This Week in Europe, 16 June 2000
Executive Director of the Caribbean Council for Europe
"The Euro is changing the face of Europe. Europe’s economic fundamentals are sound, sounder than they have been for over a generation. The EU’s economies are growing faster than almost anywhere else in the developed world. The European Central Bank is also meeting its objectives and delivering low inflation and higher growth across Europe."
So wrote the British Prime Minister, Tony Blair in a unique joint article with Spain’s Prime Minister, Jose Maria Aznar, published in the Financial Times on June 13. The two prime minister’s comments came in the context of the EU summit to be held shortly in Portugal but have triggered a heated debate in the United Kingdom over whether Britain should adopt the single European currency.
The article was intended primarily to set the scene for Spain and the UK to promote their belief that further economic liberalisation within Europe will strengthen the Euro and enable the strong British economy to converge with that of other European economies.
Its aim was to indicate a fundamental difference in the two’s approach to that of their colleagues in Germany and France. It was the public face of a new Anglo-Spanish axis which aims to counter a re-invigorated Franco-German alliance which Britain and Spain believe is intent on slowing the process of economic liberalisation in Europe while promoting a federal Europe.
But this was not the way the article was read in Britain. Rather it suggested a strategic shift in the way that Britain’s Prime Minister saw the United Kingdom’s place in Europe and in relation to the single currency. The article seemed to suggest that Prime Minister Blair was aware that the criteria set for entering the Euro were close to being met, that Europe’s economy was beginning to grow in a sustainable way, the Euro was being well managed and growing stronger and that no matter how divided his cabinet was, Britain had to eventually tie the pound to the single currency.
The effect has been to set the scene for a fundamental political and historic debate in the United Kingdom. This will determine not just Britain’s economic place in the world but its future politics and strategic alliances if government either fails to proceed into the Euro or the electorate choose to reject monetary integration with Europe.
The issue of Britain and Europe and the Euro goes right to the heart of British consciousness. Britain has a peculiar history. Unlike the rest of Europe it has passed through almost a thousand years during which no one invaded successfully. Instead Britain industrialised first, created wealth, built an Empire and a unique confidence - sometimes arrogance - that reached its zenith in the pivotal experience of standing alone against Nazi Germany. Folk memories and associated myths, natural conservatism and the heightened sense of sovereignty associated with being on an island makes Britain’s different.
Its electorate is as a consequence unusually vulnerable to emotional appeals about maintaining the nation’s independence of action. This is especially so at a time when voters see little practical difference in the ability of either main political party to deliver rapidly changes in areas of domestic policy such as healthcare or education.
As a result British politics may be polarising around radically different approaches to issues on which there had previously been a consensus. Europe, represented by the Euro debate, is now at the forefront of the new divide, but there are other signs of division over relations between town and country, crime and race relations, immigration and asylum seekers, national identity and the autonomy or otherwise of the regions of the UK.
None of which is to suggest that Britain is on the edge of some fundamental crisis. Rather it is to note that in such circumstances the outcome of the next election due in 2002, but widely thought to be likely to be called in May 2001, is no longer the certainty it seemed even three months ago.
From having an unassailable lead and charismatic leadership, Britain’s new Labour party seems to be rapidly loosing ground to a Conservative Party despite the latter’s apparent unreadiness to lead or govern. Moreover, Labour is in danger of allowing historic internal divisions to surface as new labour elitism and more importantly the Euro and Europe create differences at all levels within the party. To make matters worse for Labour, memories of the ineptitude in the closing years of the last Conservative Government are beginning to fade as Britains’ governing party is perceived to be placing more emphasis on image than substance.
The result is a real possibility that the next British election may result in a dramatically diminished Labour majority and an election after that being called sooner rather than later, perhaps over the Euro, which in turn might see a new populist right wing Conservative Government returned.
Unfortunately the Euro has become a symbol of all that is considered federal and not British and one of a number of nationalistic and xenophobic issues around which the next British election or any referendum on the Euro will be fought.
A weak Euro has already had a negative effect on prices for Caribbean sugar, rum, bananas and other goods. It has dissuaded some tourists in the Euro zone from travelling to dollar related destinations. For these and other reasons the debate in the UK on the Euro has to be of interest to the region. But much more importantly the outcome will determine how Britain positions itself in the world. Already politicians who for the most part seem unable to see the world at large dominate Britain’s Parliamentary Labour party. The British Conservative Party now seems intent on building a party in Government with an equally narrow opinion of the world.
Governments quite correctly dialogue with elected Governments rather than opposition parties. Despite this it may make sense to begin a conversation now with the British Conservative Party and start to cultivate a new and very different generation of opposition politicians. Only in this way will the region be able to decide how to engage with those who may possibly be in government in Britain during the negotiations to come which will end preferential arrangements with Europe.