Brian
Denny looks at recent developments and the case against
the euro
European Commission
president Romano Prodi helpfully clarified the purpose
of the single currency
recently by pointing out that it was a “purely political
process.”
Even European
Central Bank president Wim Duisenburg
predicted that the euro would act as a catalyst for political
integration in areas outside economics, particularly military
and foreign policy.
“The euro
is much more than a currency. It’s a symbol of European
integration in every sense of the word,” he says.
For the federalists,
the euro and the European army are two sides of the same coin
as Mr Prodi points out: “the two pillars of the nation
state are the sword and the currency, and we have changed that.”
German Finance
Minister Hans Eichel, speaking officially on behalf of Berlin,
added a common tax policy to the list following the launch of
the single currency.
“The currency
union will fall apart if we donšt follow through with the consequences
of such a union. I am convinced we will need a common tax system.”
For these and
other reasons the euro can be seen as a political tool, designed
to dismantle national democracy and sovereignty not only in
the eurozone but in large parts of the Balkans where it has
also become the official currency.
Applicant EU
nations are also being forced to abolish their national currencies
as a condition for joining, which is particularly absurd when
the governments of Denmark, Sweden and Britain do not propose
giving up their own national currencies themselves.
The European
Anti-Maastricht Alliance (TEAM), made up of over 50 eurocritical
groups from over 30 countries have produced an excellent statement
highlighting the dangers involved in the euro experiment.
It points out
that the central element of such a scheme is to liquidate the
democratic heritage of the American and French Revolutions:
the right of nations and peoples to self-determination.
The various
EU treaties aim to put national economies and the welfare of
citizens under the rule of bankers - free from all democratic
control – at the European Central Bank in Frankfurt and
its agents, the now subordinate central banks of the member
states.
TEAM points
out that a national currency is essential for every democratic
independent state because it enables its government to control
its rate of interest and its exchange rate in a manner that
serves the interests of its people.
“The rate
of interest is the domestic price of a currency, governing the
cost of credit, borrowing, investment and the amount of money
in an economy. It is a key policy instrument for advancing the
people’s welfare.
“The exchange
rate is the price of a currency for citizens of other countries.
It governs the terms on which a country exchanges goods and
services with its trading partners.
“By altering
its currency exchange rate a country can affect the competitiveness
of its trade with others.
“If a
country has an unsuitable exchange rate for a long period, it
can suffer a permanent competitive disadvantage, resulting in
low economic growth and unemployment,” it says.
Without the
safety valve of either the interest rate or exchange rate, national
economies are more vulnerable to economic shocks that may
affect them more than others.
Needless to
say, the interest rate in euroland already does not suit most
member states, which have vastly different needs.
There is no
better or more timely example of these dangers than in Argentina
which collapsed into rioting last month with dozens killed,
debt default and a state of siege.
Buenos Aires
effectively did in 1991 what 12 EU states have done this month
and gave up an independent currency by locking the peso one-to-one
with the US dollar.
The Argentine
economy, now unable to devalue when necessary, began to horribly
contort itself to fit the wrong exchange rate, leading to four
years of agonising recession and growing poverty.
This fate awaits
all those in the eurozone trying to fit into the “one size
doesn't fit all” monetary policy - invariably based around
the German economy.
Tension between
countries that require different economic policy responses,
but have the same policy imposed on them by the ECB, is likely
to grow over time and eventually shatter the euro-zone system.
Mr Prodi let
the cat out of the bag a couple of weeks ago by admitting that
the euro would, indeed, create a crisis that would allow the
EU to grab a whole set of economic powers that it has so far
been politically unacceptable to advocate.
This use of
crises by Brussels for it's own eurofederalist ends was clearly
on display following the September 11 attacks on the US when
it made massive strides in grabbing legal powers from member
states otherwise considered taboo.
As Mr Prodi
declared at the time: “The current crisis could be seen
as favouring integration by stressing the need for action at
a higher level than a national one.”
Brussels openly
uses such fears and concerns to promote it's own integrationist
agenda and warns that those outside the eurozone will suffer.
However, the
evidence shows that those trapped inside suffer high unemployment
and stubbornly low growth while those countries outside, such
as Norway and Switzerland, are among the richest and most stable
in Europe.
TEAM also makes
some interesting points questioning the starry-eyed idea that
the euro will somehow abolish conflict in Europe and beyond.
It says that
in 1999, the year the euro was established, there were 25 wars
waging in the world, 24 of them in countries with a common currency.
Between 1989
and 1999 there were 108 armed conflicts in the world, 101 of
them within states that had a common currency.
And, ultimately,
why would an EU superpower want to build an EU army unless it
wanted to fight external EU wars?
The driving
force for this empire-building project is clearly corporate
power.
The only freedoms
the various EU treaties enshrine is the rights of capital to
be free from the constraints of democratic nation states within
the vastly differing areas of Europe.
There is no
realistic likelihood of the richer EU countries being willing
to pay vastly greater sums to Brussels to compensate the poorer
countries for surrendering the ability to use exchange rate
and interest rate policy to balance their national payments.
Therefore the
only way they can do so is by accepting lower wages and interest
rates compared to their competitors, or, if they are not prepared
to do that, remaining unemployed at home or emigrating abroad.
In many different
ways, the introduction of the euro is a direct assault on democracy
and national independence.
Therefore,
the task of democrats is to organise to remain outside the single
currency or to reestablish their national currencies, however
long that may take.
Brian Denny is foreign editor of the Morning
Star, Britain’s independent socialist daily newspaper,
where this article first appeared. TEAM’s website is at
http://www.ljudmila.org/team/
