GLOBAL ECONOMIC VIEWPOINT
EURO MEANS A SURRENDER OF DEMOCRACY
By David Owen (Lord Owen)
Lord Owen is a former British foreign secretary and European Union peace envoy in former Yugoslavia. He is currently chairman of New Europe, working with Business for Sterling in the UK "no'' campaign. Further information from www.no-euro.com.
LONDON -- Outside the United Kingdom it is not often realized how widely based is the opposition to Britain joining the euro. In the most recent and typical poll 69 percent said "no,'' and of the 23 percent saying "yes'' more than a third believed, mistakenly, we could leave if it did not work out.
The UK "no'' campaign has the support of politicians from left, right and center and businessmen who campaigned to keep Britain in Europe in the 1975 referendum. The campaign is also supported by two former heads of the diplomatic service. The Economist, widely read internationally and with a long, proud record of support for the EU, in its most recent editorial says a "no'' vote in Denmark on Sept. 28 would offer a welcome jolt against the "one-size-must-fit-all integrationists.''
The significance of the euro is not just that it might lead to European control over national public spending and taxation but that it involves, from the beginning, a surrender of democratic control over interest rates and the level of the pound.
The single currency is already proving to be a powerful catalyst to the building of a single state of Europe. Leading European politicians and bankers do not believe that the euro will work in the long-term without a single economic government.
Already those countries within the euro have a single interest rate and a single exchange rate managed by the European Central Bank (ECB). The ECB cannot take into account simply the interests of one region but has to judge across the whole of the euro zone. Inevitably, the single euro interest rate can be right for some and wrong for others. Ireland today is struggling inside the euro with a totally inappropriate ECB-authorized interest rate. But all the usual safety valves governments have used in the past to manage their economies have been closed off.
The British government today, by contrast, even with an independent Bank of England, determines the target level of inflation for the bank and can influence the level of unemployment.
In Euroland people will find themselves, in areas of high unemployment exacerbated by the ECB's interest-rate policy, being asked to take it on the chin because they are part of "Europe.'' Yet because they don't identify themselves as being part of a European nation, resentment will boil up. They will see themselves as victims of a power beyond their control, and they may react by taking to the streets in a far more militant form than anything we have seen already.
Those of us like myself, who support Britain's place in the European Union, have always accepted that membership involved some diminution in our powers of self-government. But economic policy is of such central importance in a nation state that its surrender means so much more and could lead to so much more.
The cornerstone of any democratic state is control over its own foreign and security questions. Why now in 2000 are most EU countries and the European Ccommission pressing for more changes to the Maastricht Treaty so as to abolish a nation's veto and establish qualified majority voting in all common foreign and security policy circumstances? The answer must be that they are either blind to its implications, or they are ready to be part of a single state.
At the Nice Summit in December, the commission and the European Parliament will, unless the British, and hopefully the French, government insist on amendments to the Treaty of Amsterdam, be given a role for the first time in defense matters. This is not just new but has far-reaching implications if conceded at Nice. Slowly over time the commission and European Parliament will widen that locus, and Britain will lose its independence in defense policy, which we have always been able to maintain, even in NATO.
Javier Solana, the High Representative for a Common Foreign and Security Policy, has already started campaigning for an EU seat on the U.N. Security Council, threatening the seats now held by France and Britain.
It is vital that Britain retains its ability to veto EU foreign or defense policies, even if it is a minority of one, if it is to maximize its influence in the world and keep its valuable relationship with America, which we all now know we relied on so heavily in Kosovo in 1999.
Another strand of the drive toward political union is the proposed EU Charter of Fundamental Rights and Freedoms, which the European Parliament and some EU member states, such as Germany, want to form the basis for a European Constitution. It could be the crucial preparation for a single state of Europe, if the euro integrationists get their wish and the charter becomes legally binding. We could find every area of British national life becoming subject to judgments from the EU's Court of Justice.
The form of the nation state is not something sacred, stuck in time, never to change, but it is far and away the best currently available vehicle for something I deeply value: the ability to govern ourselves democratically. Also to feel that we are governing ourselves. The nation state is the entity we identify with and feel we belong to. It is the framework within which we give consent. We should not be forcing the pace of change on a deeply reluctant public -- not only in Britain, it has to be said, but throughout most of Europe.
The final constitutional destination of the EU is still unclear. Britain should, therefore, reserve its position on the euro. There is no objective hurry to join the euro. Britain is doing well economically outside the single-currency zone, and we have the luxury of being able to wait patiently to see how the politics, not just the economics, of Euroland develops.
France and Germany have insisted on a new intergovernmental conference in 2004 to negotiate a new constitution for the EU. Only after this vital event has taken place will it be possible to make a rounded assessment of the implications of the euro for the UK. Only then should any government even contemplate putting the choice to the British people in a referendum.
(c) 2000, El Pais/European Viewpoint. Distributed by Los Angeles Times Syndicate.
For immediate release (Distributed 9/22/00)