Europe Isn't Working by Larry Elliott & Dan Atkinson

Author:Larry Elliott & Dan Atkinson [Elliott, Larry]
Language: eng
Format: azw3
ISBN: 9780300221923
Publisher: Yale University Press
Published: 2016-05-23T16:00:00+00:00

In the early 2000s, the olive groves of Tuscany were alive with members of the UK intelligentsia bemoaning the failure of the Blair government to be more positive about Europe. Being positive about Europe was testing at a time when the Greek economy had shrunk by more than 25 per cent in five years and youth unemployment in Spain was above 50 per cent. The sales pitch for the euro when it was a live issue for the UK between 1997 and 2003 was: ‘Join the single currency and have higher living standards.’ It was not: ‘Join the single currency and find out what the Great Depression was like.’

Fortunately, Britain did not choose to try the full Grapes of Wrath experience, but it is easy to see how it could have ended up in the same situation as Ireland, Portugal or Greece. Mounting a defence of the euro has become more difficult for those who see themselves as progressives and most have not bothered to try. Public opposition to joining the euro is now so strong that opinion pollsters have long ceased asking voters whether they want to adopt the single currency instead of the pound.

Blair’s own biographer, Anthony Seldon, believes events since 2003 have proved Brown right. As he noted: ‘The euro was a clear Brown win, and one on which he was unequivocally on the right side. Many in Number 10 as well as the FCO thought that Britain would lose influence in Europe if it did not join the single currency and that joining the euro was the litmus test of whether we would be considered to be good Europeans.’9 But Britain has not missed out on a European golden age. All three chancellors since the decision was taken not to join have been thankful that the UK has enjoyed the freedom to manage its own affairs. There has been no more talk of the UK standing on the dockside watching as the ship headed out to sea since it became clear that the boat in question was the Titanic.

Even at the height of euro enthusiasm polls showed no more than one in three voters planning to vote Yes in a referendum on giving up the pound. There is little evidence that the existing members of the Eurozone would have been happy to see the UK government drive down the level of the pound before entry, since that would have eroded their trade surplus in manufactured goods and handed a competitive advantage to Britain’s services sector, which was already running a hefty surplus of exports over imports. There is even less evidence that the Germans would have rubber-stamped a UK proposal to turn the ECB into a clone of the Fed. The idea that Germany would have insisted on tougher banking regulations that would have softened the impact of the 2007–08 financial crisis is undercut by the fact that German banks were among the least conservative in the years before the meltdown. Other than that, the Hutton thesis is absolutely watertight.

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