British Politics Bubble Over Europe's Plans For a Single Currency
THE argument about creating a single European currency is coming to a boil, with Britain - as usual - making unhappy noises from inside the pot.Skip to next paragraph
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With a key European Union (EU) intergovernmental conference looming next year, pressure on the 15-member nations to agree to opt for a common currency is intensifying.
Jacques Santer, president of the Brussels-based European Commission, sparked a lively debate in Britain on Sunday by suggesting on a London TV show that Prime Minister John Major should "train" Brits to accept the need for a single EU currency.
Lord Tebbit, a former chairman of the Conservative Party and a leading "Euroskeptic," told Mr. Santer he was trying to "delude people into giving up their right to self-goverment."
More significantly, senior advisers to Mr. Major disclosed that they were counseling the premier to come out against a single currency and other moves aimed at deepening European Union unity. Malcolm Rifkind, a cabinet minister not noted for Euroskepticism, said Sunday that Britain "would lose control of its destiny" if it joined a single currency.
Santer, Lord Tebbit, and Mr. Rifkind spoke a day after a Taormina, Italy, meeting of the EU's "Reflection Group," set up to prepare the agenda for the 1996 conference at which steps toward unity will be considered and voted on.
'Launching a rocket into space'
Santer is a strong advocate of a single currency. So too are his Brussels commission officials, who appear optimistic about chances of the EU rallying to one currency. On May 31, in a "green paper," or consultative document, the commission compared introducing a single currency to "launching a rocket into space." Once the boosters have been ignited, the paper said: "There will be no turning back."
That's what worries Euroskeptics.
Tebbit and other critics say a single currency wouldn't be possible without a central European bank. Thus, the Bank of England would lose control of the pound sterling, and currency policy would be decided outside Britain.
Euroskeptics also pour scorn on the "Ecu," or European Currency Unit, Santer and his backers want adopted. It consists of the average of several EU currencies. Tebbit says dryly: "Myself, I would find it hard to warm to an Ecu - I rather like the pound."
But Santer intends to work hard to woo the EU's 370 million citizens on the Ecu. After the green paper is presented at an EU summit in Cannes, France, this month, the Brussels commission plans a publicity campaign in all member countries.
Persuasion looks like it will be necessary. In June 1994, a survey distributed throughout the EU showed that only 51 percent of those questioned believe a single currency would be in use by 2000.
When a single currency is mentioned in Britain, emotions run high among people who are usually cool and phlegmatic. Lord Rees-Mogg, a former London Times editor, takes issue with Santer and other Brussels officials for "trying to launch a Euro-currency without accepting the need for a proper debate in each country." Such a debate, Lord Rees-Mogg says, is "vital."
What to call the currency
Even supporters of a single currency doubt whether the word Ecu will win the hearts and minds of Europeans. Some Germans favor calling the money the "Franken," and French bankers have insisted on the "Franc."
Emma Bonino, the Italian-born European commissioner who will lead the campaign to popularize a single currency, insists it be dubbed the Ecu, because "the word is neutral and is not linked to any particular country."
Santer argues that a single currency would make sense for Europeans. All EU trade could be conducted in it, removing the need for complex currency conversions. For travelers, a single currency would make it unnecessary to switch from one money to another, paying banks and financial middlemen for each transaction, he says.
The Brussels green paper maintains that a single currency would increase international monetary stability. It states: "With money moving freely between interdependent economies, an autonomous monetary policy is no longer a credible policy option."
The EU membership must make a series of decisions in order for a single currency to get under way. Which countries qualify for joining in must be decided, and they must meet "convergence criteria" on levels of inflation, debt, and exchange stability. Circulation of Euro-notes and coins would follow three years later.
If Major holds out against such a timetable, other EU nations may opt to go ahead without Britain. But they would have to reckon with the fact that Britain is a major EU trading country whose capital holds Europe's strongest financial center.