Without a single currency Europe's single market could fall apart, warns Leon Brittan. Emu, he says, is vital-the UK, of course, should continue to watch and waitby Leon Brittan / December 20, 1995 / Leave a comment
Just as hemlines go up and down, so do views on the merits of closer European ties. While it is tempting to focus on reports that suggest that the warmth of feeling towards Economic and Monetary Union (Emu) in Europe as a whole has dropped a few degrees over the past year, this is misleading. If anything Emu is more likely than ever.
The strength of feeling among Europe’s leaders has certainly not diminished. Chancellor Kohl of Germany and President Chirac of France remain committed to the goal of Emu and seem determined to take the unpopular decisions needed to make it a reality. In Belgium, Sweden, Spain, Italy and elsewhere, other governments are continuing to do what they can to meet the convergence criteria.
At the European level, too, preparation is continuing apace. In the past year the Commission has produced its ideas on the transition. Member states, the European Monetary Institute, banks and companies have all commented on it. European finance ministers have also begun to reflect on the most difficult political decisions: what such a currency might be called, and how those countries who can participate in a single currency from the outset will relate to those who cannot.
Nor should we draw any conclusion from the fact that finance ministers have decided to focus on 1999, bypassing the option for Emu in 1997 given by the Maastricht treaty. This is not a sign of weakened commitment. Rather they feel that it is more important to ensure that the move to a single currency is done properly than that it is done at all. We should be under no illusions: Emu really is likely to happen.
The current mood of pessimism does not relate so much to the prospects for a single currency; paradoxically it arises from a dawning realisation that Emu is going to happen. And because this represents a significant change, which entails both potential cost and risk, it worries people. Perhaps if we were simply choosing to change the name of our money for no other reason than to strengthen our sense of “Europeanness,” I too might wonder whether the cost and the risk would be worth the return. But this is not the case: Europe needs Emu-not only to move forward and compete on equal terms with Japan and the US, but also to avoid an unravelling of the European single market.