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Remembering the happier days of the euro dream

As the financial crisis in the eurozone continues, former BBC Europe correspondent David Shukman recalls the optimism that helped launch the euro project.

The Pont Neuf bridge lit up with the symbol of the euro
Launched in 1999, the euro became a cash currency in January 2002

It might sound odd to recall a particular taxi ride in Germany all of 22 years ago.

But it was in Hanover in June 1988 that I first realised that what sounded like a far-fetched fantasy - that Europe would create its own currency - might conceivably lead somewhere.

I was reporting on a European summit. Margaret Thatcher, then prime minister, was there and was not happy.

In an interview, she had fixed me with a laser-like stare and zapped any prospect of economic and monetary union.

The very idea, in British circles, seemed a non-starter. I put that to a companion in my taxi, a French journalist, sharing the journey to a briefing.

He was adamant about the new currency, strikingly so. Echoing what I had heard from many others, he said it is something we must have, we will have.

At the time, I found him a bit patronising.

But he was proved right because three years later, the Maastricht Treaty set out a plan for a common currency.

And then on 1 March 1998, the deadline for applications to join it came - and, to my amazement, country after country piled in.

Bending the rules

I was based in Brussels by then and steeped in the detail of the negotiations.

Like many I had assumed that - at best - half a dozen nations would make the grade.

Strict rules had been set. Deficits and debts had to be below a certain level.

But on the day, along came Italy - its debt far higher than allowed.

It was the same with Belgium and others like Spain and Portugal, which had somehow scraped through.

These very different economies had to share not just a currency but key policies as well

France was accused of fiddling its books to qualify and even Germany, that bastion of stability, was challenged about some funny business with its gold reserves.

Only Greece was judged to have failed, though it too was to be let in 18 months later.

I put it to one of the commissioners that they were bending the rules.

"Not at all," he said. But in reality they were being applied, let us say, imaginatively.

If a country's debt was above the limit but falling towards it, well, that was OK.

A women holds a euro coin outside the European Central Bank

And therein lay the seeds of the disputes we are seeing now, because these very different economies had to share not just a currency but key policies as well.

The eurozone would have one interest rate, for example. And a rate to suit Germany might not suit Portugal.

In fact, just after Portugal qualified, I was in Lisbon and encountered real fears about the euro.

In the muddy alleyways of a slum, a priest led me past piles of rubbish to his makeshift church.

There was serious poverty here. This could have been the developing world.

And the priest was worried that joining the euro could make things worse - that the gap between rich and poor would widen.

By contrast, in Germany, in the months before the launch, I heard resentment and even anger at the approaching loss of the Deutschmark.

That symbol of post-war success was seen as being at the mercy of the free-spending countries of the Mediterranean, a complaint echoed more loudly now.

Dreams of stability

In Britain, still weighing the possibility of membership, there were fears about new taxes.

Much of this was shocking to people. But it should not have been, because for decades a blueprint has existed for Europe's future.

File photo (1952) of Walter Hallstein
Walter Hallstein was one of the signatories on the Treaty of Rome

I found it one rainy afternoon in Brussels in a second-hand book stall.

It is called Europe in the Making and it was written in the 1960s by the first president of the European Commission, Walter Hallstein.

The aim, he wrote, went far beyond a shared currency.

The point was political union, not as part of some sinister game, as he put it, but to improve the quality of life in a region scarred by war.

The euro, in this view, could be seen as a stepping-stone to a closer, more peaceful Europe.

Mr Hallstein died before New Year's Day 1999 but he would have enjoyed the blue and gold balloons rising at noon into a grey Brussels sky.

An electronic board revealed the rates for converting the national currencies into the euro.

Champagne was opened. And the most senior commission official told me, with some emotion, how he had never lost faith in the project.

But drowned out that day were the voices asking: "What happens if Greece goes bust? How generous will the Germans feel?"

And above all: "Can you share a currency without a say in how other countries run their finances?"

That demand has surfaced now. In its short life, the euro has successfully weathered storms to become a globally-traded currency, but the strain now is the most severe.

And I wonder if that Frenchman in the taxi ever thought it would come to this.

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