The Euro: A Year of Problems

By Hylarides, Peter | Contemporary Review, October 2002 | Go to article overview
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The Euro: A Year of Problems


Hylarides, Peter, Contemporary Review


THE 'ever closer union' seems to get closer and closer. On 1 January 2002, 300 million citizens said goodbye to their historic old currencies, replacing them with one, the euro. Romano Prodi, the European Commission President, predicted that the new currency would be a major step which would lead to greater convergence of economic rules. He also emphasized that the common currency is a pure political project; and it is, of course a political project.

To be honest, it was clear from the beginning that cooperation in Europe was going to be more than just creating a free trade area. After the initial steps were set that put the European Coal and Steel Community (ECSC) and Euratom into action, the Treaty of Rome which established the European Economic Community (EEC) in 1957 laid the foundations 'of an ever closer union among the peoples of Europe'. This emphasized the resolve of the Six 'to ensure the economic and social progress of their countries by common action to eliminate the barriers which divide Europe'. Gradually the powers of individual states were to be further reduced by 'harmonisation'. In the last few years the pronouncements of European leaders certainly went in that direction. Dr Johannes Rau, the President of the Federal Republic of Germany, said in April 2001 that the EU is on the road to a federation of nation-states. 'If we transform the EU into a federation of nation-states, we will enhance the democratic legitimacy ... I believe that th e Parliament and the Council of Ministers should be developed into a genuine bicameral parliament'. A year before, the German foreign minister, Joschka Fischer, had even concluded that a United States of Europe was not far off: 'We already have a federation. The ... 12 member states adopting the euro have already given up part of their sovereignty, monetary sovereignty, and formed a monetary union, and that is the first step toward a federation'. Those who idealise this political concept of Europe indicate that we have lived without military conflicts for 46 years, mainly due to European integration. They conveniently forget that the Cold War, and especially NATO, played an essential part in maintaining peace.

Currently a constitutional convention on the future of Europe is being held with subjects such as taxation, foreign policy and direct election of a European president on the agenda. Federalists form the majority of the delegates who will eventually decide on this future European constitution. The European summit in Laeken, Belgium, approved the structure for the convention and brings the possibility of a European superstate one step closer to reality. Was it not Margaret Thatcher, who warned us in her famous (or infamous if you like) Bruges speech in 1988 not to become an inward looking dirigiste Europe? Now Jack Straw, the current British Foreign Secretary, has endorsed the idea of a written constitution for the EU.

The general public does not seem to mind. In all twelve countries who have adopted the euro, people were celebrating the coming of the new dawn. Europe's 'national' anthem, Beethoven's Symphony No. 9 was played with the crowd joining in the final chorus from Schiller's 'Ode to Joy'. The transition went smoothly, apart from a few minor glitches. But will all men indeed become brothers?

It was only one and a half years ago, though, when the Danish people said no to the euro. With a decisive 53.1 per cent vote the Danes indirectly also rejected the Franco-German calls for a federal European government and parliament, as was suggested earlier by Germany's foreign minister Joschka Fischer. The reaction from Brussels was stoical: Romano Prodi announced that the Danish rejection would have no influence on further political and economic integration, while European Central Bank President Wim Duisenberg emphasized that as far as the euro was concerned it was 'business as usual'.

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