Marginalised Britain will one day count the cost of the lost Euro opportunity

First things first, amongst all those many others may I wish Prince Philip a speedy recovery. He has been a tower of strength over the last 60 years and has made a contribution beyond compare to the Queen herself and the monarchy as an institution.

Nevertheless, the Diamond Jubilee celebrations can only distance the rest of the world to a limited extent. While we have been enjoying our good fortune, the Eurozone leaders have been slowly forming a reaction to the sovereign debt crisis, specifically the banking crisis in Spain.

According to the Guardian today, the recently elected French socialist government represented in this instance by Finance Minister Pierre Moscovici and the European Commission led by President Jose Manuel Barroso have just given strong backing for a new Eurozone “banking union”. Crucially, the plan could see vast national debt and banking liabilities pooled and then backed by the financial strength of Germany in return for Eurozone governments surrendering sovereignty over their budgets and fiscal policies to a central Eurozone authority.

This is heady stuff indeed, and good news for the European single currency. Finding a way through the crisis in the Eurozone countries is also good news for the UK. Probably the only thing on which I agree with David Cameron is that it is in Britain’s interests to have a stable Euro.

However, it is also very bad news for Britain. Yet again we are outside major European developments. This may not be harmful in the short-term, but will be damaging for the UK in the longer term. 

The European Council president, the President of the European Commission, the President of the European Central Bank and the head of the Eurogroup of 17 finance ministers have apparently been charged with drafting the proposals for a deeper Eurozone fiscal union, to be presented to an EU summit at the end of the month.

The European Commission and France are piling pressure on Germany to line up behind the proposal. Angela Merkel would need to take it to the German parliament for agreement.

The international financier George Soros is on record as saying: “The likelihood is that the euro will survive because a breakup would be devastating not only for the periphery but also forGermany.Germanyis likely to do what is necessary to preserve the Euro…”

Soros continued with these prophetic words, “”That would result in a Eurozone dominated by Germany in which the divergence between the creditor and debtor countries would continue to widen and the periphery would turn into permanently depressed areas in need of constant transfer of payments.”

Everything appears to be coming together -France and the European Commission working together, plus tentative but seemingly real acceptance of their proposals by the European Council, the European Central Bank and the Eurozone countries. Although it’s by no means all set to go, it does look as if the 17 Eurozone countries are coming closer together and accepting the need for a central Eurozone authority look at budgets and fiscal policies.

Britain as ever is not part of what promises to be the most important European project since the formation of the Common Market. Unfortunately 50 years or so later, we still don’t get it. Europe is where the future lies. If Britain has any hope of being more than a bit player outside our own shores, we have to be a leader in the European Union. Today that means being up there with France and Germany in the Euro. Very unfortunately we did not join, and this blog post explains just how serious a missed opportunity this will turn out to be.

To add salt to the wounds, if Britain had joined the Euro, there is little doubt we would have been at the top table with France and Germany. Yes, we would have suffered from the current crisis in the Eurozone countries, but thanks to dogmatic Tory Chancellor George Osborne and Prime Minister Cameron we are suffering a double dip recession anyway, even outside the single currency. The Euro was always a political as well as an economic project and the UK has comprehensively failed to grasp the political opportunity.

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3 Comments

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3 responses to “Marginalised Britain will one day count the cost of the lost Euro opportunity

  1. Fiscal integration here is a classic example of getting into a hole and then digging.
    To my mind the Euro is fundamentally unsound as conceived and austerity merely exacerbates the problems it creates.
    Not least tying in governments into arbitrary budgeting limits.
    In her obsession with tighter integration to avoid wars, Merkel might be termed ‘tough on wars and soft on the causes of wars’.

  2. Pingback: An unpopular view: The UK missed out by not joining the euro | Nosemonkey's EUtopia

  3. Rare to see so much sense in the British debate on Europe.

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