Saturday, June 04, 2005
The Future of the EU
Secondly, I suspect that the eurozone's days are numbered. It was always a dubious proposition that so many very different countries would be able to find a common interest rate suitable to their needs and the restrictive euro rules regarding national deficits acceptable. Italy, now arguably Europe's 'sickest man', faces economic decline as its manufacturing markets are ravaged by the emerging giants of India and China. The straightjacket of the euro means that it cannot use devaluation as the antidote but has to face rising unemployment. How long can this last? I suspect the euro will prove to be a brief and unhappy interlude in Europe's financial history long before we get anywhere near considering an application to join it.
So is the EU finshed? No. Far from it. 60% of our exports are to the EU and the single market has brought many benefits to millions of Europeans. This will continue to provide the bedrock of the EU but the euro and other decorations promised by the constitution - a common foreign policy, a single president for a period of years not six months - will never be implemented. Ironic that Maggie Thatcher's passionate objections to the EU have proved to be shared by millions of others. What voters do not properly understand, they most often end up objecting to.