Contrasting pictures of life in euroland

Date: 02/07/1998

Geoff Meade takes a light-hearted look at life in the European Union EUROPE's single currency is the greatest thing since sliced bread.

Cue soft violin music and images of happy people frolicking in rolling hills of green pasture, because the euro, when it arrives next year, will bring with it a guarantee of a stable economic future, with lower prices in the shops and an end to those irritating amounts of cash people in kiosks withhold every time you change a pound for a franc or a deutschemark for a guilder.

Europe's single currency is also a disaster, of course. Cue clashing cymbals and big bass drums and dark skies and lightening, because the euro will pull widely differing national economies apart and bring about the collapse of the trading system. We will all suffer financially because of this political attempt to create an economic wonderland in Europe.

Both these things are true because clever economic experts say they are.

The problem is that different clever economic experts say these things at different times, leaving the rest of us with no clue as to what the future holds.

Every day since 11 European countries were hand-picked to embark on the single currency adventure together, I have heard someone somewhere saying something about the project which flatly contradicts what someone else had said the previous day.

In lay circles, this is perfectly acceptable. We all have completely differing views on a whole range of subjects about which we know nothing at all. Something that to me may be a shocking scandal which really shouldn't be allowed is the best thing that could possibly happen as far as you are concerned.

And because we are not experts and don't know what we are talking about, we can cling to our beliefs without fear of contradiction. We don't fear contradiction because it goes with the territory.

But experts are another thing altogether. With experts you expect a certain consistency and commonality of view. If one expert tells me my car is about to grind to a halt, I fully expect another one to agree, more or less. They will differ merely on the crucial matter of how much the repair will cost.

And usually, when a patient seeks a second medical opinion, it tends to confirm the fundamentals of the original diagnosis. When it doesn't, we are amazed and shake our heads in disbelief.

Yet here we, bombarded on all sides with every possible opinion on the single currency from so-called experts, and nobody bats an eyelid. We should be asking: “How can so many people in the same field have so many different views on the same thing at the same time?”.

Only this morning there was an economics expert on the radio announcing that businesses in Britain were starting a campaign to stop the UK joining the single currency. It would bring nothing but trouble, he said. The euro was rubbish. The euro was yuck. The United Kingdom didn't want it. Businesses throughout Britain were totally against it.

The interviewer, adopting his allotted role as devil's advocate, quickly pointed out that lots of businesses in Britain in fact welcomed the single currency with open arms. There was a long pause and then the expert replied: “Yes, but lots don't.”

And that was the punch-line in an intellectual debate on my economic future.

There the matter rests. The single currency is great, yes it is, no it isn't, 'tis, 'tisn't, 'tis 'tis 'tis and no returns! 'Tisn't! And so on. The bottom line is that we will know when we know and not before, and then we will all claim the result was obvious if you stopped to think about it.

Meanwhile, because we live in Brussels and therefore know everything about all things euro and Euro, people canvass our views. And, on the question of the single currency's fortunes, it is cowardly to say that you simply don't know.

So I take a neutral stand. This morning I told someone it was clearly something about which we had to be very cautious. Much will depend, I said, on the commitment of the single currency member states to sustain economic convergence and keep up the battle against inflation whilst keeping deficit and debt within carefully-decreed limits. Failure to do so could tear the single currency apart, with all the damaging political spin-off that could mean for the EU euro-core countries.

This afternoon I told someone the single currency will be the cement that holds the EU bricks together. It cannot, by definition, fail because a single currency is just that: the only currency the 11 member states have got and therefore something they will cherish and nurture. They will all be determined as never before to get a grip on the economy - the 11 musketeers, all for one currency and one for all! Therefore, it cannot possibly fail.

Besides, I said, it is the natural complement to the single market. How could you possibly have one without the other?

Tomorrow I might decide that the single currency is premature and that it should be postponed for at least ten years while we consider the long-term implications of such a move.

I might point out that the single market is gaining strength and credibility by the day and is clearly self-sufficient. The single currency might even undermine that, I could add.

And then again, perhaps I couldn't. The fact is that never has such a major undertaking as the single currency been undertaken without anyone apparently having the faintest idea of what its future might be. Except, perhaps, the creation of the European Union itself.

Well there you are then, you will say. No one had a clue what would become of the European Union, but it worked out okay, give or take a few teething troubles. And that was on the basis of little more than a hunch and a few post-war prayers.

So let us not worry too much about the single currency. We must draw comfort from the fact that what will be will be - and that is about the only demonstrably accurate thing I have yet to hear from anyone on the prospects for the euro.