Guilty Men's lessons from the past

In this week's Spectator, Peter Oborne and Frances Weaver trail their forthcoming book, "Guilty Men", which, judging by today's article, does a comprehensive job of lampooning the UK's pro-euro lobby. It will certainly make uncomfortable reading for those, including Mr Clegg, who still claim that "no one could see this coming".

The opening paragraph is the premise on which they make their argument:

"Very rarely in political history has any faction or movement enjoyed such a complete and crushing victory as the Conservative Eurosceptics. The field is theirs. They were not merely right about the single currency, the greatest economic issue of our age — they were right for the right reasons. They foresaw with lucid, prophetic accuracy exactly how and why the euro would bring with it financial devastation and social collapse."

There were of course those on the Labour side who made similar arguments but Oborne and Weaver hold no punches, especially when it comes to institutions of the establishment such as the FT and the BBC (We made our own attempt to highlight the folly of the pro-euro arguments in "They said it" last year):

"Even as late as May 2008, when the fatal booms in Ireland and elsewhere were very obviously beginning to falter, the paper retained its faith: ‘European monetary union is a bumble bee that has taken flight,’ asserted the newspaper’s leader column. ‘However improbable the celestial design, it has succeeded in real life.’ For a paper with the FT’s pretensions to authority in financial matters, its coverage of the single currency can be regarded as nothing short of a disaster."

Oborne and Weaver's research illustrates just how far the 'EU ideal' had permeated much of the political and media establishment - to the extent that those who disagreed where dismissed as "cranks".

"As Rod Liddle, then editor of the Radio 4’s Today programme, said: ‘The whole ethos of the BBC and all the staff was that Eurosceptics were xenophobes and there was an end to it. The euro would come up at a meeting and everybody would just burst out laughing about the Eurosceptics.’ Liddle recalls one meeting with a very senior figure at the BBC to deal with Eurosceptic complaints of bias. ‘Rod, the thing you have to understand is that these people are mad. They are mad.’"

And, in this respect, there is also an important warning for the future:

"One urgent lesson concerns the BBC. The corporation’s twisted coverage of the European Union is a serious problem, because the economic collapse of the eurozone means that a new treaty may be needed very soon — plunging the EU right back into the heart of our national politics."

We would perhaps add that the EU is already at the heart of national politics, something of which we're now reminded daily. Regardless, with the flaws of the eurozone now plain for all to see, more open-mindedness than in the past is a necessity when it comes to future debates about the best model for European cooperation, as well as UK's relationship with Europe - which faces a defining period in the coming years.

Blind faith is no longer an option.

Where have all the europhiles gone?

(long time passing)

A few days late, but this is a brilliant piece from Mary Ann Sieghart - one of the heroes from the old no to the euro campaigns in the UK - writing in the Independent earlier in the week. Taking no prisoners, Mary Ann settles the score with the British politicans who once so passionately argued in favour of euro membership:

"Hello? Hello? Speak up at the back! Blair? Clarke? Mandelson? Heseltine? Clegg? Huhne? Surely one of you could put your hand up? Well done, Alexander! Thank you for accepting that you were wrong all along about Britain joining the euro. Perhaps you could have a word with the other boys afterwards?"

She goes through the various arguments that the pro-euro camp used, which turned out to be completely wrong, and the "myths" that it accused the other side of peddling (which we have catalouged here) that have turned out to be completely right.

Mary Ann notes,

"The euro-enthusiasts were always accusing the rest of us of being anti-European....But if anti-Europeans had been asked to design a system to sabotage the EU project, they could hardly have done better than the euro. For what could be more damaging than a doomed currency area in which the poorest nations are forced to accept austerity measures and bailouts and the richest ones are forced to stump up for them? Nearly three-quarters of Germans now say they have little confidence in the euro and two-thirds of them are opposed to bailing out Greece. Hardly a recipe for European amity.

Pro-euro campaigners were quick to stamp on what they called "myths" that were, inevitably, "peddled" by our side. There was the "myth" that monetary union would lead to fiscal and political union. This is now accepted as the only possible solution to the eurozone's woes. There was the "myth" that richer countries might have to bail out poorer ones. That was supposed to be forbidden by treaty, but it's happened. And there was the "myth" that an external shock might hit some countries harder than others, causing huge dislocation. Well, it's there for all to see."

She goes on,

Now is the time for a reckoning. Let us salute the heroes who managed to keep us out of the euro. James Goldsmith, in the last year of his life, forced the Conservatives to agree to a referendum before we joined. That forced Labour to promise one too. Without that obstacle, Blair would undoubtedly have signed us up. Then it was a question of making strong enough arguments to reassure the British people that they were right in their instinct that joining the euro would be a bad idea. All credit goes to Lords Leach and Owen, joint chairmen of the all-party "no" campaign.

But on a question this big, it surely behoves those who tried to push us into the euro to recant now. Blair has become a Catholic; he should understand about confession, repentance and conversion. Danny Alexander showed how it could be done last autumn when he admitted he had been mistaken. We are still waiting to hear from Lord Mandelson, Ken Clarke, Nick Clegg, Lord Heseltine, Lord Ashdown and Chris Huhne. They are as bad as those old Marxists who never conceded communism was wrong even after the collapse of the Soviet Union. We deserve an apology. How dared they sneer at us for being little Englanders or xenophobic when we could just see that the economics were so obviously wrong?

Good question.

Rising tide

There is an interesting new poll in Le Monde today, showing that 62% of French people think that having the euro has aggravated the economic crisis in France. This is compared with 28% who think that it has protected France during the crisis - and 10% who said they were undecided.

Increasing voter dissatisfaction with the euro has been on the rise for some time now - unhappy with the cost, and the principle, of the eurozone bailout which they were assured would never happen (along with all of those other assurances on the single currency which now lay by the wayside).

For example, an FT/Harris poll back in March put the number of Germans who thought they would be better off outside the euro at 40%.

Then a poll for Handelsblatt in May found that 44% of Germans wanted the D-Mark back, and 38% of the French wanted their national currency back.

What's more - it's not just those locked inside the eurozone, but potential future members which are re-thinking their position. One year ago a poll for Swedish Television found that 47% of Swedes would vote Yes in a referendum on euro membership, and 45% would vote no - a very tight result. Yet in a new poll released just two weeks ago, opposition to joining had risen to 61%, with support for joining falling to 25%.

Increasing German unhappiness at the eurozone bailout and unwillingness to continue as Europe's paymaster has been well documented in recent months.

However, the addition of a rising French tide of displeasure at the way the euro has developed adds a new twist to the narrative that the Germans have been terribly seflish in showing reticence towards the cost of bailing out other euro member states - and one that may have far-reaching consequences.

How the EU elite got it wrong on the euro

Yesterday we published a range of different promises and reckless predictions made by politicans regarding the euro over the last 15 years. Its quite clear that politicans, central bankers and others got it spectacularly wrong on the euro - displaying a combination of naïve idealism, incompetence and dishonesty.

Yes, it's now in everyone's interest for the eurozone to sort out its mess. But we also need to be honest about the fact that beyond the economic failure - as serious as that is - this crisis is about a breakdown in trust between the political class and European citizens.

If people are ever going to re-gain faith in politics - and their belief in the EU's ability to deliver what citizens actually want - now is the time to push for an alternative model for European co-operation, one that is more democratic, and both politically and economically sustainable.

Here are some examples of broken promises and bad predictions on the euro illustrating why we simply can't go on like this (for the entire briefing, see here):

The Community shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project

- Article 104b, Maastricht Treaty, 1992.

We have a Treaty under which there is no possibility of paying to bailout states in difficulty

- German Chancellor, Angela Merkel, 1 March 2010.

[Greek Prime Minister] Papandreou has said that he didn’t want one cent. The German government will not give one cent, anyway

- German Economy Minister, Rainer Brüderle, 5 March 2010.

The single currency, far from being an agent of continental style corporatism, is probably the greatest export vehicle of Anglo-Saxon economics. The euro has done more to enforce budgetary discipline, to promote privatisation and force through labour and product market liberalisation in the rest of Europe than any number of exhortations from the IMF, the OECD, or the editors of The Economist

- Lib Dem leader, Nick Clegg, 2002.

The reality of the euro has exposed the absurdity of many anti-European scares while increasing the public thirst for information. Public opinion is already changing […] as people can see the success of the new currency on the mainland and the alarming fall in inward investment into Britain as international companies show an increasing reluctance to locate here

- Kenneth Clarke MP, 2002.

The euro has been a rock of stability, as illustrated by the contrasting fortunes of Iceland and Ireland. Joining the single currency would be a major step

- Former Labour MEP Richard Corbett, 2009[5].

We must enter the euro with a clean sheet on all the criteria

- Then Greek Finance Minister, Yannis Papantoniou, 1999

The thrust of the spirit and of the letter of the Treaty is that everything is done to construct the euro area as an optimum currency area. First by ensuring that it incorporates economies that have already proved being convergent in the fiscal field as well as in the monetary and financial fields

- Then Governor of the Bank of France, Jean-Claude Trichet, 1997

It is sometimes said that while the single monetary policy may be ‘right’ for the euro area as a whole, it is ‘wrong’ for many individual countries within the area. I disagree with this view. First, it overlooks the fact that within a single currency area adjustment can occur via prices and wages

- Then President of the European Central Bank, Wim Duisenberg, 1999

Solidarity is possible, [and] will exist. A bailout is not possible and will not exist

- Then EU Commissioner for Economic and Monetary Affairs, Joaquín Almunia, 29 January 2010

I will defend European Central Bank’s independence under any circumstance and with all my strength

- ECB President, Jean-Claude Trichet, 2007[10].

The euro is a protection shield against the crisi

- European Commission President, José Manuel Barroso, 5 February 2010[11].

The Maastricht treaty obliges the European Central Bank to pursue price stability and the ECB is more likely to overfulfil its treaty target than to ignore it. As long as this is the case, there is not the slightest danger of a break-up of the Eurozone […] On the contrary, I expect the Eurozone to be exceptionally stable in the long run […] Make no mistake, the Eurozone is here to stay

- FT columnist Wolfgang Munchau, 2006

The euro area now represents a pole of stability for those countries participating in it by protecting them from speculation and financial turmoil. It is strengthening the internal market and contributing to the maintenance of healthy fundamental figures, fostering sustainable growth

- European Council conclusions, 2001