Sweden's No to the euro

international | miscellaneous | opinion/analysis Sunday September 21, 2003 20:41 by Anthony Coughlan

.

Dear Friends,
Swedish voters, one of the most educated and sophisticated in Europe, voted
No to the euro-currency last Sunday by 56% to 42%, with 2% blank ballots,on
a referendum turnout of 70%.

May I send you three items below relating to this,in the hope that they may
contain points to interest you.

The first is a statement that I made in Stockholm as one of a number of
international guests who were invited by the Swedish No-side to speak at
meetings on the eve of their referendum.

The second is a list of statements made by senior EU politicians over the
years, which show clearly that the euro-currency is primarily a political
rather than an economic project, designed to advance their aims of an EU
Superstate, in which the people of the various countries of Europe will
find that their national democracy and independence have been stolen from
them.

The third is an article carried in the July 2003 issue of "The European
Journal", London, on why it was a mistake for the Republic of Ireland to
abolish its national currency.

If you think that any of these items may be of interest to your friends or
acquaintances, please pass them on, without need of acknowledgement to this
source.

The Irish media has very much played down Sweden's No to the euro and its
likely long-term significance for this country. If you happen to know any
people in the media, it might be useful if you would raise this with them
in the public interest.


Yours faithfully

Anthony Coughlan

Senior Lecturer Emeritus in Social Policy
(Secretary,The National Platform)




______________________________________________________
ITEM 1: Statement on Sweden's No to the euro
_______________________________________________________


Sweden's No to the euro almost certainly means that this will never become
the currency of the EU AS A WHOLE, which is a huge defeat for the
world-power ambitions of the EU integrationists.

A No to the euro is not only in Sweden's interests but that of the rest of
Europe - indeed of democrats everywhere who understand one of the
fundamentals of economics (political economy): namely, that an independent
currency is a prerequisite of independence as a State and of the democratic
character of any country.


With Britain, Sweden and Denmark remaining outside the eurozone, several of
the new EU Accession States will assuredly join them and stay outside it
also, despite the commitments in their Accession Treaties. This means that
the EU will henceforth be divided into two groups of States so far as
currency and monetary policy are concerned.


That will leave Ireland - because of the folly of its uncritically
europhile politicians - tied to the bloc of undynamic EU countries with
which it does only one-third of its trade.


By contrast, the EU countries outside the eurozone remain free to adopt
either the interest rate or exchange rate that benefits the interests of
their own peoples, rather than what suits the European Central Bank in
Frankfort, the Governments of France/Germany and the Brussels Commission.



Sweden's No to the euro will be a victory for democracy and economic good
sense. People everywhere will congratulate the Swedes for seeing through
the lies and deception of their euro advocates, with their huge financial
and propaganda resources, and holding on to the essential economic basis of
independent Swedish statehood.


All independent states have their own currencies. All currencies belong to
independent states.


It is an absolute scandal that the "common position" of the EU 15 in their
Accession Treaties with the 12 EU Applicants should require the latter to
commit themselves to abolishing their national currencies - even though
Sweden, Denmark and Britain are not abolishing theirs.


When Poland, Hungary, Estonia, Romania etc. were client states of the USSR,
the Russians never insisted that they abolish their currencies and adopt
the rouble instead. Yet the EU 15, including "anti-imperialist" Ireland,
insist on their adopting the euro as a condition of admitting the 12
Applicant countries to the EU.


Few things shows more clearly the old-fashioned imperialistic ambitions of
the EU, dominated as it ever more obviously is by the state interests of
France/Germany, the economic interests of the EU-based transnational
corporations and the power-hunger of the Brussels bureaucracy, with its
claques of acolytes, clients and ideologues in every European country.



_____________________________________________________________

ITEM 2: WHAT EU POLITICAL LEADERS SAY THE EURO IS FOR

(The quotations below are in chronological order backwards)

___________________________________________________________


"When we build the euro - and with what a success - when we advance on the
European defence, with difficulties but with considerable progress, when we
build a European arrest-warrant,when we move towards creating a European
prosecutor, we are building something deeply federal, or a true union of
states."

-M.Pierre Moscovici,French Minister for Europe, Le Monde,28 February 2002

_________

"European monetary union has to be complemented by a political union - that
was always the presumption of Europeans including those who made active
politics before us. . .What we need to Europeanise is everything to do with
economic and financial policy. In this area we need much more, let's call
it co-ordination and co-operation to suit British feelings, than we had
before. That hangs together with the success of the euro."

- German Chancellor Gerhard Schröder, The Times, London, 22 February 2002

__________

"Defence is the hard core of sovereignty. Now we have a single currency,
then why should we not have a common defence one day?"

- Spanish Defence Minister Federico Trillo, European Parliament Committee
on Foreign Affairs, 19 February 2002

________

"The EU ought to develop into a great power in order that it may function
as a fully fledged actor in the world."

- Paavo Lipponen, Prime Minister of Finland, London, 14 February 2002

________


"It (the introduction of the euro) is not economic at all.It is a
completely political step . . .The historical significance of the euro is
to construct a bipolar economy in the world. The two poles are the dollar
and the euro. This is the political meaning of the single European
currency. It is a step beyond which there will be others. The euro is just
an antipasto."

- Commission President Romano Prodi, interview on CNN, 1 January 2002

__________

"The currency union will fall apart if we don't follow through with the
consequences of such a union. I am convinced we will need a common tax
system."

- German Finance Minister Hans Eichel,The Sunday Times, London, 23 December
2001


__________

"Are we all clear that we want to build something that can aspire to be a
world power? In other words, not just a trading bloc but a political
entity. Do we realise that our nation states, taken individually, would
find it far more difficult to assert their existence and their identity on
the world stage."

- Commission President Romano Prodi, European Parliament, 13 February 2001

___________

- "Thanks to the euro, our pockets will soon hold solid evidence of a
European identity. We need to build on this, and make the euro more than a
currency and Europe more than a territory . . . In the next six months, we
will talk a lot about political union, and rightly so. Political union is
inseparable from economic union. Stronger growth and European integration
are related issues. In both areas we will take concrete steps forward."

- French Finance Minister Laurent Fabius, The Financial Times, London, 24
July 2000

___________


"We already have a federation. The 11,soon to be 12, member States adopting
the euro have already given up part of their sovereignty, monetary
sovereignty,and formed a monetary union, and that is the first step towards
a federation."

- German Foreign Minister Joschka Fischer, Financial Times, 7 July 2000,

___________


"Common responsibility for the European currency will also engender a
common decision-making instance for the European economy. It is unthinkable
to have a European central bank but not a common leadership for the
European economy. If there is no counterweight to the ECB in European
economy policy, then we will be left with the incomplete construction which
we have today . . . However even if the building is not finished it is
still true that monetary union is part of a supranational constitution . .
It is our task for the future to work with the appropriate means for the
transfer of traditional elements of national sovereignty to the European
level."

- Italian President Carlo Ciampi, Frankfurter Allgemeine Zeitung,8 Feb.2000

___________


"We must now face the difficult task of moving towards a single economy, a
single political entity . . . For the first time since the fall of the
Roman Empire we have the opportunity to unite Europe."

- EU Commission President Romano Prodi, European Parliament,13 October 1999

__________

"The euro was not just a bankers' decisIon or a technical decision. It was
a decision which completely changed the nature of the nation states. The
pillars of the nation state are the sword and the currency, and we changed
that. The euro decision changed the concept of the nation state and we have
to go beyond that."

- EU Commission President Romano Prodi, Financial Times interview, 9 April 1999

____________


"The introduction of the euro is probably the most important integrating
step since the beginning of the unification process. It is certain that the
times of individual national efforts regarding employment policies, social
and tax policies are definitely over. This will require to finally bury
some erroneous ideas of national sovereignty. . . I am convinced our
standing in the world regarding foreign trade and international finance
policies will sooner or later force a Common Foreign and Security Polic
worthy of its name. . . National sovereignty in foreign and security policy
will soon prove itself to be a product of the imagination."

- German Chancellor Gerhard Schröder on 'New Foundations for European
Integration', The Hague, 19 Jan.1999

____________


"Our future begins on January 1 1999. The euro is Europe's key to the 21st
century. The era of solo national fiscal and economic policy is over."

- German Chancellor Gerhard Schröder,31 December 1998

___________


"The euro is a sickly premature infant, the result of an over-hasty
monetary union."

- German Opposition leader Gerhard Schröder, Bild, 25 March 1998.


___________

"The euro is far more than a medium of exchange. . .It is part of the
identity of a people. It reflects what they have in common now and in the
future."

- European Central Bank Governor Wim Duisenberg, December 31 1998

__________



"Transforming the European Union into a single State with one army, one
constitution and one foreign policy is the critical challenge of the age,
German Foreign Minister Joschka Fischer said yesterday."

- The Guardian, London, 26 November 1998

____________


"The single currency is the greatest abandonment of sovereignty since the
foundation of the European Community . . . It is a decision of an
essentially political character. . . We need this united Europe . . .We
must never forget that the euro is an instrument for this project."

- Spanish Prime Minister Felipe Gonzalez, May 1998

__________

"Federalism might make eurosceptics laugh but, with the creation of the
euro,the halfway stage would be reached. Four key organisms would have a
federal or quasi-federal status: the Central Bank, the Court of Justice,
the Commission and the Parliament. Only one institution is missing: a
federal government."

- M.Jacques Lang, Foreign Affairs Spokesman, French National Assembly, The
Guardian, London, 22 July 1997

____________

"As a monetary union represents a lasting commitment to integration which
encroaches on the core area of national sovereignty, the EMU participants
must also be prepared to take further steps towards a more comprehensive
political union."

- Annual Report of the German Bundesbank 1995

_________

"In Maastricht we laid the foundation-stone for the completion of the
European Union. The European Union Treaty introduces a new and decisive
stage in the process of European union, which within a few years will lead
to the creation of what the founding fathers dreamed of after the last war:
the United States of Europe."

- German Chancellor Helmut Kohl, April 1992

________

"There is no example in history of a lasting monetary union that was not
linked to one State."

- 0tmar Issing, Chief Economist, German Bundesbank, 1991

__________

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

- Bundesbank President Hans Tietmeyer, 1991

_________

"We argue about fish, about potatoes, about milk, on the periphery. But
what is Europe really for? Because the countries of Europe, none of them
anything but second-rate powers by themselves, can, if they get together,
be a power in the world, an economic power, a power in foreign policy, a
power in defence equal to either of the superpowers. We are in the position
of the Greek city states: they fought one another and they fell victim to
Alexander the Great and then to the Romans. Europe united could still, by
not haggling about the size of lorries but by having a single foreign
policy, a single defence policy and a single economic policy, be equal to
the great superpowers."

- Prime Minister Harold Macmillan, who initiated the UK's application to
join the EEC, The Listener, London, 8 Feb.1979

__________


"The fusion (of economic functions) would compel nations to fuse their
sovereignty into that of a single European State."

- Jean Monnet, founder of the European Movement, 3 April 1952

_________


"I have always found the word 'Europe' on the lips of those who wanted
something from others which they dared not demand in their own names."

-German Chancellor Otto von Bismarck,1880



___________________________________________________________________


ITEM 3: WHY JOINING THE EURO HAS BEEN A MISTAKE FOR THE REPUBLIC OF
IRELAND. (European Journal article, July 2003)

____________________________




THE EURO'S PURPOSE IS ESSENTIALLY POLITICAL. ONE OF ITS OBJECTIVES IS TO
MAKE PEOPLE FEEL MEMBERS OF A NEW COUNTRY CALLED "EUROPE."

This political purpose is probably more important than the economic. "We
need this united Europe. . .We must never forget that the euro is an
instrument of this project," said Spanish Prime Minister Felipe Gonzalez
on the eve of the locking the eurozone exchange together in 1998. "The
two pillars of the Nation State are the sword and the currency,and we
changed that," wrote EU Commission President Romano Prodi in the Financial
Times.



THE REPUBLIC OF IRELAND DOES TWO-THIRDS OF ITS TRADE OUTSIDE THE EUROZONE.

The average for the other 11 continental eurozone countries is some 15%.
Basically Ireland does one-third of its trade - that is, exports and
imports combined - with the eurozone, one-third with the United Kingdom,
and one-third with the USA and the rest of the world. We get 75% of our
imports from outside the eurozone and send 60% of our exports to countries
outside it.(Year 2000 figures) The USA and Britain, both outside the
eurozone, are the Republic's two biggest and strongest markets, whereas the
continental eurozone market has stagnated for years. Irish Deputy Prime
Minister Mary Harney was telling the truth when she said the other year
that, in trade terms, Dublin is closer to Boston than Berlin. But she did
not act on what she said. By signing us up for the eurozone the
politicians of the main Irish political parties decided to tie the
Republic's currency, in principle for all future time, with countries with
which it does only one-third of its trade. Meanwhile the countries with
which we do the remaining two-thirds retain the freedom to pursue their own
exchange rate and interest rate policies and to use these essential policy
instruments of any sovereign government to boost their economic
competitiveness if necessary, powers that Ireland's politicians have
blithely and recklessly abandoned.



THE EURO ERODES THE BASIS OF THE "CELTIC TIGER" ECONOMY AND THE 1993-2001
IRISH ECONOMIC BOOM

The intelligent use of an independent currency is the principal single
reason for the Irish economic boom, which has attracted international
attention in recent years. The key question regarding the "Celtic Tiger"
is why did the Republic's annual rate of economic growth, which averaged
3-4% a year during the 1970s and 1980s, double to 7-8% in 1993-4 and remain
doubled from then until 2001? The principal reason is that the years
1993-99 were the only period in the history of the Irish State that it
pursued an independent currency policy and allowed the exchange rate to
float, following our 1993 devaluation. The Irish economy took off on the
back of the resulting highly competitive exchange rate. The Irish púnt
depreciated in value from 110 pence sterling in January 1993 to 77 pence
sterling in 2001. It devalued heavily also against the dollar. This boosted
exports to the US and UK, Ireland's two principal markets, and reduced
competitive imports from these countries. Output and domestic demand grew
correspondigly. In the light of that it was folly for Ireland's
uncritically europhile politicians to agree to abandon our independent
national currency and hand over control of our exchange rate, in principle
for ever, to the European Central Bank in Frankfort. The unexpected
weakness of the euro vis-à-vis the dollar since the Republic joined the
eurozone in 1999 has added to Irish competitiveness in that time; but that
will not last. Now it is the EU and the European Central Bank, not the
Irish Government or Irish Central Bank, which decides Ireland's exchange
rate - naturally in the interest primarily of Germany and France, which
contain half the eurozone's population, rather than Ireland, which has only
1%.




THE SHORT-TERM COSTS OF INTRODUCING THE EURO ARE SIGNIFICANT

Personal inconvenience occurs as people have to learn a whole new scale of
money values for goods, services and property Š Shopping staff feel
harrassed during the two-month changeoverŠ Consumers were ripped off
rip-off as retailers rounded prices upward instead of downward Š Cash
dispensing machines, taxi-meters etc. had to be be altered at a cost of
millions Š All costs that must inevitably be passed on to consumers.




THE ECONOMIC ADVANTAGES OF BEING ABLE TO TRAVEL WITHIN THE EUROZONE WITHOUT
HAVING TO CHANGE CURRENCY, AND BEING ABLE TO COMPARE PRICES MORE EASILY
BETWEEN EUROZONE COUNTRIES, ARE SMALL COMPARED TO THE ECONOMIC
DISADVANTAGES.


People may be on holiday in other eurozone countries for 2/3 weeks a
year,but they could be working for the remaining 48/49 in an economy that
is burdened by an unsuitable exchange rate, with consequent
uncompetitiveness, unemployment, inflation or low economic growth. That was
very much Ireland's 19th century experience, when it shared a single
currency with Britain as part of the United Kingdom, then the "workshop of
the world," while Ireland, apart from its North-East corner, was reduced to
an agricultural backwater.




THE RIGIDITY OF ONE-SIZE-FITS-ALL INTEREST RATES INSIDE THE EUROZONE DOES
NOT SUIT IRELAND OR OTHER SMALL ECONOMIES


It makes no economic sense to have the same money, and hence the same
interest rate and exchange rate, for the economies of 12 eurozone
countries, some of which are significantly different from others. Thus
Germany, the largest EU country, is now in recession and has nearly 5
million unemployed. Germany needs low interest rates to encourage
investment and consumption and stimulate its economy. Ireland has had an
8-year boom. We need higher interest rates to prevent inflation and bring
down house prices. But ECB interest rate policy is geared to what suits
Germany, not Ireland. The result is that at present we have unsuitably
lower interest rates than we would have if we had kept the Irish pound and
the Irish Central Bank were still able to give priority to the needs and
circumstances of the Irish economy. Hence we see people in the Irish
Republic borrowing as if there were no tomorrow, massive credit
expansion, interest rates since 1999 that have pushed soaring house prices
higher still, an Irish inflation rate that is nearly treble the EU average
and positive disincentives to savers and saving. Yet at any one time
savers and pensioners, who want higher interest rates, outnumber borrowers,
who want lower ones. In a few years time things may be reversed. Ireland
may need looser credit, while Germany needtighter. But in the eurozone it
will again be Franco-German interests, not Ireland's, that will determine
ECB interest-rate policy.



THE EUROPEAN CENTRAL BANK, WHICH DECIDES INTEREST RATES IN THE EUROZONE, IS
NOT SUBJECT TO ANY DEMOCRATIC CONTROL.

Article 107 of the Maastricht Treaty states that the ECB shall not seek or
take instructions from any national Government or from any European
institution. By signing us up to the euro our politicians have put us under
the economic control of a group of independent, irremoveable, non-elected
central bankers in Frankfort for the indefinite future.




THE MAASTRICHT TREATY REQUIRES THE ECB TO FOLLOW AN INTEREST RATE POLICY
THAT HAS AN INHERENTLY DEFLATIONARY, ANTI-EXPANSIONARY ECONOMIC BIAS FOR
THE MEMBER STATES OF EUROLAND

It is pointless to criticise the ECB for this. The euro-bankers are only
carrying out their Treaty obligations by insisting on it. Their sole duty
under the Maastricht Treaty is to keep inflation low in the eurozone
overall. This
inhibits economic expansion, discourages employment and makes the 12
countries of the eurozone a low-growth area compared to the USA. The Treaty
does not require the ECB to adopt policies that would encourage economic
growth, expansion of output and employment, or reduction of economic
imbalances between different eurozone regions or countries.



ADOPTING THE EURO MEANS ABANDONING THE ECONOMIC "SAFETY-VALVES" OF AN
INTEREST RATE AND EXCHANGE RATE POLICY THAT IS IN THE NATIONAL INTEREST.

A national currency is essential for every independent democratic State
because it enables its government to control or influence its rate of
interest or exchange rate in a manner that can serve the interests of its
own citizens. Article 45 of the Irish Constitution lays down as one of the
key principles of good public policy: "That in what pertains to the control
of credit the constant and predominant aim shall be the welfare of the
people as a whole." This is now impossible with the euro, for control of
credit in the Irish economy has been shifted from the Irish to the European
Central Bank. The interest rate is the domestic price of a currency. The
exchange rate is its price for citizens of other countries. The latter
governs the terms on which a country exchanges goods and services with its
trading partners. By altering its currency exchange rate a country can
affect the competitiveness of its trade with others. If a country has an
unsuitable exchange rate for a long period, as Ireland had during the 19th
and early 20th centuries, it can suffer a permanent competitive
disadvantage, resulting in low growth, unemployment and emigration. Without
the safety valve of either the interest rate or the exchange rate, national
economies are also more vulnerable to economic shocks that may affect them
more than others, such as an energy crisis. Or different countries may
require significantly different interest rates because they have housing
systems reliant to varying degrees on variable rather than fixed-interest
mortages, or retirement pension systems more reliant on funded than
unfunded pension schemes.



MEMBERSHIP OF THE EUROZONE REQUIRES FLEXIBILITY IN WAGES, MIGRATION OR
EMPLOYMENT, IF NATIONAL POLICY FLEXIBILITY AS REGARDS INTEREST RATES AND
EXCHANGE RATES IS RULED OUT. . . AND MOST PEOPLE ARE NOT PREPARED FOR THAT.


With the safety valves of interest rate and exchange rate changes
abandoned, the only economic policy flexibility still left to governments
in the eurozone is their ability to vary taxes and public spending. The
Stability and Growth Pact which accompanied the Maastricht Treaty seeks to
limit this as well. This Pact licenses the EU to impose heavy fines on
eurozone States that run budget deficits greater than 3% of their GDPs.
Such deficits may be the only way to counter an economic recession like the
present one, which calls for higher public spending at a time of falling
tax revenue for governments. The EU's clearly stated ambition to obtain the
power to "harmonise" national taxes inside the eurozone, if successful,
would eliminate the ability of national governments to adopt virtually any
independent measure to advance their people's economic welfare. With
policy flexibility hugely reduced for eurozone member governments, the only
response possible for people in an economic recession would be flexibility
through wage-cuts and profit-cuts, or else workers and businesses having to
choose between unemployment at home or migration of labour and capital
abroad, as they move from poorer to richer countries or regions inside the
eurozone.



WHY THE EURO CANNOT LAST. . .THE PROBLEM OF THE EUROZONE BEING A MONETARY,
NOT A FISCAL, UNION, AND THE ABSENCE OF THE NECESSARY SOLIDARITY TO
UNDERPIN THE LATTER


"There is no example in history of a lasting monetary union that was not
linked with one State," said Otmar Issing, German governor of the European
Central Bank. History is full of examples of abandoned currency unions.
Where now is the Austro-Hungarian taler, the USSR rouble, the Czechoslovak
crown, the Yugoslav dinar? Yet these currencies belonged to real States,
multinational political unions that were also fiscal unions, bound together
by common taxes and services, which is something the EU is not and never
can be. All sovereign States are fiscal as well as monetary unions. They
have common taxes and public services throughout their territories, which
means that their poorer areas and regions pay on average lower taxes and
receive more public services than their richer areas and regions. These
expressions of national solidarity mean that resource transfers from richer
regions within a country compensate poorer regions to some extent for the
drawback of their not having their own currency, interest rate and exchange
rate, with which to balance their payments with the rest of the national
economy. Despite this poorer areas suffer from migration of capital and
labour to richer areas, but less than would happen in the absence of these
national transfers.


There is no such solidarity at EU level, however, whereby richer EU
countries are willing to compensate poorer ones for loss of key economic
powers. Of course some international solidarities exist between EU members,
but nothing that compares to the solidarity which binds national states
together and makes their citizens willing to pay taxes to a common
government because it is THEIR government, with the authority and
legitimacy deriving from that. EU monetary union is not a fiscal union.
Taxes and public spending are overwhelmingly national in the EU, and likely
to remain so. Brussels funds amount to a mere 1.3% of the EU's annual gross
product, whereas national taxes and spending typically amount to 35% or
more of national products. There is thus no realistic likelihood of the
richer EU countries being willing to pay vastly greater sums to Brussels in
the name of a common "Europeanism," to compensate the poorer EU countries
for surrendering their ability to use exchange rate and interest rate
policy to balance their national payments. The only way countries
threatened with such imbalance can do this inside the eurozone is by
accepting lower wages and profit rates compared to their competitors, or,
if people are not prepared to do that, remaining unemployed at home or
emigrating abroad. The EU does not
have the solidarity that marks a nation or people. There is no EU "demos,"
no EU national community with which citizens identify and for which in some
circumstances they are willing to die. Rather there are the EU's many
nations and peoples.


This is the fundamental reason why the single currency is bound to generate
tensions and antagonisms between different EU countries in the eurozone, as
the common interest and exchange rates that suit some do not suit others,
and people gradually realise that their governments have surrendered key
policy instruments for advancing the national welfare. For this reason the
euro project is doomed to fail, although it could last years or even
decades as the rouble and thaler did, while generating policy conflicts and
significant international tension while it does last. The euro is likely to
make the national question, the right of nations and peoples to self-rule
and self-determination, the principal issue of EU politics for years to
come. This will happen as countries which in the past possessed empires and
which through them suppressed the national independence of others, discover
the drawbacks of being ruled by foreigners, that is, by people they do not
elect and who are not responsible to them.




WILL THE EURO COUNTER GLOBALISATION?

The euro is a key instrument for eroding national defences against the
dangerous effects of economic globalisation, which transmit downturns in
some major economies rapidly to others. Free movement of capital is the
locomotive of globalisation. Article 56 of the EC Treaty forbids all
restrictions on the movement of capital either within the EU or between the
EU and the rest of the world. The Maastricht Treaty is a constitution for
undemocratic rule by Central Bankers. It is a freedom charter for private
capital, whereas democrats have always sought to impose some rules and
social controls on capital, to tame "the furies of private interest"
through the only instrument that history has evolved for that purpose,
namely independent national States that are responsive to democratic
electorates.



IS THE EURO A PEACE PROJECT, AIMED AT ENDING CONFLICT IN EUROPE?

There is no evidence to suggest this. A common currency is no guarantee of
national cohesion or peace. The USSR and Yugoslavia broke apart, despite
having common currencies in the rouble and the dinar. There are still
conflicts in Chechnya, Kosovo, Macedonia. When Czechoslovakia divided, a
common currency was kept for some time, but it did not work and two
currencies were instituted for the Czech and Slovak Republics. In 1999, the
year the euro was established, there were 25 wars waging in the world, 24
of them in countries with a common currency. Between 1989 and 1999 there
were 108 armed conflicts in the world, 101 of them within States that had a
common currency. Three-quarters of these conflicts took place within
democratic States or States with democratic forms, such as India(Kashmir),
Algeria(Islamic guerillas), Morocco(Western Sahara), the
UK(Northern Ireland), Spain(the Basque country), Turkey(Kurdistan). The
euro will bring an end to war in Europe, say the eurofanatics. Have they
ever heard of civil wars?



WILL CURRENCY SPECULATION DECREASE WITH A BIG CURRENCY LIKE THE EURO?


There are numerous examples where big currencies like the dollar, the pound
sterling, the yen and the deutschemark have fluctuated markedly within
short periods of time in response to supply and demand for them. If
currency exchange rates are fixed for political reasons - which is
virtually always the motive for doing this - then the real economy of
people engaged in making and exchanging things must fluctuate to fit in
with the exchange rate, rather than the exchange rate fluctuating to
accommodate the real economy. Globalisation does not eliminate small
currencies. The number of new currencies increases all the time as new
States come into being. The number of States in the world has trebled from
some 60 in 1945 to around 200 now. So has the number of currencies. The
number of States - and currencies - in Europe went from 34 in 1989 to 50
ten years later. There is no relation between the size of a State or its
population and the strength of its currency, its economic prosperity or
level of income per head. Some of the smallest countries in the world are
the richest - e.g. Norway, Switzerland, Singapore - and some of the biggest
are the poorest. This matter has nothing to do with size of currency.



________________________________________