News Archive

The Euro, a few points to contemplate

Posted on Thursday, March 13, 2003

Andre Wilkinson, National Treasurer, reflects on the disastrous consequences of the euro. Andre has also just retuned form a tour of Malta as guest of the General Workers’ Union to participate in their debates about the future of Malta in or out of the EU. Television and radio news programmes seem at this present moment in time obsessed with presenting public opinion on all sorts of issues. This is dominated by the question of whether or not we should join the USA in the mass slaughter of tens or even hundreds of thousands of innocent Iraqi civilians. Whilst I totally agree that issues of war, international terrorism, etc. are in fact newsworthy and important to us all, there is also another very significant debate which seems to have been left behind by much of the mass news media. That is the issues of the Euro and whether the United Kingdom should or should not enter. In many respects our entry into the Euro would have a much greater long term bearing on each and every British worker than would any war with Iraq. The Euro came into being at the beginning of 1999 when the currencies of constituent countries were locked together. By the Spring of 2002 those constituent countries relinquished their own paper and coin currencies and replaced them with Euro notes and coins. The Euro zone was born. Those countries at that time changed for ever and their workers started to grapple with many new issues and changes that occurred. These issues encompassed questions of democracy, economics, sovereignty, employment, exchange rates, public services and much more. For Britain to join the Euro zone we must satisfy a number of convergence criteria, we must pass the test in a number of areas. We are already seeing the effect of moving towards meeting these criteria. The purse strings of public spending are being tightened, the private finance initiative is gaining momentum. We are already schools and hospitals being built and run by private sector companies for profit. How long is it before we see youth centres and community centres going the same way? Gearing up for entry is already having an impact on the salaries paid to public sector workers, and that includes us. It is no coincidence that many public service sectors have seen their trade unions engaging in industrial action over recent pay awards, action that mirrors the much greater public sector disquiet in Belgium, Germany and France in the late 1990s. Quite simply if the Government paid the rises the public sector deserves we would not meet the convergence criteria. This has become worse for workers in countries that have entered the Europe zone. The Euro economy and the European Central Bank is totally preoccupied with controlling inflation, a kickback to the Maastricht Treaty and fears at the time following the boom and bust of the 1970s. Policies within the Zone reflect this. Many workers complained about the inflationary prices as their nations switched to the Euro, but pay rises did not compensate for this. Unemployment has risen and remains high across the Zone. In September 2002 the Labour Euro-Safeguards Campaign reported that it was 8.4% across the Zone with Germany, France and Spain suffering particularly badly. At the same time British unemployment levels were riding at about 5%. Do we want to see unemployment start to rise again perhaps to levels seen during the Thatcher regime? The unelected and undemocratic European Central Bank controls interest rates across the Zone. If the United Kingdom were to join they would set ours also. The effect of this on different member states has varied. Worrying though must be the experience of countries such as Eire and Portugal where interest rates were suddenly reduced to an unsustainable low level which resulted in an initial "boom", this rapidly followed by "bust". What would happen to us if the Bank of England relinquishes it's already undemocratic right to control the base rate to the ECB. How do you feel about those same undemocratically appointed bankers controlling your ability to purchase a property or your ability to pay off your mortgage or other loans? I have heard that having a fixed exchange rate is positive, and have even seen the benefit of it myself when flitting between the French and Spanish borders. This one benefit is that price comparison is easy. In reality having a fixed exchange rate could have a massive impact on jobs, imports and exports. Britain needs its goods to be competitively priced to encourage export and to support manufacturing industry. Entering the Euro zone would mean that Britain would have to accept the exchange rate of the rest of the zone regardless of how this would impact upon export, manufacturing industry and jobs. In my opinion much of the above suggests that regardless of any rhetoric or spin, Blair is preparing us for an earlier rather than later entry into the Euro. I believe if we do it will have catastrophic consequences for this Country, for our public services and for our workers. We must be clear, "No to War", but also "No to the Euro". We must get the issue of entry back into the public agenda. If not I fear we will slip gently into the Zone without even realising it until it's too late.

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