Britain and the euro. Not yet

Date: 01/03/03

That shocking decision: Britain will wait and see

THIS week the government announced its decision not to decide just yet about taking Britain into the euro. For those who found the newspapers' exhaustive Indecision Day multi-page supplements a bit taxing, to say nothing of the Treasury's 2,000 pages of analysis of selected aspects of the issue (with more to follow), the main thing to understand is quite simple: the policy is right, politically and in economic terms as well.

The government has promised a referendum on the issue, and at the moment there is no prospect that Britain will vote to abolish sterling. That takes care of the politics. Turning to economics, Britain is structurally and cyclically out of step with the euro-zone: joining now would be bad for Britain and, please note, bad for the existing members, which are in enough trouble already. Oh, the euro-zone's fiscal and monetary policies are wrong; best wait for that to be sorted out too.

Perhaps it would have made more sense therefore to rule the idea out for years, or for ever? Not at all. Economics and politics could easily move in favour of British membership. Why close the door in any case? No, the government's tried-and-tested policy of wait and see is fine. And please stop saying that this is the same Tory policy they used to mock. Cheap shots like that are unhelpful, and Europe is a serious subject.

Is it, though? One begins to wonder. Many of the leading participants in the Britain-in-Europe debate do seem to be joking. Take the euro-enthusiasts who argue that Britain has already wasted precious years outside the system. They say it with a straight face, but they cannot be serious, can they? The course of euro interest rates thus far is known; their path with Britain in the system would have been similar, and can be compared with British rates. You don't need 2,000 pages of analysis to understand that the British economy would have been far more volatile with the euro than it was with the pound. Perhaps those sooner-the-better types are really Eurosceptic plants, trying to discredit the cause by making it out to be impervious to evidence and common sense. Sneaky.

The government, for certain, is a big kidder. Consider the effort devoted to convincing people that Tony Blair (keen European) and Gordon Brown (decidedly less keen) are in total agreement - equally avid pro-Europeans, equally eager to rise to the euro challenge when the conditions are right. Nobody believes it! What a muddle! They're a riot, those two.

Some see their euro disagreement as a quarrel over the terms of Gordon Brown's accession to 10 Downing Street. When this came up in their amusingly strained joint press conference this week - rictus smile meets dissertation tending to infinity - Mr Blair said he wanted to talk about “substance not soap opera”. Another good one. When it comes to the euro, the last thing the prime minister likes to talk about is substance.

Everyone's a comedian

In this he is not alone. Eurosceptics revel in their nightmares about European tyranny and the end of 1,000 years of history. Europhiles, averting their eyes from the mess the existing euro-zone members are making of their new monetary regime, perform the classic routine: “Britain is winning the argument in Europe.” This has them helpless over at the constitutional convention. The old ones are the best, and Mr Blair has promised that he will take “winning the argument” on tour again for his campaign to change Britain's mind on the euro.

Have you noticed, by the way, that this joke has deeper layers? Relish the contradiction. Clearly, Europhiles will be reconciled to the place in Europe they want Britain to seek only when they expect Britain to lose the argument a lot and do not care - or when there is no distinctively “British” argument to advance. This is what being one country in an ever closer union of 25 nations (and counting) entails. What could be more Anglo-chauvinist than a prime minister who constantly frames his vision of euro membership and European integration in terms of Britain's “winning the argument”?

Come to think of it, it is more sad than funny.

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