Its first 100 days were rocky, but the euro's in rude health

The pro-pounders are in the main elderly men with more stake in their past than in our future
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COULD THERE have been a more turbulent first 100 days for the euro? The period since its euphoric launch amid Beethoven and balloons on New Year's Day started with a damaging public row over interest rates between the brash German finance minister and the dull Dutch banker running the new European Central Bank. It moved on to the resignation first of said finance minister, Oskar Lafontaine, then the entire European Commission, washed out of office on a tide of sleaze. And just three months after the single currency's birth, war started on the eastern border of Euroland.

No wonder Britain's save-the-pounders are feeling so chipper. The new currency has been declining pretty steadily on the foreign exchanges, and has lost 5 per cent of its value against the pound. But the motley collection of assorted Lords and Rupert Murdoch-employees gleeful at all this extra ammunition for their campaign against Britain joining the euro are guilty of bending the facts and trivialising the national debate we ought to be having.

Start with that decline in the value of the euro on the foreign exchanges. It is tiny, as currency movements go. In just eight weeks last summer the pound fell more than 7 per cent against other currencies, and is still 4 per cent below the level it reached in August. During that entire period of decline British industrialists - the anti-euro camp more vociferously than most- continued to complain about the strength of the pound.

And they are still complaining. They acclaim the euro's weakness as a sign of the innate weaknesses of the Continental economy. At the same time, they grumble that its fall is undermining the ability of British business to sell profitably into European markets. These people want to have their brioche and eat it too.

Nor do they speak for the full breadth of British business. A poll conducted by ICM for Business for Sterling, which supposedly showed a 59 per cent majority against UK membership of the euro, turned out to have adjusted the replies in a way which - surprise, surprise - turned a raw pro-euro majority into a "weighted" majority for the antis.

This is an odd approach to campaigning - rigging the result to show that you have already achieved the victory over public opinion you are supposed to be aiming for. The truth is that British business, like the British people, is split on the subject, probably mildly sceptical on balance but open to discussion. What a pity they have been so ill-served by politicians and commentators.

It has not helped elevate the level of debate that all the running has been made by the anti-euro groups like Business for Sterling and Lord Owen's New Europe. These outfits, funded by privately wealthy men and, in the case of New Europe, Mr Murdoch, have more money than the Britain in Europe coalition on the opposite side. The pro-euro campaign has also remained too low-key, postponing its formal launch until Ken Clarke and Michael Heseltine can swing their weight behind it after the European elections.

The delay will turn out to have been a mistake, and not just because it will allow the anti-euro groups to set the terms of the debate. For the main distinction between the two camps is the narrowness of interests represented by the antis compared to the diversity of those who remain open to the idea of Britain playing a central role in Europe.

The defenders of sterling are, in the main, a group of elderly men with more stake in their past than in our future. They clothe their gut anti- Europeanism and Little Englandism in the language of rational economic argument. Many actually believe Britain ought to withdraw from the EU altogether, but have just enough nous to realise this is not a referendum winner.

Among younger people who are not part of the Establishment, there is a good deal of pro-European sentiment. Few people born in the baby-boom generation or later are purely nationalistic. We have travelled abroad for holidays and business, not just to fight other Europeans. In our millions we have enjoyed the beaches of the Costa Brava and the hills of Tuscany, watched football in France, been skiing in the Alps, held meetings with colleagues in Frankfurt, and danced in Dublin's nightclubs. While we still laugh at jokes about German holidaymakers and Italian drivers, it is no longer a bitter humour.

For all those whose instincts are to be part of Europe, not separate from it, there are many clear signals that staying out of the single currency has already undermined Britain's influence. To take just the latest, in his interview with the Financial Times this week, Romano Prodi, the President-designate of the European Commission, was describing how he came to be appointed. Jacques Chirac, the French President, rang him up to tell him what Gerhard Schroder, the German Chancellor, wanted. The British Prime Minister didn't merit a passing mention.

There is a serious economic argument to be held about the pros and cons of Britain joining the euro. The arguments in favour concern the creation of a genuine, competitive single market, and whether British companies can afford to be on the outside, victims of a volatile exchange rate.

The arguments against concern the limits membership would set to macroeconomic management, and how damaging it might be to lose the ability to set interest rates for the UK alone. Although European interest rates are already well below UK rates, the pro-euro case is not helped by the tardiness of the European Central Bank in taking more action to help boost growth at a time of global crisis. It might still do so after its meeting today, which would make the cost of borrowing on the Continent half that in the UK.

Nor is the case for joining helped by the reluctance of most Continental politicians to introduce fundamental reforms that would help their economies work better. But British politicians are not going to persuade them to do so by lecturing in a superior way from the outside - Tony Blair's recent speech to European socialists on his Anglo-Saxon vision of a modern and competitive economy won no converts. He simply is not seriously engaged in their overwhelming political project, unless and until he takes the UK into the single currency.

A rocky first 100 days have not sown a single seed of doubt about the euro in Euroland. It should not mislead anybody in Britain either. The euro is here, and the longer the UK stays out the further away from us the Continent will drift.