Labour Euro-Safeguards Campaign - Bulletin January 2005


QUESTIONS AND ANSWERS ON THE EURO AND THE PROPOSED EU CONSTITUTION

  1. What do British opinion polls show about support for the euro and the proposed new EU Constitution?

    Opinion polling on the euro goes back much further than surveys on the Constitution, because proposals for the Single Currency go back to the early 1990s whereas the Constitution only materialised over the last year or two. The British electorate has been hostile to the euro ever since the UK left the ERM in 1992. Opposition levels have fluctuated but have done so consistently around ratios of roughly two to one against joining. British attitudes to the new Constitution have followed the same path, with similar opposition percentages being maintained, although there is some evidence that the public are less sure of their position on the Constitution than the euro. Even the most ardent Europhiles, however, recognise that they have a severe uphill struggle on their hands to persuade the British electorate to support the new Constitution when the promised referendum is held.

  2. Why is the idea of joining the Single Currency so unpopular in Britain?

    For many people in Britain, joining the Single Currency has never been acceptable because of the loss of self government that would be entailed by our giving up the right to have our democratically elected government deciding how our economic affairs should be organised. For those less persuaded by such arguments of principle, though reinforcing the views of those who think they are crucial, practical experience has been equally effective in confirming opposition amongst the electorate against joining the euro. Unemployment in the euro-zone is far higher there than it is in Britain, still hovering round 10% according to official figures which, by common consent, underestimate the true level of joblessness by around one third. By contrast, the UK's rate of unemployment, measured in the same way, is currently 4.6%. The growth rate in the EU is the slowest in the developed world, as it has been for the last quarter of a century, much of this poor performance being caused by the deflationary policies used to underpin previous misguided efforts to lock EU currencies together. Inflation is relatively high and the euro is clearly grossly over-valued. At the same time, as a result of the narrow anti-inflationary remit of the European Central Bank and the deflationary impact of the Stability and Growth Pact, those responsible for the management of the euro economies show no sign of having solutions to these problems. No wonder most people prefer the present government's pragmatic and flexible approach and have no wish to see us having to abandon it if we ever were to join the euro.

  3. Why are the British so reluctant to accept the proposed new EU Constitution?

    Even with their suspicions about the EU already aroused by the euro and other matters, a majority of people in Britain might still have been willing to accept new constitutional arrangements for the EU which reduced central control, which returned to EU Member States powers best exercised at national level, and which made EU governance more genuinely democratic. It is crystal clear, however, that none of these changes is on offer. Instead, the new Constitution entails further centralisation, increased power to Brussels and even less effective electoral control over those in positions of power in the EU. Furthermore, as almost all politicians on the Continent readily admit, the new Constitution is a further major step towards the construction of a European state, modelled on forms of governance very different to those on which British law and traditions are based. These developments are exactly the opposite to those which most British people would like to see happening.

  4. What is likely to happen to the EU Constitution referendum in the UK?

    It is clear that the government are well aware of the difficulties they are like to have in trying to win a referendum on the Constitution. As a result, they are putting off the time when it is due to be held for as long as possible, no doubt in the hope that, in the meantime, some other countries in the EU will hold referendums which are lost. If this were to happen, there might then be significant changes to the proposed Constitution which made it more acceptable in the UK, or its introduction might be postponed for long enough to give the government a further lengthy breathing space. There is, however, a deadline in place. If a referendum is to be held - and all the major parties are committed to this happening before the Constitution can be accepted in the UK - it has to be held by the autumn of 2006.

  5. What is the likely outcome of referendums in other EU Member States?

    The probable outcome of referendums on the Constitution in other EU countries is thus of very substantial significance to the way matters are likely to develop in the UK. At present eight EU Member States are committed to holding referendums. The polls indicate luke-warm support in many of them but it now begins to look as if the level of opposition in nearly all of them may not be sufficient to withstand the barrage of propaganda in favour of the new Constitution to which, no doubt, they will be subjected. If only one or two countries vote against adoption of the Constitution, especially if they are either relatively small or newcomers to the EU or both, the remainder of the EU Member States are likely to regard this as a set-back which they can ignore. The prospect is thus looming up of Britain being the only major country in the EU which is not prepared to accept the new Constitution.

  6. What would be in store if Britain is the only major country which does not accept the new EU Constitution?

    If this were to happen, the EU would be presented with a major dilemma. If every other Member State, with, at most, only one or two relatively minor dissenters, wanted to go ahead with implementing the Constitution but Britain, declined to do so, especially by so large a majority that the reversal of such a vote by any subsequent referendum looked impossible, the pressure to go ahead while leaving Britain out might well be irresistible. This would not necessarily leave Britain outside the EU structures altogether but it could provide a major opportunity for the UK to renegotiate for itself a new and different status which should be much more in line with what most people in Britain would like to see happen.

  7. Where would this leave Britain?

    Essentially this would move the UK towards a looser relationship with the other EU Member States while leaving room for making common cause with them wherever this made sense. Inevitably, we would then lose a large part of our now relatively limited capacity to influence from the inside the way the EU develops. The compensating advantages from being freed from the many downsides of EU membership would, however, be substantial. Because of World Trade Organisation obligations and because the other EU Member States sell more to us than we to them, we should have no difficulty in maintaining our free trade agreements with them. We would certainly want to abandon our membership of the Common Agricultural Policy, and to regain control of our fisheries. Our large net contribution to the EU budget would diminish to being a small subscription to deal with the administration of matters of common interest. We could regain our ability to negotiate our own trade arrangements and to deal with sensitive issues such as immigration as we thought fit. We could adopt our own diplomatic and military policies, co-operating with other countries as it suited us. We could make our own decisions about how to run our economy, unconstrained by floods of directives from Brussels, many of which most people in Britain do not welcome. Of course, we would also still be in a position to work with other countries on all matters of common interest, such as organised crime, drugs, environmental considerations and many other issues.

  8. Is this really likely to happen?

    Predicting the future is always fraught with difficulties. Unexpected developments can always occur which will derail projections however well founded they may sound at the time they are made. This is not an argument, however, for failing to look ahead to see what is looming up as an increasingly conceivable scenario and then considering how best to respond to the opportunities and difficulties which might then be encountered. It may indeed be the case that an opportunity is in the offing which could achieve an unexpected measure of consent. Far from being seen as a dangerous and risky step into the unknown, the outcome may instead be seen as being a welcome move towards establishing what most people in Britain have always wanted our relationships with other European countries to be.

  9. Is this the opportunity for which many in Britain have been looking?

    While an abrupt and acrimonious severing of our links with the other EU Member States has never been an attractive political prospect, an orderly readjustment of our relationship with them by mutual consent is much more appealing. We would then be in a much stronger position to obtain the best of all worlds - living in peace and friendship with our neighbouring countries, co-operating and working with them whenever it was perceived to be in everyone's mutual interest to do so, while not being constrained to adopt policies and economic burdens which are not of our choosing. While wishing the EU and its Member States all success, we would be free to continue with our legal traditions and our way of running our economy, while maintaining our many friendships with countries in other parts of the world, and our ways of holding our rulers to account. In the end, it may be that the democratic dimension to the new arrangements which will have to be put in place will be the most significant of all in the long term. Perhaps the most fundamental reason why there is so much opposition to both the Single Currency and the Constitution in the UK is that the British people clearly believe that both of them involve our losing control of the kind of future we want for our country if we were to adopt them. If we do not do so, we do not need to part on bad terms from the rest of the EU, any more than has been the case with Norway or Switzerland. On the contrary, at last we would have the opportunity to develop much more genuinely cordial relations with them, founded on the many real interests we have in common. This is surely a better prospect than being dragged as an unwilling partner along a road which we do not really want to travel at all.

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