, efficiency, and increase welfare for participants. The Euro has been a success and most sceptics who complain about price increases can't deliver statistical evidence. Also the European Commission has brought many good things. Regulations, setting standards, dismantling monopolies, ogopolies and cartels, removing barriers. Had no European Union been there a lot of countries in Europe would have been a lot poorer. Yet these benefits are often claimed by national governments as their own success and when things go wrong they blame the EU. This slows down the process of European cooperation and it's a shame. I believe even further European cooperation could be the greatest thing that could happen to us Europeans.
Ernest, The Netherlands
I cannot see anything wrong if Britain joins the euro. I think that sooner or later we have to anyway, so it's going to happen whether we like it or not. The question is why should we be the last on everything?! It's about time we looked to the future rather than looking back all the time.
Pellumb Bara, London, UK
Some people believe the EU model doesn't work. And that might be true in some cases. But, look at Germany for instance: it's the biggest exporter in the world and continues to grow despite the euro and reunification. Britain, on the other hand, has lost most of its industries but has got a much more flexible economy. Britain and Europe have got a lot to learn from each other. People complain about the CAP. And it is quite understandable, 50 billion euros is a lot of money. Of course not everything is OK, some of the allocations are terribly wrong. In the EU, subsidies are no longer production-oriented, whereas subsidies in the US are still production-oriented despite its natural advantages in land and resources.
Juan Manuel Ghersinich, Germany & Italy
Many criticise the euro for blocking each country's monetary policy (no devaluation, no rate control, etc). But this is exactly what Europe needs, otherwise we would be seeing governments use monetary policy to avoid costly reforms. These reforms are happening today in Europe because of the euro and pay-off is starting to show up in the numbers: higher growth and lower unemployment. Long live the euro! With our without Britain...
Angelo Martins, Porto, Portugal
I warm to the idea of Brown as a PM. So far as the euro is concerned it has been admitted in Italy, Germany, France that it was the very worst mistake they made and they would like to revert to their own currencies forthwith. 69% of Britons have voted that whilst they do NOT want to leave EU they do WANT a looser relationship and to be governed by Westminster NOT Brussels. Too many directives have been forced upon Britain... Yes, we voted to join the EEC not the EU. Yes we want free trade with our EEC partners but also with the rest of the world, competition, not protectionism, being the name of the game.
JoeB, Foix, France. CE
Reading the comments of most British we can easily conclude that they only want to be in the EU to get the benefits of it and to better destroy it from inside, as John mentioned. The euro is a success and it will last far beyond sterling. The UK economy is not as strong as most British think. The value of a currency is just an illusion in most cases (including the UK). The UK economy is virtual. It¿s basically the financial sector, which makes it one of the most vulnerable economies in the world... In the EU there is no place for dubious situations. You are in or you are out. The sooner the British get out of the EU, the better for all other EU members.
Victor, Paris, France
I am no fan of Gordon Brown but if you are right about some of his attitudes to Europe and some of the upcoming issues surrounding it then I might warm to him.
Paul Owen, Birmingham, UK
We need to have a referendum on any proposed new EU Treaty. This Treaty will be an attempt to resurrect the rejected Constitution, with merely verbal changes. The Treaty is designed to reduce nations' powers, take away their vetoes over matters like immigration, and take a giant step towards a single European state. Every opinion poll proves that the British people does not want this, so we must insist on our sovereignty and our right to govern ourselves, exercise our democracy and reject the Treaty/Constitution.
Will Podmore, London, Britain
There is a stark choice to be made. Beyond dispute, the introduction of the Euro has political impacts beyond the economic. Do we, as individuals, communities, nations, wish to be governed by a sovereign parliament, or the European Commission? Whatever our own foreign policy prejudices on whether we are the US's puppet or should sign up to the horse-trading disasters of the EU, the real question is who best expresses the British people's desires and aspirations. To me the answer is clear - a British Parliament with control of its own monetary policy.
craig menzies, Aberdeen, Scotland
I realy envy the British, that their government got away with not accepting EURO. You can enjoy all the benefits (as written above) of dealing basicly with only two currencies (EURO and USD) and simultaneously keep independent monetary politics including interest rates. Cong.! On the other hand, the Czech Rebublic and other new members were forced to accept the "EURO-vision" at least in long-term horizon. What a pitty... And speaking about so called "EU Constitution" (or whatever name it will be finally labeled)? I hope the UK will remain henceforth on guard allied with Czech Republic, Poland and the other "EU-realistic" countries and this absurd idea wont ever come in force. "Cut down the CAP, lift remaining barriers to competition and througly apply a free movement of labour work" - that should be our message to Brusel.
Viktor Sanc, Prague, The Czech Republic
The criticism about the eurozone not having different interest rates is niaive. Just because the ECB has a base rate, does not mean that if the Italian Government wants to borrow money on the international money markets, then they will pay the same interest rate as if the Luxembourg Government was borrowing money. Part of it depends on the economic factors in both countries. Credit ratings/interest rates charged for lenders will always differ across economies, across sectors and sometimes even within countries.
Interest rates charged by lenders are a complex mix of factors and have never been (and are highly unlikely ever to be) uniform across the eurozone.
Tim McNamara, London UK
The Euro is a nice idea in theory but not in reality. Single interest rates work in countries like USA (and only just, look at the rust belt) but not in the EU. The EU cannnot engage in the huge cross national transfers required to make it work. Furthermore the labour market is far less flexible and mobile. In the USA if one area is booming it is far easier to move to than it is in Europe across national and linguistic borders.
Finally the EU is shockingly corrupt (look at the accounts) and still spends far too much money paying farmers to produce food that we could source from less economically developed countries. Until the EU gets its house in order and stops trying to destroy Africa with farm subsidies ever closer union seems repugnant to me.
Paul Allan, London, UK
Launching the Euro was always going to be an act of political faith rather than some finely calculated economis decision. Britain lacked such faith and probably always will. With my namesake at the helm, I see no prospect of the UK wanting to join and - if ever the "economic conditions were right" - the rest of the EU is unlikely to want such a selfish player on board. Brown is still a British mercantilist rather than a true internationalist as he claims: internationalism requires acts of political faith that his style of "leadership" eschews
Peter Brown, Vienna, Austria
Brown is right on the Euro! To keep a stable economy 5 things have to interact. Taxation,Exchange rates,Inflation,Employment(or more realistically unemployment),and finally interest rates! Thats why the Euro will never meet the critria for Brown...to lose access to contol any one of these main levers of the economy would make the balancing act so much more difficult. Swaping Currency from one to another is not the issue!
kevin betts, birmingham Uk
It is undeniably in Britain's interest to stay out of the Euro and indeed to stop European integration. Our economy has prospered while others' have stalled. We should prevent European union at all costs and simply play broker. We can be culturally and politically close to the USA and trade with Europe as well. Judging by the first actions of both Merkle and Sarkosy when elected, [to move their countries closer to America]it seems that they [privately at least] realise that it is in every country's interest to cosy up to the greatest economic, military, cultural and political power on the planet. To not do so would be political and economic suicide, and GB does not seem suicidal to me.
alan lambert, London, UK
Ive read again and again comments regarding the Eurozone's lack of economic growth etc , I would suggest that people actually verify the statitics the EU and the Eurozone fares better than the US with regards state deficits , and for the last 4 consecutive quarters have actually grown faster than the US economy , Germany i believe is actually growing faster than the UK aswell as many other Eurozone economies , Unemployment throughout the EU and Eurozone also continues to drop from 9% a few years ago today it is down to barely 7% and continues to drop , Also recently Europe surpassed the US for the first time since ww1 in stock market value a seismic shift , The world economies center of gravity is on the contrary shifting back to Europe , The Euro and the European economy by simply looking at the statistics is actually quite robust and one could even say has a brighter future than the US for the forseable future hence my incomprehension of all these baseless doom and gloom .!
Eric Rossi, Brussels , Belgium
I think what we see from Brown is simply a reassertion of that old British characteristic of pragmatism. This is what probably sets him apart from some of his soon-to-be Euro counterparts, who see the EU not merely as a single market (SEM) but as a means to achieve a grand political objective. Where Brown sees flexibility and decentralization of power as the key to growth in a club of 27, his opponents hold to a creed of ¿ever closer union¿ as the raison d¿etre of the EU.
It is political will to integrate and transfer money from rich to poorer regions. Whether at a regional, national, continental, or even global level. Utopia is where we have one huge global union with one currency. If you extrapolate what is happening this means that, just like Northern England or the rust-belt states now, Africa and South America will be supported. The "independent nation states in a monetary union" idea is just not feasible in the long term as has been pointed out so you can see where we're heading with globalization: a global harmonization.
Peter Donker, Cormondrèche, Switzerland
Ironically, the Euro's success is the reason why the UK need never join it. Dealing with dozens of different currencies was painful for business -- but dealing with three (dollar, euro, pound) isn't actually much worse than dealing with two (dollar and euro). We've already got the benefit of a reduced number of currencies, and we don't have to suffer the pain of our interest rate being decided by Frankfurt. Thanks, Europe, you've taken the pain for us!
Will Billingsley, Cambridge, UK
When people, especially the press, refer to "Brussels", they are using the Commission as a scapegoat by making a clear distinction between national political decisions (all good) and the ones the national politicians would rather bury, or blame someone else for.
The fact of the matter is that "Brussels" is the Council of Ministers, the leaders of all the 27 EU countries, who push through legislation EU-wide and then give the Commission the blame. How handy.
Raymond Goslitski, Leuven, Belgium
The whole issue of the Euro revolves around globalisation. Without a form of protectionism (which has been proven time and time again to be destructive)globalisation is inevitable. In my opinion Britains unwillingness to integrate with the Euro comes from a wish to choose America as a partner for the future. With China, India and other developing nations threatening the wests economic dominance we are having to create larger economic power bocks in order to compete. From a geo-strategic perspective it is more advantageous for America to use Britain as it is nearer to Europe. We are going to have to choose either union with America or Europe whether we like it or not. Although there may be difficulties with the Euro it is short sited to dissmiss it. Britain cannot compete against these power blocks and if we are to remain one of the worlds major economic powers, we are going to have to make a choice soon.
Stefan Larder, Welshpool, Wales
If Britain had the Euro then prices would probably drop. Retailers would have to explain why the prices in Britain were higher than in the other countries, and they would not be able to mask the difference with currency fluctuations.
Bill, Haifa, Israel
There has, to the best of my knowledge, never been a successful audit on the minting or production of Euros. Joining a currency that might well be fraudulently produced, could well cause a financial breakdown. The very low percentage required for borrowing euros, pose questions on how firmly based the currency might be. Of course the euro becomes solid if we accept it for buying our industries in this country. An audit is needed.
M.Turner., Redruth, U.K.
I am English but have lived half my life outside the U.K. I speak 6 languages fluently, and am at present learning Mandarin and improving my Arabic. I have lived in 'Euroland' since the Euro was introduced. Prices have risen enormously. If I translate back into old currencies then the increases appear scandalous, especially in the food sector. I blame this both on oportunistic personal greed and lack of local interest rate control.
The property price bubble was created by artificially low interest rates. I do not, at present, see any advantage for Britain in joining the Euro. When-(or if )- there is a window of oportunity due to the convergence of economic cycles then the issue can be put to the British Public to vote upon in a democratically free and fair matter. Until then all arguments for and against are mere speculation.
Ian Richard Ward, Alicante. Spain
I totally agree with Ian Richard Ward of Alicante. Like him I have lived in Euroland (several times, Spain and France). Food, property, fuel, almost everything went up on the introduction of the Euro,some thnings are cheaper than in the UK but many are the same. As Mark Mardell suggests, Gordon Brown believes there are too many eonomies in the EU, but only 3-4 are in the top league (UK, Germany, Italy and France) If the UK joined it would be a total disaster. If widening goes on the whole projecbtwill eventually implode.
clive Cunningham, Frome, Somerset
Up here in Teesside (Northeast England) we have the same interest rate as the Home Counties despite being one of the two poorest British regions (with N.Ireland). But it would be madness to suggest regional currencies and interest rates.
As China, India and North America grow and grow, it will soon be madness to suggest this in Europe.
Max Patrick, Middlesbrough
Some time ago, William Pfaff wrote an article in the IHT in which he said that there might have been some advantage in having different currencies and interest rates in the United States so that the "rust-belt states" could have devalued their currencies to help their local economies....
IF GB is so fixated on the nation-state, why doesn't he propose taking the UK out of the EU and into the European Economic Area along with Switzerland, Iceland and Norway ?
john s, brussels belgium
Monetary union can indeed work across Europe, provided that the nation states relinquish their control of fiscal policy also. That, as everyone knows, is the ultimate goes of integrationists ("ever closer union"). Brown doesn't want it, neither do many British, nor probably do close to half the EU population (remember even the French approved the Euro 50.1% to 49.9%). In the words of Italian Finance Minister of the time "It [the Euro] is a decisive step towards ever closer political and institutional union in Europe. Above all, it is political".
Mike, Sydney, Australia
All the criticisms levelled at European institutions can be aimed at national ones. What sense one set of interest rates, when there are big differences in economic performance from city to city, England to Scotland to Wales, in Britain? The globalisation arguments Brown uses to support nationhood also argue well for a dismemberment of the UK! Does he like that idea?
Mark Casali, Munich
I am not sure you can say "it was his The answer to Mark Casali's question about the difference between EU and national institutions is that national institutions and under democratic control while the EU institutions are not. And one interest rate is right for Britain because nations make transfer payments between their regions to even out imbalances in its effects. There are no such transfer payments within the EU, nor should there be.
David Walters, London
(Gordon Brown's) choice" to be excluded from EU economic meetings. The split between the Council of Economics and Finance Ministers (Ecofin) of all 27 countries and the meetings of Eurozone finance ministers was something to which GB was opposed. If other countries create such a split to exclude the UK finance minister from important decisions then they can hardly complain he rarely turns up to Ecofin meetings anymore to discuss minor topics. The benefit for Britons from being outside the eurozone is that important decisions relating to our economy are still taken in Westminster based on their impact on the British economy. If the only cost of this is that our Chancellor is excluded from meetings of eurozone finance ministers then it is a price well worth paying. It is the British people who overwhelmingly reject the euro currency and GB simply recognized the political impossibility of forcing it on us. If TB had the referendum he wanted on this issue he would have lost it and probably had to resign long ago, possibly hastening the end of the Labour government itself. So GB has made all the smart moves here.
Is the euro a success?
I have lived between France & the Uk for 10 & watched the transition, I have not noticed an upturn in the european economies or a fall in prices due to cross border price competition.
What I have seen is a 30% increase in retail price of food & most building materials. Whereas in the Uk the prices have been relatively stable, I now frequently find it is worth importing in bulk from the uk, which 10 years ago would have been laughable.
I am a europhile who would like to see the euro in the uk, but to call it a success can only be referring to the profit margins of the large multinationals.
Ben Hinton, toulouse , france
It is sad, very sad, that UK political figures do not realize the value and importance of the Euro.
It is impossible to talk about an open European-market, flexibility, and global economy when foreign politics are decided locally rather than at an EU level. That is not a true international-political-economy, it's utopia.
Alessandro Garuzzo, New York, NY - USA / Venice - Italy
Why do the press and so many others let people like Brown keep on getting away without challenge when he and they essentially claim that the US, China, and Russia do not exist? That is exactly what he is saying when he claims that very different economic regions cannot get along with a unified currency and common basic interest rate. The differences between Greece and Finland, between Portugal and the Netherlands, are no greater a strain on a unified interest rate and common currency than the differences that have existed for long periods in other countries that have monetary uniformity. It might be bad or good for the UK to join the Euro zone, but for anyone, even Brown, to assert that his reasons prove that the Euro cannot last is blatant falsehood. But no reporter seems capable of even asking him (and others who spout the same line) about their fatuous claim. Why?
Keith A. Nier, Madison, NJ, USA
On what basis do you say that "he just doesn't think the euro can work in the long term"? I hope you're right, and I entirely agree, on the grounds of both the unworkable uniform interest rate and a lack of labour mobility within the EU, caused mainly by cultural (notably language) differences. Do you think he will be brave enough to say so at some point?
Miles, Brighton, UK
Miles - what lack of labour mobility? My experience of being a Brit who has living and working in the UK, France, Belgium and currently Greece, and find large foreign communities in all of these places tells me that there isn't a labour mobility problem. Only a Brit would cite "language differences" as a barrier to movement within Europe. Other people simple learn new languages. Also, can we stop dumming down the EU by referring to everything as "Brussels". We're talking about people, countries, institutions and processes, which the UK has a great deal of input in and influence over. A little education would go a long way.
Emmanuel Mendonca, Athens, Greece
The Euro is undoubtedly a huge success. It is replacing the Dollar as international currency. The UK is in the EU with the sole purpose of destroying it from the inside, or at least, to prevent any political union of the EU. The traditional role of the UK in the world is to be a puppet of the U.S. bending over every single time the U.S. wants to. The U.S. investment in the U.K. is larger than all the U.S. investment in Asia. So, the UK economy is to a very large extent controlled by the U.S.
The EU must face the U.K. with reality. If the UK wants to be part of the EU project, it must show full commitment to the EU project. If the U.K. doesn't want to be part of the EU, then it must leave the EU. Nobody will miss the U.K. in the EU. What must not happen is the EU allowing U.K. membership if the U.K. doesn't show full commitment to the EU political union. So far the U.K. has chosen to be a puppet of the U.S., the EU must not be a puppet of the U.S.
John Philips, U.S.
John - I don't believe that the UK has become a puppet of the US, although recent global political instances have tended to point to the contrary (ie. Iraq). I think there has to be a balance between nation-state membership and autonomy of each state, and that is the crucial problem here.
Germany and France object to many EU considerations, it doesn't make those countries any more 'anti-EU' than the UK.
As for the Euro, when you consider the Euro is particularly weak right now (and the GBP particularly strong) is there any point in joining a single currency? The only reason I suspect the Euro is replacing the Dollar as international currency is because the Dollar is even weaker than the Euro.
I have many friends who live in Germany and other parts of Europe and they tell me that they really wish their country had not joined the Euro, because it's just made economic stability that much harder. If people are saying that several years after the currency was instated, then asking the UK to do the same is a pretty laudable suggestion.
I agree that if the UK doesn't want to be a part of the EU it should not be a member, but just because we disagree on certain matters doesn't mean to say we shouldn't be a part of it. We're either a puppet of the U.S. or a puppet of the EU; why can't we be neither? It's not too outrageous I suggestion is it?
Svend Joscelyne, Southend-on-Sea, Essex, UK
It will all come down to horse-trading, as it always has. Britain (supported by our new friends in the East) pushes for level-playing-field open markets, especially in financial services, and France and co. try to shackle our harder-nosed brand of cross-border capitalism with "social" legislation, tax-harmonisation or whatever. The Brussels commission tries to ride both horses at the same time. The deal waiting to be done on the Constitution is to take both sides' economic/social "visions" out of the document, leaving a simple text spelling out how many votes, commissioners, vetoes etc. each member state has. Then they can get back to horse-trading in the time-honoured manner.
Nick, London, UK
Beyond macroeconomics, the euro's key importance is that it is an omnipresent, everyday thing. It's there day-to-day in our lives, in our wallets, in our pockets: a symbol that a united Europe is a normalised, natural thing. Perhaps this is a handicap to Brits, condemned by Sterling to equate 'Yerp' with 'abroad', and continuously jabbed in the groin by Brittania's trident on the 50p piece. No wonder Gordon Brown carries that look of chronic pain.
Pete Thomas, Lisbon, Portugal
Firstly, revising the CAP is about as easy as revising the British National Health Service and for much the same historical and emotional reasons.
Secondly, The arguement against jioning the Euro are rediculous if you look at China, India, the U.S.A. and even Russia: All have vastly different regions or States with very different economies but manage with a common currency and interest rate. The high Pound, largely due to the substantial higher inerest rate, coupled with conversion costs has made it much more difficult for British manufacturers to compete in Europe. It also make visiting the U.K. much more expensive will encouraging people living in the U.K. to travel abroad for their holidays.
Thirdly, the proposed European Constitution should never have been made the subject of referendum. The Spanish voted for it, but if the P.P. had still been in power would have voted against it as did the French. In other words,it was seen as a vote for or against the National Governments.
Forthly, the E.U. will continue to grow into one country because that is what the majority of the people of Europe want and no national goverment will be able to stem the tide.
Mike Dixon, Barcelona, Spain
I have to take issue with Mike Dixon.
Firstly, the Euro is not working well for all countries e.g. Spain and Ireland are suffering as they need higher interest rates to reign in their economies but the rate is lower for germany which has been struggling.
Secondly, you can't compare with US and Russia which are unified countries with a common language and culture.
Thirdly, if the majority of Europeans want a united Europe why do they keep voting no in referenda on the subject?
Gareth, Reading, UK
In Ireland, we saw price rises because of the introduction of the euro but since we were in the throes of monumental inflation at the time, things probably would've gone up in price anyway.
However other Eurozone countries saw opportunistic price rises as well and it's from those mistakes that the UK must learn. I really believe there's little or no point left in the UK remaining in the EU without adopting our currency and if they do choose to leave, they mustn't receive special treatment. Any state now looking to join the EU is obliged to join the euro; why should a large country of 60m people receive all the benefits (including a generous rebate until recently) of membership and not use our currency?? I was surprised, after years of reading how much the EU takes of British taxpayers, to see so many projects on a recent trip to Merseyside with EU funding notices. The euro, like this funding, is one of the many benefits of membership.
A stronger, more sovereign EU - with the full backing of the UK in all areas - will have the gravitas to stand up to the US on the world stage; not in a military way but in a moral way. The EU consists of states that have experienced more war and terrorism than the US ever have and the sooner its experience in conflict resolution is used to solve, rather than inflame, problems throughout the world, the better.
Joe, Ashbourne, Ireland
The UK has since the initial introduction of the Euro been one of the fastest growing and successful economies in Europe. A major reason for this has been liberal market economics and full control of its currency via interest rate and tax policy. The evidence to date is that the Euro has not succeeded in its economic targets of improving EU growth and competitiveness.
The arguement that other large countries have single currencies is not an arguement for full integration, rather flags the problems a single currency causes- with wide discrepancies across regions (as noted even within smaller nation states).
The Euro is also not just an economic call but a political and cultural one. Contrary to comments by some people here it would seem most people don't want to be part of a large federal institution. Look at the break up of the Soviet block for evidence and even splits of smaller E European nations (and Scotland!). On the subject of larger countries, do people seriously want to use undemocratic Russia and China as examples of successful nation states that the EU should emulate? The US is the exception, but has a liberal market economy (certainly more so then Europe) and a common language (again more so than the EU). The UK is culturally, politically and economically far more similar to the US than the EU, but this is not an arguement for unification with the US; though that would be far preferable to further union within the EU.
Russell Wright, London, UK
"If Britain had the Euro then prices would probably drop. Retailers would have to explain why the prices in Britain were higher than in the other countries, and they would not be able to mask the difference with currency fluctuations" - Bill
Hasn't happened in Ireland where prices are stubbornly higher than both the UK and continental Europe. The excuses given are insurance, workforce and property costs; the real reason is retailers here have found they can get away with it
I strongly support the principle of a single european currency. For people and business alike a separate currency adds costs to travel and trade.
I was also one of the many UK citizens that voted for joining the common market. I did not, however, vote to join a european super-state dominated by political wheeling & dealing between 2 of its members, and nor would I now.
Nor do I think the majority of my fellow citizens would, given the chance to vote again.
One of the primary factors in deciding the viability of a currency is its acceptance by the majority of the population in the market place. If the Euro can become more acceptable in the UK than the Pound it will be demanded and then become the de facto currency. Supported, if necessary, by a referendum.
This is a far better way of choosing a currency, and the timing of a change, than political dictat. I'm sure that many european citizens would agree, from their current experience.
John Lloyd, Cheshire, England.
the E.U. will continue to grow into one country because that is what the majority of the people of Europe want - Mike Dixon, Spain
No we don't. Netherlands must remain sovereign.
As for the Euro, one cannot have monetary union without political union. And since political union won't happen the monetary union will have to be dissolved. Its better too. Better for every country to have its own monetary policy.
Did you know that the Netherlands was the only country that actually met the Euro criteria? All the others cheated to get in, and we ended up paying for their cheating. Did we not like that.
When will politicians finally realize that the people do not want political integration?
Marcel, The Hague, the Netherlands
These criticisms of the Euro are unfounded. It make no more sense to talk about Spanish or Irish inflation than it does to talk of Scottish or Mancunian inflation. Inflation is something that affects a currency zone. You have to distinguish between wages and prices rising while the currency falls to compensate (true inflation) and a situation where wages and some prices (due to local labour costs) rise in real terms. The latter is simply economic growth and accounts for most of the supposed "inflation" in Spain, a successful economy.
What the one-size-fits-all interest rate across Europe does is as follows: it punishes slow growing economies by giving them higher than ideal interest rates, thus increasing the pain and forcing them to implement reforms to their economies that they've been putting off for years (e.g. recent changes of government in France and Germany). And it rewards dynamic, fast growing economies and channels more investment into them by giving them lower interest rates than they would otherwise have had.
To put it another way, the succesful economies get low interest rates they couldn't have had with a standalone currency for fear of triggering inflation. But as part of the Euro the lagging economies act as ballast to hold Euro-zone inflation down. Britain has prospered outside the Euro. We'd have prospered even more inside it.
There is no need for the UK to join the Euro. We have a strong relatively stable economy. If you look at the projects which now get European Funding you will see that we do indeed get benefits from being members, but then plenty of nations have benefitted from the amount the the UK has put in. Don't forget that if the UK left you would lose more income to the EU than the UK gets back. I think the last set of figures I saw said that every mand woman and child in the UK contributes £60 a year to the EU, that is hardly a small amount from 60m people.
As for the creation of a European Super State, it may well have been one of the guiding principles of the EEC but times change and the needs of nations change, there is no longer a threat to European security from Germany or the USSR. A zone of stable peace has been created, and lets not forget that Brtian played a larger part in this than any other European state. Where is the need for a European Federal State?
The protectionism of Europe has never been a traditional Bitish policy which went along the lines of free trade, this is why there was an issue about joining the EEC and abandoning the Commonwealth - which was an easy decision in some ways!
Britain is an important player in the EU and contributes far more than it gets back, until the democratic deficit is cleared I do not believe that there should be any further integration into Europe.
Tom O'Donovan, York, UK
I can answer why "he does not think it will work in the long term" - assymetrical shocks: if the component economies of the Euro react differently to a shock to the economy (either an internally generated event such as German unification or an external event such as the doubling of oil prices) then a single interest rate ends up amplifying the economic effects. We can see this happening already in Europe. Basically you end up going back to a boom and bust cycle. If you believe that these types of shocks are common then you will also conclude that the costs of joining the Euro outweigh the benefits. Of course I prefer to decide on economics not politics, if the Euro is clear beneficial to the UK I would want to join, if it clearly wasnt I wouldnt, if it is totally uncertain why take the risk of joining - politics only matters if the economic case is clear that it would not make much difference to Britain's growth
I'm shocked that so many people here think that a single rate does not work. It does, wake up! I live in Sydney, unemployment in some areas or Sydney runs at 11%, unemployment at some mining towns in Western Australia runs at around 2% one interest rate though. What matters is same rules and regulations. The economies of NSW and WA are as different as the economies of Finland and Belgium. All four of them are doing fine under singles rates, unless the UK is so "special" I don't see what the big deal is! As for the single culture point of view, that's another lot or rubbish dished out. An English a Scot and a North Irish have got as much in common to each other as they have with a Belgian or a Dutch, which in turn is far greater than a Vietnamese living in Sydney NSW has to say an aborigine living in WA. So again it comes down to agreeing rules and regulations to play with, within an entiry. Last point influence, if the UK wants to have any influence it can only do it, as part of something influential, either the EU, the USA or become an Indian or Chinese overseas territory! Having said all that the UK can choose to just be rich, but have the world influence of Switzerland or Dubai! All its not lost, its just what one wants to do, I guess that¿s were Mr Gordon Brown can help
Chris, Sydney, Australia
Keith A Nier is quite correct to point out that there are already currency zones that include areas with a vast disparity of wealth as in USA (and indeed all countries). However, the difference in Europe is that Brown will always have to appease his own electorate in order to stay in power and how likely are they to vote for him if he is proposing to aid or prop up other countries' economies for the 'greater good'?
Several times through his piece, Mardell reports on the press' reaction to the scenario. Who cares what the press feel!!??
This is a subject on which the people need to be making the decisions and NOT the press.
If the press weren't so voluble and opinionated in the UK we might for once have an informed public able to make their own decisions unabated.
The press is there to report on happenings. Report what has happened and let the people decide
Kon Sinigaglia, London
Germany is not struggling. It has higher growth now than the UK. I live there and I wont be coming back to the UK!
A lot of people refer to US, Russia, China and India as successful with one rate for the whole country. Sorry there not! Some regions do well and others struggle. This is partly offset by differing taxes. As a nation we should regional variants for our own taxation. More centralisation leads to collapse - ExUSSR for example, China also had to change.
John Storm, Birmingham. UK
It looks to me like if the UK politicians continue to hesitate between joining the USA or the EU. I tend to think that we in Europe would be better off if they decided for joining the USA . Europe is strong enough to go forward without his Trojan (USA) horse.
staf fierens, belgie
Mike Dixon's imperious claim that the "E.U. will continue to grow into one country because that is what the majority of the people of Europe want" is devoid of substance. Even the 'warm' EU Eurobarometer polls note disparities across the EU, both in terms of how much power each country wants to be exercised at EU level, and how people reconcile themselves as an "EU Citizen". A recent Open Europe poll also found that only 28%(only 11% in UK) of citizens wanted further powers to be given to the EU.
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