Magazine article The Spectator

Euro-Train Subject to Delay

Magazine article The Spectator

Euro-Train Subject to Delay

Article excerpt


THE BANKER enthuses. Europe, he says, is heading for monetary union like an express train. Then a thought strikes him: `Of course, when an express train comes off the rails .

Suddenly, the train is lurching. Only last week Lord Jenkins was urging us to take our seats in the dining-car. We should have been just in time for the signalmen's errors in France and the rows on the footplate in Germany. It has all happened in front of the world's leading bankers, here for their International Monetary Conference. They had been looking forward to a congenial few days in the Swiss Alps. Now they have to ask where this train is heading and whether they want to be on it.

The row on the footplate was set off by Helmut Kohl's finance minister who, as finance ministers do, found himself short of money - so short that, strictly speaking, Germany might not qualify for the single currency. His eye fell on the gold in the Bundesbank, Germany's independent central bank. Why not revalue the gold, so he thought, show a profit, and impress the strict examiners? The bank exploded. Hands off our gold, it cried. God save the mark.

The Bundesbank's independence is unique, and I once heard Eddie George explain it, long before he took up governing and tried independence for himself. It was founded, he said, not so much on the words of a statute as on the Germans' bitter memories of inflation. So they care about the mark, and about the bank as the currency's guardian - but, he added, if anything came up that they cared more about, the bank would lose.

Then reunification came up. The West German mark was merged with the East German soap coupon, the Bundesbank warned of the dangers, Mr Kohl walked all over it and forced its governor's resignation. Then its warnings were borne out and in its mulish way it has been saving up its kick. Last week it chose its moment.

It chose well, for already we can see the euro looking less like a mark and more like a soap coupon. That is down to the French signalmen's errors. In his Elysian box, Jacques Chirac had hoped that with some deft timing and switching he could give this TGV a clear run through to its appointed terminus. His luck was out. As so often happens in France the cheminots have blocked the tracks and burned the sleepers.

It is not, proclaims Lionel Jospin, their leader, that we don't want this train to get through. Goodness, no. It is only that we want the management to meet our just demands. Come to think of it, we are the management now, so let's have no more privatisation, and plenty of jobs for the lads. Where are the jobs to come from? From the state, of course.

Looking on, it is hard not to feel that the previous management had it coming to them. All those years of pretending that a franc was as good as a mark were bound to take their toll. They have left France with festering unemployment, but that is Europe's problem too, and, as Mr George has pointed out, a single currency can do nothing for it except, here and there, to make it worse.

M. Jospin's promise to borrow and spend and employ and elect had its own populist appeal, even if Tony Blair and Bill Clinton before him were at pains to disavow it. Populist appeal does not get you into exclusive monetary clubs, but M. Jospin does not want the Euro Club to be exclusive. …

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