Europe is in a mess, and this time the Brits have nothing to do with it. It's a mess made in France and Germany, courtesy of Chirac and Kohl who thought they could take a shortcut to the single currency.
Chirac was defeated by the people; Kohl lost out to the Bundesbank. So now we have a rainbow coalition of the old left in Paris and a centre-right coalition in Bonn on its last legs.
New Labour cannot believe its luck. Tony Blair has only been in office for six weeks and the political map of Europe has turned upside down. Monetary union no longer looks inevitable. John Major's policy of wait and see suddenly sounds respectable.
An Emu-sceptical central banker reckons the British now have a once-in-a-decade diplomatic opportunity to stop the Kohl-Chirac juggernaut. He thinks there is a chance of organising a delay to the planned launch of the single currency on 1st January 1999. So what are the odds either way?
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let's start with the new French government. The socialists want no part of a monetary union which is designed by the Germans, built by the Germans and run by the Germans. They want the Italians and Spanish in. After all, smirks a French diplomat, Club Med is a French company.
Jacques Delors is worried. After the leftwing victory upset in the parliamentary elections, he contacted Jospin and set out his terms for joining the new government. He wanted to be foreign policy supremo for Europe. A one to two year stint in office to oversee the transition to Emu. Plus a suitable big job for his daughter Martine Aubry.
The trouble is he would have upstaged both Chirac and Jospin. Eventually, he was offered-and turned down-the job of justice minister and the new title of deputy prime minister. A fellow socialist sees it differently. Delors has always hesitated about big jobs. He failed to run for president in 1995 and thus helped Chirac. "Delors lets you tickle his balls, and then he runs away," says his old comrade.
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delors, kohl and Mitterrand. This was the troika which took us to Maastricht and Emu. The equestrian image fits the continental view of Europe: skilful French rider controls and directs powerful German horse. But what happens when the German steed looks like bolting?
Right now, Kohl can barely keep charge of his centre-right coalition. Theo Waigel, Europe's longest serving finance minister, miscalculated with his plan to revalue the Bundesbank gold and foreign exchange reserves. The idea was to use the extra book value to plug a hole in the public deficit, but the manoeuvre made even Italy's creative accounting look conservative.
Waigel panicked when he realised that Germany, with the highest number of people out of work since Hitler came to power in 1933, had little chance of meeting the Maastricht public deficit target of 3 per cent of GDP. This ought not to matter because 3 per cent is not a fixed target, but a benchmark. But Waigel has nailed himself to the cross of 3 per cent, with no room for manoeuvre. Why?
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enter edmund stoiber, the right-wing CSU prime minister of Bavaria and archrival to Waigel. Stoiber says that it would be better to delay Emu than to dilute the entry criteria. He fears a euro-lite, signalling the end of postwar Germany's philosophy of stability ?ber alles.
Waigel, a fellow Bavarian, claims Stoiber is whipping up Europhobia to strengthen his position in the CSU. He also suspects Stoiber leaked details of the breakdown of his marriage to the German press. He sees Stoiber in the same mould as J?rg Haider, the anti-EU populist in neighbouring Austria.
Whether Waigel or Stoiber wins the battle for public opinion in Bavaria will be a pointer to whether Germans come round to giving up the Deutschmark. The smart money is on a flexible reading of the treaty and Waigel being moved from finance to foreign minister in the autumn, assuming no early German election.
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but emu is still a close call, and the British may still have a role to play, especially as they are due to take over the rotating EU presidency in the first half of 1998 when the choice of Emu members is due to be made.
So far, New Labour has been storming around Europe like a bunch of educated football hooligans. Alastair Campbell appears disdainful of most European politicians and longs to talk about health policy. At the socialist congress in Malm?, Blair certainly outshone Jospin who sounded like Michael Foot. But Blair's real tests are yet to come. One thing is clear: the more constructive Britain is in Europe, the more complicated it becomes for the Franco-German couple. What price a m?nage ? trois? n
