15th February 2002

The attempt by the European Central Bank to censure Chancellor Gordon Brown for his plans to invest public money in the public services and the threat, now withdrawn, to impose a fine on Chancellor Schroeder for exceeding the approved limit for public expenditure, in part forced by the high level of unemployment in Germany, is a stark reminder of what joining the Euro means for Europe and would really mean for us.

After all the hype about the new Euro currency and how exciting it is and how convenient it would be for British holidaymakers on the continent if Britain joins the real issue has at last surfaced, and it is about the total loss of democratic control of our economy which we would experience if we did go in.

The Maastricht Treaty, which we have already signed, lays down, under the so-called Stability Pact, the limits of borrowing and spending that are permitted in every country which ratified the treaty, and although we have not signed up to the Euro itself we are still subject to the same rules, which is why we are being forced to privatize.

The second problem that will soon have to be confronted by countries in the Eurozone is that they will all be subject to the same interest rates also set by the Central Bank, and it is obvious that conditions vary from country to country and a set rate may be too high in some and too low in another which could have disastrous results that could not be corrected.

The Maastricht Treaty also makes it an offence for any government even to try to influence the decisions of the Central Bank and if German, French, Italian, Spanish or British trade unionists or even industrialists were to appeal to their own elected governments to reduce interest rates to save jobs the finance ministers of the governments they have elected would be unable to do so.

This in turn would undermine all public confidence in the democratic process because if the parliaments we elect are powerless why should anyone bother to vote, and if they don't that is the end of democracy itself, opening the way for some demagogue to take over.

Inevitably people, here, who are suffering will look for a scapegoat and it will be much easier to whip up hostility to the Germans or the French than to understand the real nature of the problem which is that it is the system itself that is at fault.

Indeed the dangers are even greater than that because the discovery that we are governed by bankers we did not elect, and cannot remove, is bound to lead to the crudest form of nationalism and I can even visualize a breakdown in Europe as we saw in Yugoslavia with all the consequences that followed.

Of course Europe must cooperate for the benefit of all its peoples, and the world, but that cooperation must be on a democratic basis that underpins and entrenches the rights of all its citizens to govern themselves through their own elected parliaments, harmonizing their policies slowly and by consent in line with the wide variations in the conditions that each face.

It is not clear when, or even if, a referendum will be called to determine whether Britain should join the Euro since if the prime minister called one and lost it - as well he might -it could spell the end of his government and a very uncertain future, but we must be ready for that debate.

I suspect, without any inside knowledge of any kind that no Chancellor of the Exchequer could possibly want to give up the power he has to control our own economy and no Governor of the Bank of England would want to see his own role downgraded to that of a mere branch manager, taking all his orders from head office in Frankfurt.

What is of the most immediate importance to those of us in the labour movement is how we can persuade some influential trade union leaders, who now support the Euro, to realize that they are cutting their own throat by doing so, in that they could not influence the government they support because that government would be utterly powerless too.

Put very crudely the Euro question is a fundamental question as to whether we still believe in democracy itself or whether we have abandoned any hope that it might help us and are prepared to trust our future to bankers who do not share our objectives and are determined to control us in the interest of capital, using deflation as the simplest way of weakening Labour to boost profits for their real constituents the shareholders of Europe and the world.

If ever there was a case for studying history as a guide to the future this is it and the neglect of our own history in the labour movement is a major tragedy that we have it in our power to correct, for anyone who looks back on how the trade unions came into being, fought for and won the vote and then developed a political wing to improve the conditions of their own members, through parliament, must see that we have to do it all over again.

And those who remember, or bother to read about, the history of the nineteen thirties will realize that it was the despair caused by the policy of the bankers which paved the way for Hitler and Mussolini and then took us into war.

Meanwhile a simple tip for holidaymakers to the continent: any British bankers card will, today, dish out Euros in any bank in Europe, without having to give up our democracy here at home.

15/2/2002