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It's Time to Tell the Truth About Joining the Euro
By Roy Denman, International Herald Tribune September 19, 2000
The writer, a former representative of the European Commission in Washington

Something unusual is happening in Europe. The leaders of three countries are either telling the same lie or are preparing to do so.

Which are the countries, what lie are their leaders telling, why are they telling it and what will be the consequences? The three countries are those member states of the European Union that are considering joining the European single currency, the euro.

Denmark will vote Sept. 28 on whether to join. The British government has said it will hold a referendum during the next parliamentary term if it finds that the euro has passed certain economic tests. Sweden has said it will hold a referendum but is waiting on the Danes.

What Denmark and Britain are saying, and doubtless Sweden will say, is that joining the euro is essentially an economic judgment. This is hogwash /struntprat/.

Joining a single currency is a major step toward European federation, which has always been the aim of the European adventure. As long ago as 1958 Walter Hallstein, the first president of the European Commission, defined the future development of Europe as ''customs union, economic union, political union.''

It has always been clear that freeing trade in Europe would have political consequences. A League of Nations study in the early 1930s pointed out that for a customs union to endure there would need to be stable exchange rates within the union. This in turn implied that ''diverse economic policies concerned with maintaining economic activity cannot be pursued'' and that therefore ''some political mechanism is required. The greater the interference of the state in economic life, the greater must be the political integration within a customs union.''

The leaders of these three countries know this. Prime Minister Tony Blair of Britain admitted in a private memo, leaked some months back, that the case for adopting the euro was overwhelmingly political. So why are they trying to deceive their electors?

The reason is that they fear that if they were honest about the political consequences of joining the euro, the voters would refuse to go along. Then they would be on the sidelines, ignored by the ''Euro 12,'' increasingly a political as well as an economic bloc, that includes 11 countries soon to be joined by Greece, and is expanding to the East. So what they are trying to do is to get their countries in on the sly, hoping that they will swallow in due course what has not been revealed to them in advance.

What will be the results? If the Danes say No on Sept. 28, Denmark will be out of an integrating Europe for many years. So will Sweden. And a probably decisive encouragement will be given to the anti-euro majority in Britain.

But what if the Danes say Yes? If they do, it will probably be a tiny majority. This is not a valid basis for a fundamental change in a country's constitutional position. Will the Euro 12 be happy to have, in the next stage of the construction of Europe, a halfhearted partner who, as soon as closer political union is mentioned, makes for the door?

And what about the British? For Mr. Blair to stage a referendum in the next Parliament would mean a showdown with his finance minister and the violent opposition of the press, knowing that if he loses he is finished. His record suggests that he will not take the risk. Britain will continue to dither and drift for the next five years.

So the strategy of deceiving the public in the three northern euroskeptic countries does not seem to be working. If their leaders are not prepared to tell their people the truth, then it is up to the Euro 12 to do so. Little can be expected from the intergovernmental conference concluding in Nice in December because the northern fringe will not agree to the widespread use of majority voting that would be required for a Europe of up to 28 member states to be workable.

So let the Euro 12 propose another conference on the shape of Europe next year, participation to be limited to member states who are not only committed to the euro, but who also accept as an ultimate aim a European federation. A great work of construction cannot be completed if a minority want not a cathedral but a tent.

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