Euro - economics of the madhouse

The process of monetary union must go hand in hand with political integration and ultimately political union. EMU is, and was meant to be, a stepping stone on the way to a united Europe. -- Wim Duisenburg, President of European Central Bank

Of course the risks will remain, especially if we don't follow up the bold step that led to the single currency with further bold steps towards political integration -- Gerhard Schroder, German Chancellor

There is no example in history of a lasting monetary union that was not linked to one state. -- Otmar Issing, chief economist, German Bundesbank Council

How, with the system of institutions that exists today, are 30 states suppposed to balance interests, take decisions and then act? There is a simple answer: the transition from a union of states to full parliamentarisation as a European Federation. This means nothing less than a European parliament and a European government that really do exercise legislative and executive power. -- Joschka Fischer, German Foreign Secretary

Let me make clear from the outset, that monetary union is fundamentally a political rather than an economic issue. -- Eddy George, Governor of the Bank of England

The euro is a decisive step towards the ever closer political union of Europe. -- Carlos Ciampi, Italian Treasury Minister

They argue that, outside the euro, Britain will have no leverage to determine the future - a reductio ad absurdum that we must give up out sovereignty to retain any power. That, if true, would be ample testament to show how undemocratic a beast a Euroland dominated EU is becoming. -- Janet Bush, former Economics Editor, The Times

The process of centralisation overshadows everything. In the end, if it continues unchecked, it will indeed reduce British influence. By staying out of the euro, we shall help to slow, and hopefully stop, the process. -- Sir John Cole, former Head of the Diplomatic Service

The idea that this process can possibly meet the needs of over 350 million Europeans is fundamentally flawed. The needs of each region in Europe differ too greatly and their economies, environment, cultures and history are too diverse. A single currency will increase regional disparities, add to unemployment across Europe, and undermine local economies. -- Caroline Lucas MEP

The euro implies one rate of interest for all participating countries regardless of their economic circumstances. This can only be described as the economics of the madhouse. -- Tony Thirlwall, economist

There is not a single country in Europe whose people have voted to accept the euro which proves that the European governing class have a contempt for those who they are supposed to represent. -- Tony Benn MP

It is becoming increasingly clear that to tackle unemployment and rebuild healthy, stable and sustainable societies can only be done when citizens and nations take back control of their economies. -- Colin Hines

... if you come to me with an opinion poll and say 'do you want to join the euro today?', I would say no. -- Tony Blair speaking at a press conference in Seoul, 19 October 2000

The unwanted euro was launched 1 January 1999. In the first year it lost 20% of its value. By September 2000 it had lost 30% of its value. During September 2000, G7 mounted a futile rescue attempt for the euro. Billions of dollars were poured into a bottomless pit. The best that was achieved was that the euro failed to fall any further. A few weeks later, during the Middle East crisis, crass comments by Wim Duisenburg, President of European Central Bank, caused the euro to once again go into free fall. Late October 2000, the euro had lost a third of its value. There is no mechanism to remove Duisenburg.

Early November 2000, ECB mounted its own go-it-alone intervention, with three interventions in the space of a week. All of which dismally failed to rally the value of the euro. According to board member Ottmar Issing, the ECB decided to intervene 'owing to its concern about the global and domestic repercussions of the exchange rate of the euro, including its impact on price stability.' The foreign exchanges were not impressed.

Following the first intervention, Michael Klawitter, investment bank WestLB:

I have strong doubts whether it will work. They will be forced to step in several times again just to defend the [current] level.

Each intervention by the ECB since the G7 September action left the euro at a lower peak.

One currency, one interest rate does not work over a large culturally, socially, politically diverse area, not to say a large area that lacks economic convergence. As economist Tony Thirlwall says 'I know no one who believes that the current eleven countries of Euroland constitute an optimum currency area.' The Bank of England has warned: 'Monetary union requires one official interest rate. That may entail some countries setting their rate at a level they would not otherwise have wanted.'

Within the UK one interest rate does not work for the whole country. The south overheats, the north goes into recession. Within sectors, the manufacturing sector whines whilst the computing/software/telecomms sector records excessive unsustainable growth. Unemployment in the north east is three times that of the south east.

Scotland through more than two hundred years of economic union with England has learnt the downside of a single currency. Economic policy is set to suit the prosperous southern core around London. The southwest suffers, as does the north of England, and of course the whole of Scotland. For a contemporary example we only have to look to Germany. The union of East and West Germany caused immediate economic collapse of East Germany, which in turn dragged down West Germany.

Across the eurozone there are unsustainable differences in prosperity and employment levels. The per capita GDP in the EU's richest cities is five times that of the poorest rural regions. Unemployment levels in the worst hit regions of Spain are ten times higher than the more prosperous regions of Austria and Netherlands. Unexpected economic shocks will hit the eurozone differently due to regional variation.

Comparisons are often made with the US of the need for a large market (a large market which only benefits Big Business). But these comparisons are flawed. The US is not a centralised authoritarian state. Individual states can raise taxes, subsidise businesses, pass laws. There are no language barriers at state lines. There is great labour mobility. People do not think twice, before moving across from New York to California, or down from Pennsylvania to Florida. This level of labour mobility does not exist in the UK let alone across Europe. Would the UK, or any other state for that matter, tolerate mass migration from other parts of the EU, a mass influx of foreigners? Lack of mass labour migration is not a bad thing as it breaks family and community ties, leads to societal and family breakdown. Federal capital is available to pour into states to level out economic differences. No such capital is available in the EU. Would Brits or Germans tolerate raised taxes, or more likely lower public spending, to bail out another part of the EU?

Even in the US thriving local currencies have been formed to disconnect the local economy from the national economy. In London a local currency for London is under serious consideration.

The EU will see further concentrations of capital and work following the trend we are already seeing. Capital tends to attracts capital as that is where the best returns can be gained. Labour would flow to where there is work. The periphery would suffer. Economic policy would be geared to suit the power centres.

The euro is likely to exacerbate regional differences, these in turn will lead to widespread social unrest. Deteriorating economic circumstances and social unrest, the inability to deal with the underlying economic conditions that are causing the social unrest, left with only a security solution to deal with social unrest, will lead, as national governments are seen to be powerless, and Central Bankers and Commissioners remote and unaccountable, to a rise in civil disorder, Nationalism and Fascism. It was exactly these conditions that led to the rise of Fascism and Hitler in the 1930s.

No major political party in the UK (with the exception of the Tories) are reflecting either the views of their own members or that of the public. The LibDems are split 50:50. The Greens are the only party with a coherent policy of opposition to the euro and promotion of local sustainability. The same disfranchisement is true of the trade unions. A poll of trade union members carried out April 1999 showed 61% wanted to keep the pound, 23% said adopt the euro; by September 1999 this had changed to 67% in favour of retention of the pound, only 17% wanted the euro.

The UK business community is not solidly behind the euro as is so often falsely portrayed. The Institute of Directors is solidly against the euro, as is Business for Sterling. CBI members are 2:1 against backing the euro. An FT survey of the chief executives of the CBI's 350 largest member companies showed 7:1 were in favour of promoting issues other than the euro.

Across Europe people don't want the euro, don't want the European superstate. In France and Germany, polls have shown that people given the choice would say No. Following the disastrous slide in the value of the euro, losing a third of its values since launch by October 2000, a poll in Germany showed 84% had little or no confidence in the euro. Only the Danes have so far been given the choice and they said No. The Brits and the Swedes are waiting their chance to say No.

The architect and driving force of the European superstate, the disgraced former German Chancellor Helmut Kohl, has admitted that he forced through the euro against the wishes of the German people and that it may have cost him the 1998 general election (Helmut Kohl, My Diary 1998-2000): 'I knew right from the start that the project was to be carried through against severe fears and resistance.'

The ECB has belatedly recognised that it is not just international bankers and currency speculators who don't want the euro with a soon-to-be launched $60 million of European taxpayers money advertising campaign to con the people of Europe that the euro is a good thing.

People across Europe should unite, whether inside or outside the eurozone, should demand the right to say No. Those inside lack the right to withdraw, but this should be challenged as an illegitimate transfer of power. If all countries said No, the euro would collapse as it would lose what little credibility it has left.

The networks against globalisation indicate the route those opposed to the euro and the Eurostate should follow. Networks have to be formed across parties, across countries, to oppose the euro and Eurostate. The anti-globalisation campaigners should be invited to join the struggle as this is part of the fight against globalisation. It was such an alliance, making full use of the internet, that derailed the MAI. A first for the forces of anti-globalisation - veteran diplomats called it a first in global politics.

Apologists for the euro and European superstate claim fears are unfounded or a distortion of the truth but one only has to listen to the words of European leaders to learn what the truth is, as Belgian Prime Minister Guy Verhofstadt speaking at the LibDem conference (September 2000) said that after imposing EMU the next task was 'to enlarge and to strengthen the union, we must now move to a political union as well. In my opinion this should entail a truly common foreign and defence policy and a common approach of internal, migration and justice issues.'

Or the words of German Chancellor Gerhard Schroder (1999):

We must finally bury some erroneous ideas of national sovereignty. Our standing in the world regarding foreign trade and international finance policies will sooner or later force a Common Foreign and Security Policy ... National sovereignty in foreign and security policy will soon prove itself to be a product of the imagination.

Those who dare challenge the Eurostate, the need for a common currency and all the baggage that goes with it are insulted, called eurosceptics, little Englanders, anti-European, xenophobic. Brits are told they are all alone and will be left behind. The Danish referendum has blown this out of the water. Attempts at intimidation did not work, the Danes voted No to European domination.

The Danes were told they would be left behind, they would lack influence, their economy would collapse. The whole of the political establishment lined up to intimidate the Danes. Of 38 newspapers, 35 parroted the establishment's line, the TV stations kept to the party line. The day after the the Danes said No, the forecast meltdown of the Danish stock exchange failed to materialise, the collapse of the Danish Kroner did not happen, European leaders lined up to show their contempt for the Danish people. This contempt for the smaller countries is nothing new, following the launch of the euro ECB President Wim Duisenburg said 'policy will be directed towards the French and German Economies, smaller fry with other needs come second.'

Outside the eurozone the Danes have influence over their own economic affairs, inside they lose control of their economy in exchange for negligible influence over European economic policy.

Sir John Coles, former head of the British Diplomatic Service and Permanent Under Secretary of the Foreign Office, has argued that for Britain to retain influence it is better to remain outside of the euro. The Bank of England has also warned that the UK would have little influence on the inside as 'the country would consistently be outvoted by the group of core countries.'

The Maastricht Treaty makes it unlawful for any country to attempt to influence the European Central Bank. A country may find its economy in meltdown, even then it cannot ask for help.

The euro is not a Left/Right issue, it is an issue of democracy, who runs the country, the people of the country or non-elected Central Bankers and Commissioners.

The UK now has an independent Central Bank, free to set interest rates as it sees fit. But it does so within an interest rate target set by the government, in time of crisis the government can take control back from the Bank of England.

Countries within the eurozone no longer have control of their interest rates, exchange rate and little control of economic policy. They will soon lose control over taxation.

Even former Chancellor Kenneth Clarke (a strong advocate of the euro) has conceded that the ability to levy tax is a fundamental part of a free democracy: 'I don't think that you have got your own parliamentary democracy, in which I am a strong believer, if you are taking away from your national parliament the right to decide how the burden of taxation is shared, and similarly, what the priorities are in spending public expenditure.'

These are the nitty-gritty of election campaigns. Without, there will be even fewer incentives to cast a vote. Germany is already pushing hard for a harmonised tax regime, whether or not countries are within the eurozone. The Commission wants, as part of the Nice Treaty, to remove the right of veto on tax matters.

The real agenda on monetary policy and taxation was very ably put by the President of the Bundesbank Hans Tietmayer:

A European currency will lead to member-states transferring their sovereignty over financial and wage policies as well as monetary affairs ... It is an illusion to think that states can hold on to their autonomy over taxation policy.

Commission President Romano Prodi was equally forthright on taxation policy:

As long as the veto [on tax] exists, the EU will be like a soldier trying to march with a ball and chain round one leg.

To move towards a sustainable future we have to retain control over taxation policy, we have to have the ability and flexibility to move tax from labour to a tax on resources and pollution.

If we wish to treat people with dignity we have to have the freedom to introduce a Citizens Income to grant people some form of economic freedom to remove them from the degrading treatment meted out by Job Centres and Social Security Offices.

Finland, when it suddenly lost half of its export markets when the Soviet Union collapsed, was able to in part compensate by a currency devaluation. It no longer has that freedom. Finland's Finance Minister Sauli Niinisto acknowledged the loss of economic freedom: 'Our fiscal policy must be kept tight and, all the more so, when we no longer have at our disposal the range of monetary tools that we used to have.'

Ireland is currently enjoying an unprecedented boom. House prices in Dublin have doubled in a year, the streets are congested with traffic. There is nothing Ireland can do other than sit back and suffer as they have lost control of interest rates. Pedro Solbes, commissioner for economic affairs, has admitted that the Irish economy is 'clearly overheating', but has gone on to say that nothing can be done. All that is left for the Irish government to do is screw wages. In 1999, 28,000 nurses went on strike for the first time in their history to protest at low wages and an appalling low level of investment in the health service. Anyone who doubts the poor level of public spending and infrastructure investment, this at a time of unprecedented growth in the economy, only has to drive from the airport to Dublin and tour the city streets.

Two-thirds of Ireland's foreign trade is outside of the eurozone, only one third is with the erozone. The Irish want to see the UK join the euro, not out of any perceived benefit to the UK but for the UK to prop up a sick and ailing currency.

But even in Ireland which has benefited from massive EU handouts there are beginning to be questions raised. Minister Sile de Valera (grand-daughter of Eamon de Valera) has questioned whether it is in Ireland's interests:

We have found that directives and regulations agreed in Brussels can often seriously impinge on our identity, culture and traditions. The bureaucracy of Brussels does not always respect the complexities and sensitivities of Member States ... It is a move I would not personally favour. It is not necessarily in our interests.

Ms de Valera has urged Ireland 'to express a more vigilant, a more questioning attitude to the European Union.' She is not alone. Irish Deputy Prime Minister Mary Harney has said that Ireland favours a Europe of Independent States, not a centralised Superstate or United States of Europe.

Germany's problems are at the opposite end of the spectrum to Ireland's, the German economy is weak and needs a little stimulation. When former German Finance Minister Oskar Lafontaine argued the case for Germany and called for a lowering of interest rates he found himself at loggerheads with Wim Duisenburg. It was the democratically elected Lafontaine who was forced out of office, not the unaccountable Duisenburg. Once Lafontaine was forced out of office, ECB lowered interest rates. The German experience illustrates, as does the Irish, that one interest rate does not suit all, it also illustrates the lack of democracy in the Euro Superstate.

According to Bank of England Governor Eddy George: 'If we had joined EMU from the start, and had eurozone interest rates over the past 18 months or so, it is very difficult to envisage how we would have avoided an inflationary boom in the UK.'

In October 2000, the Irish inflation rate at 6.8% hit a 16-year high (three times the eurozone target). There was nothing the Irish could do as interest rates are controlled by ECB and they are only interested in the core countries, whose economies would collapse if interest rates were raised.

Bank of England has estimated that the costs to the UK could run at £9 billion a year, or 1% of national income.

The No campaign in Denmark had an advantage, an independent group of economic advisers stated there was at best marginal economic advantage, but this was far outweighed by the risks. The Danes have a pension system that is better than most. It would have been weakened in an attempt to harmonise with other countries to facilitate transferability. Cuts in public spending, dictated by the European Central Bank, would also put the pension at risk. The establishment threatened 10,000 jobs lost, then 20,000, eventually the figure went up to 50,000. The establishment was not believed.

Apart from a weak currency, the eurozone has been bad for employment and economic growth. The latter can at best be described as sluggish. Unemployment is twice that of the US, three times that of Japan. Unemployment in the UK is half that of the eurozone.

Big Business has tried to intimidate by threatening job losses. Whether a bluff or not the bluff should be called. If there are job losses then it is business as usual. Big Business does not create jobs, it destroys jobs. Big Business exists to make money for shareholders. If job losses are threatened these losses will be part of the process of globalisation and downsizing. Jobs are relocated to the cheapest zone where labour can be most easily exploited. This will happen whether a country is in or out of the eurozone.

Japanese companies have recently threatened massive job losses and blamed it on the euro. This deserves closer scrutiny. These are the same companies who a decade or so ago moved into deprived areas. They were able to take advantage of a decimated coal industry, a cowed and de-unionised workforce, high unemployment, low wage costs, plus they received massive hand-outs from the taxpayer. To take advantage of similar conditions they are now relocating to the old Eastern Bloc. Politically they are unable to say they are relocating to exploit a cheap workforce, instead they seize the opportunity and make use of the situation to score a few political points and apply political pressure by laying the blame on the UK's non-membership of the euro.

The big push for the euro is coming from Big Business via the European Round Table of Industrialists, Association of Monetary Union of Europe and the European branch of the American Chamber of Commerce. Big Business wants a homogenised large market with as few restrictions as possible. Only the euro and the EU can deliver this.

Former Commission President Jacques Santer acknowledged the power of the AMUE when addressing the board of directors (1998):

The members of the Association have been a major driving force behind the EMU project. Many of your companies have played a leadership role by clearly advocating the advantages of the single currency for the private sector and society as a whole.

AMUE Secretary General Bertrand de Maigret echoed this view: 'They call us, we call them, they see us, we discuss matters. They are quite flexible.'

AMUE was established by the European Round Table of Industrialists to push for the euro. ERT has a membership of around 45 of Europe's biggest transnational companies with a combined turnover close to £400 billion. Members include Shell, BP, BT, BAT, Unilever Philips, Siemens, ICI, GKN, Carlsberg, Fiat, Bayer, Nestle, Pirelli, Airbus Industrie, Daimler-Benz, Norsk Hydro, Erricson, Nokia, Hoffmann-La Roche, Rhone-Polenc etc. ERT has unprecedented EU access and is the main driving force behind the European project. As former ERT Secretary-general Keith Richardson put it: 'industry is entitled to a system that delivers results: an EU which functions like an integrated economic system with a single centre of overall decision making'.

Keith Richardson also described the ease of access to key decision makers:

Access means being able to phone Helmut Kohl and recommend that he read a report. Access also means John Major phoning to thank the ERT for for its viewpoints, or having lunch with the Swedish Prime Minister just prior to the Swedish decision to apply for EC membership.

ERT has also pushed hard for a trans-European transport infrastructure to ship their goods around and for a Common European Security Policy to protect European Business interests.

A Bill passing through parliament will bar foreign contributions to political campaigning in the UK. European institutions and European corporations are exempt from its provisions.

There were good reasons for Harold Wilson to call the European Community (as it then was) 'a Magna Carta for the barons of the multinational mega-corporations.'

National currencies impose a minor cost on travellers (which should be seen as trivial). The same minor cost is imposed on cross-border business. Currency fluctuation adds in an additional unknown cost. This, like the Tobin Tax on international speculative currency flows, should be seen as an advantage not a disadvantage.

The loss of these currency transaction costs are the only redeeming feature of the euro, though as economist Tony Thirlwall warns 'I see no redeeming feature except small savings for businesses and tourists in exchanging currencies. The economic and political risks are enormous for such trivial gains.'

The transaction costs amount to about £30 billion/annum, or 0.1% of GDP. These are swamped by the initial conversion costs and the ongoing costs of loss of economic control and the costs of European bureaucracy.

It is estimated that the conversion costs to NHS in England alone will amount to £75-95 million. The exact costs are not known as the NHS are under instruction not to release the figures.

The Commons Trade and Industry Select committee in a report published 16 November 2000 has criticised both government and industry for seriously underestimating the conversion costs of taking the UK economy into the euro. The committee chairman has put the figure at £35 billion. This is close to the £36 billion in a report commissioned by Business for Sterling.

A further claimed advantage is that of price transparency, but we already have this via the internet.

Multinationals although they have operated across the world have in the past tended to operate through national organisations, this is starting to change. Reebok had 14 distribution centres in Europe, three years later this was down to 10, now, with the launch of the euro, they have one for the whole of Europe - extra shipping costs (not counting that from their sweatshop factories), massive job loses. Multiply this across all sectors and we have traffic congestion, noise, pollution, increased greenhouse gases.

In Farnborough a business airport is being expanded, this at a time when aviation is the fastest growing contributor to greenhouse gases, overwhelming the gains achieved in all other sectors. The sole rationale for this airport is to enable business executives to control their European and global empires.

A single market accelerates mergers and acquisitions to enable domination of the market. In 1997 a record $384 billion was spent on European mergers, up 50% on the previous year, this record was exceeded the following year.

The homogenised global market that global corporations wish to create is seen at its worst in the stolen youth culture that is then sold back as brand-name logos.

Author of No Logo, Naomi Klein:

The branded multinationals may talk diversity, but the visible result of their actions is an army of teen clones marching in 'uniform,' as the marketeers say - into the global mall. Despite the embrace of polyethnic imagery, market driven globalisation doesn't want diversity: quite the opposite. Its enemies are national habits, local brands and distinctive regional tastes. Fewer interests control ever more of the landscape.

Multinationals that cater for regional and national differences are seen as inefficient, they have to drive a common culture, a common market.

Naomi Klein again:

... global youth marketing is a mind-numbing repetitive affair, drunk on the idea of what it is attempting to engineer: a third notion of nationality - not American, not local, but one that would unite the two, through shopping.

It is sometimes claimed the euro is a bulwark against globalisation, it is not. It creates the very conditions for globalisation to prosper. Transnationals are able to grow and prosper within Fortress Europe to be unleashed on an unsuspecting world, in the same way the Italian mafia was ignored in America because it only preyed on Italian-Americans, but when it was noticed it was too late as it had grown too large and powerful in the Italian-American ghettos to be controlled.

The Commission is also a major player on the world scene forcing forward globalisation. It was the Commission who engaged in unauthorised negotiations at Seattle to open up Europe to GM and it was only the presence of protesters on the streets that let the cat out of the bag. The EU was also a major player behind MAI, and they are still trying to force through MAI Mk II. The Commission through the Treaty of Nice is wishing to have sole sovereignty in WTO negotiations on investment, intellectual property rights and the trade in services (eg water, education and health). These three areas could have a devastating impact on third world countries.

As Caroline Lucas and Mike Woodin have noted:

In EMU we are witnessing nothing other than the creation of the European branch of the globalised economy, yet the economics of globalisation are far removed from the economics of sustainability.

Within the eurozone a hard monetary policy is being pursued. Price stability is the overriding criteria. The convergence criteria is less than 3% GDP on public spending budget deficit, government debt to be less than 60% of GDP or declining at a satisfactory rate. Economic policy within the eurozone is the sole prerogative of the European Central Bank. Any attempt at political interference is to be met by hefty fines.

Entry into the eurozone is a one way process. On entry member states have to deliver 80% of their gold reserves (for Britain £80 billion). This is non refundable, and in any case there is no exit mechanism.

The members of the ECB are unelected and unaccountable. They cannot be removed. Were the entire board to go insane there is no mechanism to remove them. Wim Duisenburg already seems to lack a full collection of marbles. The minutes of ECB meetings are not made public, the press are not invited or entitled to attend ECB meetings.

Brussels has a direct say and has to approve government spending plans. When Tony Blair said he had no intention of deviating from the Tory's tax plans it may not just have been an attempt to please New Labour Big Business paymasters, it may have been Blair had no choice. On taking office Brussels immediately dispatched a secret document Council Recommendation 11393/97 demanding that the incoming government 'strictly implements its budgetary policy', 'maintaining a rigorous control of public expenditure' in accordance with the stability pact. None of this was made public at the time because the EU diktat was issued under Maastricht Article 104c(7) which explicitly states that when the Council of Ministers issues instruction of a delicate nature 'these recommendations shall not be made public.'

In order to achieve the spending criteria of the stability pact Britain makes use of Public Finance Initiative, now Public Private Partnership. By this sleight of hand accounting conjuring trick the immediate cost is kept off the public accounts balance sheet through private industry funding the cost of public projects (though often via public grants and soft loans) and the public paying the cost over the next decades. PFI also has the advantage for Big Business of being a very enjoyable gravy train. PFI is privatisation via the back door, enabling Big Business to take control of public assets it could not otherwise reach.

City accountants Chantry Vellacott DFK have estimated that a typical PFI contract costs the public purse some 5% more than if the Treasury had borrowed the money direct. For every £1 billion spent via PFI it costs the taxpayer an extra £50 million/annum. Currently the government has committed £84 billion to PFI and PPP

If we want to move towards a more sustainable future then we have to have the flexibility to increase public spending, at least in the early stages, to, if nothing else, pump prime the process. We need public money for organic farm conversion, capital investment in public transport, renewable energy projects. We will need ongoing expenditure to run our schools, hospitals, public transport systems. Which is better, a public funded mass transport system available for everyone to use, or privately funded individual transport systems?

We have to adopt the pragmatic approach of the Swiss, where we use public or private finance depending upon which best suits the achievement of our stated gaols. But these end goals should be a better, more sustainable society, not a means to line the pockets of the rich.

Even within its own narrow monetary definition of economic well-being the euro has to be deemed a failure. The inflation target is 2%. Inflation is well outside this target, in August 2000 it was 2.3% and by September 2000 it had shot up to 2.8%.

The euro lacks as Stephen Lewis of Monument Research has said 'sound fundamentals', and he doesn't believe 'we are near a floor for the currency.' A weak euro ought to benefit Euroland through booming exports, but it has not, the European economies have remained sluggish. British exporters have griped at the high pound relative to the euro (Britain exports more to outside the eurozone), but even with this claimed disadvantage Britain was in August 2000 in trade surplus with Europe for the first time in over five years. This is only the fifth time a surplus has been recorded since records began in 1988.

The UK has not seen the economic growth rate that was promised on joining Europe. The average rate has been lower since joining than the rate from 1950-73. The short period in which UK was part of ERM was devastating for the British economy - £18 billion lost from currency reserves in trying to prop up the pound, artificially high interest rates, one million jobs lost and 1.75 million home owners driven into negative equity.

We can contrast the 'good times' since joining Europe, with Tony Thirlwall's description of the UK economy since leaving ERM, the prospects for the future and the rationale for remaining outside the eurozone:

In contrast to most of the rest of Europe, the UK economy is currently in a relatively healthy state with inflation low, unemployment falling, and the growth of output improving. If Britain retains control of its own currency and exchange rate, and is able to decide its own interest rate and fiscal policy, it has the prospect of continuing the economic performance of the last four years. To sign up to the euro, and to lose control of the weapons of economic policy, would serve no useful purpose. We would be at the mercy of a European Central Bank whose sole purpose is to keep the lid on the price level despite the fact there is no scientific empirical evidence that price stability is a precondition for faster growth or the creation of jobs.

As one of the world's major economies, the UK is more than able to stand alone, and provided it remains competitive it would continue to be able to stand alone. The EU needs the UK far more than the UK needs the EU. To date, by standing outside the eurozone, Britain has become the only success story of Europe. As Tony Thirlwall argues 'It is the last refuge of the scoundrel to argue that one of the largest economies in the world ... cannot survive and prosper unless it surrenders its economic independence.'

With the loss of sovereignty that follows the loss of a currency, the move to a centralised state will accelerate. There are moves to a European Army under direct control of Brussels. Nato is not an appropriate comparison as this is under the direct control of the member states, albeit not under parliamentary control. Javier Solana is already pushing for Britain and France to lose their seats at the UN Security Council and these to be replaced by an EU seat. There are also moves for G8 seats to be replaced by a single EU seat to enable Europe to speak with one voice. Following the fall of Slobodan Milosevic, an EU Commissioner was speaking as though he was the Foreign Secretary of a sovereign state. The Nice Treaty will usher in a whole raft of Draconian measures unless member states start to fight back. At Nice, Blair and Cook are likely to concede the British veto in at least 17 key policy areas.

EU President Romano Prodi left no room for misunderstanding at a press conference five weeks before Nice:

Let's put it in very simple terms: it is basically eliminating the right of veto as much as possible - the right of veto is really a manacle chained to Europe.

And if member states were left in any doubt as to the areas Prodi was thinking of he spelled them out, social policy, asylum, immigration and taxation. Europe apologist Keith Vaz was forced to release a routine Foreign Office denial, the third in as many days to try and downplay various Superstate diktats emerging from Brussels, but no one was fooled.

Following hard on the heels of Prodi, German Foreign Minister Joschka Fischer, regarded as a grave embarrassment by all Greens, sketched out his vision of the European superstate to the Belgian parliament - elected European president, two chamber European parliament, and virtually no national vetoes. His Dante vision of hell was enthusiastically received.

There has been over the centuries a steady progress of people's rights, a transfer of power to ordinary people. People got the vote. Through the vote they were able to obtain collectivised resources: schools, hospitals, libraries, etc. Over the last twenty years or so we have seen a serious reversal of these trends. In Britain Margaret Thatcher was blamed but she was only following an international trend and in her own words 'you don't buck the markets.' Social services are under attack, individual liberties and freedoms are under attack, environmental legislation is being weakened, the rich are getting richer, the poor poorer. Underlying all these attacks, and getting richer and acquiring more rights in the process, are multinational companies. The EU, WTO are part of the tools they have at their disposal. The European project, the single currency are part of this trend.

Big Business could not easily abolish democracy within a country, though with New Labour it is having a jolly good try and in Brazil and Chile with CIA complicity it for a while succeeded. It is doing it by stealth, through the WTO and EU. The European project is portrayed as a modernising project, those who support it the modernisers. This is the same modernising tendency and social engineering that brought us high-rise flats in the 1960s, opportunities today for work at low wages in mind-numbing temporary jobs, Hitler's Germany and the Holocaust, Stalin's Soviet Union and the Gulags, the Cultural Revolution in China, Pol Pot's extermination of the middle and professional classes in Cambodia. The European project is rule by unelected, unaccountable technocrats out of touch with reality, George Orwell's Big Brother writ large.

When we vote in a general election we choose how we will be governed for the next few years, if we don't like what we get we can change it come the next election. But a vote on the euro, assuming we are trusted with the opportunity to vote, will determine how we are governed for the rest of our lives.

If Europe is to have any meaning at all it should be a loose grouping of independent states. Different states may well co-exist in different groupings. The Nordic countries (some of which are in, others are out), plus UK, could form a loose alliance. In common they have Common Law, decentralised decision making, cf centralised Roman Law. Anglo-Saxon countries have a political tradition of freedom under the law and political accountability which is currently under threat from Franco-German tyranny. Pollution knows no boundaries and is an obvious example for pooling sovereignty (we need international cooperation to combat global warming, we need the Scandinavians to oppose our dirty smokestacks and to stop us dumping radioactive material in the North Sea). What pooling sovereignty should not be about is erasing national, cultural and historical differences, forming a grey mass controlled by an autocratic centre.

When Julius Caesar landed up on these shores it was not to introduce us into a Roman Monetary Union, when William the Conqueror landed on these shores it was not to introduce a Frankish Monetary Union. In both case, a millennium apart, it was empire building, a grab for land, resources and power. A millennium later, we are once again seeing foreign invaders poised to seize control of the British Isles, with quislings willing to aid and abet for a seat at the Empire Court.

What we are seeing is a crude attempt to wrest power away from the people of Europe and their democratically elected parliaments and put that power into the hands of unelected, autocratic, unaccountable commissioners. The people of Europe are being turned into serfs in a new European Feudal Empire being constructed for Big Business. When the people realise their future enslavement, that the ballot box is a fraudulent farce, they will have no alternative than to turn to the streets.

Whilst the views and opinions are those of the author alone, the author has drawn in part on the presentations made at the Green Socialist conference (a progressive red/green alliance) Have The Danes Saved Our Bacon?, held at Conway Hall (Saturday 7 October 2000). The author is especially indebted to the discussions with Ole Krarup (Danish MEP), Caroline Lucas (British Green MEP) and the Rt Hon Tony Benn (British MP).