MONDAY VIEW: The euro crisis drags a noble idea to disaster
Having followed the saga of Britain’s relations with the rest of the European Union since the 1960s, I have a nagging suspicion that we are now witnessing a slow-motion car crash, with potentially horrific implications.
The notorious epigram, much quoted in my youth but seldom heard these days, states that ‘the road to Hell is paved with good intentions’.
Not to put too fine a point upon it, for all the sniping that goes on in this country about ‘Brussels’ – often from well-to-do Brits who experience the best of both worlds with comfortable residences in Britain and France (or Spain or Italy) – the European Union was a brilliant idea, but the single currency, in the form it assumed, was not.
Close bond: The whole point of what became the EU was to avoid another war
Older readers will know, and younger
readers need to know if they don’t already, that the whole point of what
became the European Union was to bind European nations sufficiently
closely together that another war in Europe would be out of the
question.
The particular emphasis was on France
and Germany; the latter having invaded the former three times between
1870 and 1940 with consequences of which we are continually reminded.
Two recent reminders have been the
depiction of the First World War trenches in the television screening of
Birdsong and the frequency with which we have been told that Germany’s
tough approach to ‘fiscal discipline’ in the eurozone is still coloured
by folk memories of the ‘wheelbarrow’ inflation that followed the First
World War.
It was not, by the way, about the
price of wheelbarrows: the term reflected the way that the debauchment
of the currency meant that some citizens resorted to the use of
wheelbarrows to carry the amount of banknotes required to buy a loaf of
bread.
Since the Benelux countries – Belgium,
Netherlands and Luxembourg – were not so much on the warpath at the
outbreak of the First and Second World Wars as in the warpath, they too
were naturals to become members of the original six who signed up to the
Treaties of Rome.
Italy, which had suffered under Mussolini, was of course the host country to the Treaties in 1957.
The aim of the founding fathers, such
as Jean Monnet – whom I once met – was to use economic means to bind
France and Germany closer together politically.
There were lots of upsets on the way,
but it worked, and I know of nobody who thought, before the advent of
the eurozone plan, that the European Union would ever break up.
Although the author of the famous
slogan about the supposed need for ‘ever closer union’, even Monnet,
towards the end of his life, had second thoughts about that ultimate
aim, Chancellor Kohl of Germany and President Mitterand of France went
ahead with the formation of the single currency.
Their motivation was fear that, after
the fall of the Berlin Wall in 1989 and reunification, a Greater Germany
might return to its bad old ways.
They wanted a European Germany, not a German Europe.
Alas, alongside this worthy aim, the
economic policy establishment in Germany saw a chance to prevent
countries such as Italy from devaluing their currencies, by locking them
in to the eurozone.
Italy and other Club Med countries
such as Spain, Greece and Portugal joined for political reasons, and
fell into an economic trap, with the disastrous consequences we see
today.
For all the short term propping up of
the system, it is difficult to see how the eurozone can survive in its
present form, not least because Germany insists on imposing
self-defeating austerity policies on others.
Europe is in for a very rough time, economically and socially.
Although out of the eurozone, Britain is not immune.
William Keegan is a leading economics correspondent