Filed under: Europe
In the new e4u collection, there are some admirable pieces, which deserve to be read for their making their arguments soundly and honestly (this one is hilariously overwrought, mind). One of these is Stefan Collignon’s essay ‘Sovereignty, Democracy and the Euro’, which is especially admirable because it doesn’t dismiss the (frankly obvious) notion that having a single currency has implications for political power. Collignon says:
“The introduction of the Euro as a common currency to all citizens has significantly increased the range of European public goods… They are concerned by policy decisions that affect these economic variables.
“As owners of public goods, citizens in democracies appoint governments as their agents to administer these goods in accordance with their preferences. Because they are affected by the consequences of policy decisions, they must have the right to choose between different policies and to revoke their agent if they so wish. But making collective decisions requires also structures and institutions that allow them to deliberate together on what policy decisions serve their interests best… and this requires politicizing policy-making at the European level.”
As a purely descriptive matter, this seems right. Much of the economic pains seen in places like Spain is a natural consequence of what is essentially too much policy autonomy at the national level, given the constraint of a shared currency (Krugman makes the point about the lack of Euro-level central government). Where I disagree is as to the desirability of such a development; I don’t want Britain to become part of a European polity – for that reason, I don’t want us to ever join the Euro. But I’m also highly sceptical as to the project of evolving such a polity. In the concluding paragraph, Collignon writes:
“Joining the Euro means joining a monetary economy where the nature of policy externalities will significantly increase. It will create new bonds of trust among citizens. Sharing the same currency, operating in a large single market is creating new interests shared by ordinary citizens… With the substantial increase of private contractual relations across borders in Europe, national identities become less important.”
But surely we have learned that such simple, deterministic explanations of social change are best treated with great caution? The state didn’t wither away, and secularisation stalled – if the principle of equality and the consequences of the empirical method didn’t lead to their supposed destinations, then forgive me if I question that changing one currency might have such a profound impact as to transcend bonds built on 1,000-year-old national mythologies, with all their embedding in language, social practice and political institutions?
Euro members might of necessity consent to the creation of common public institutions, but the act of coming together to divvy up the loot does not a tribe make. Giving even a single precursor of the shared interest of a fiat currency defining the identity of a new political community would be a start. (The previously cited Krugman post also identifies the relatively poor labour market integration as the other key factor in the Euro area’s painful asymmetric shocks; this same fact of our living separately would surely also inhibit the forging a European political union.)
That said, well done for the honesty. If pro-Europeanism is to have any future, it is precisely this kind of candid positive message which is needed. I wouldn’t like to be tasked with selling it, though.
Nosemonkey points to the launch of this year’s new pro-Euro campaign. Apparently driven by the notion that Britain’s economic troubles could be solved (or, anyway, ameliorated) by our rapid entry to the Euro, they’ve got a 256-page collection of essays against the eeevil Eurosceptics.
As NM says, the list of contributors includes some good names – Michael Artis, Willem Buiter, Peter Sutherland, to pick out a few… But from my look over them, they’re all the same old names we’d have seen back in the period when it all seemed a live possibility, and probably less convincing because they seemed to be the true committed Euro advocates from some time back, rather than those arguing strictly on the empirical merits (this is no disrespect; we all have our priors, and mine go the opposite way – my point is that you have to have some on your side who obviously might’ve split the other way if you’re to win the argument… I don’t see any).
And anyway, no campaign will be won by the economists. The public figures are what matters here, and the same problem applies – that it’s the same old rump. We’ve got John Stevens and Brendan Donnelly (former Tory MEPs who formed the Pro-European Conservative Party – you may have missed this), Dick Taverne (Labour-turned-SDP-turned-Lib Dem), Chris Haskins (Labour-supporting former industrialist), and Will Hutton. Only Will Hutton, who manages to be both media fave and deep macroeconomic thinker* even before breakfast, is a leading public figure; the rest are all rather second- or third-tier has-beens, all with cards well marked for their head-banging pro-Europeanism (Stevens, Donnelly and Taverne effectively left mainstream political careers because of their commitment).
But the really worrying sign if you believe that Britain should join the Euro is the sheer incompetence of its presentation. I obviously think that joining the Euro would possibly be the worst mistake since the passage of the Third Reform Act or the execution of Laud**, (more…)
