So now we know. The euro is much more than just a currency. Wim Duisenberg, president of the European Central Bank, was almost poetic in his remarks yesterday when unveiling the final design for euro notes and coins.
Abandoning his usual mumbling style, he insisted the euro is a symbol of European integration, stability and unity. Forget the economics, he said, the euro is actually as much about upholding freedom, human rights and democracy in a continent which down the ages had been repeatedly ravaged by war. It would be easy to mock Mr Duisenberg's idealism and no doubt many will.
The ECB president's rare display of emotion does none the less make a serious point. For part of the problem that Britons have with the euro is that they don't on the whole recognise or empathise with any of these features. In Britain, the euro is viewed as "just a currency", and as such the economic case alone for joining continues to look questionable. Down the ages, moreover, British interests seem to have been better served by being out of Europe than in it. That thin strip of water has protected us from the worst of the ravages of war and insulated our island race from Europe's many economic calamities. History rightly makes us suspicious of being joined at the hip to our troublesome European neighbours.
Philosophically, both the Prime Minister and his more sceptical Chancellor believe in the euro and think that eventually Britain will be a part of it. The point has been made many times before, but it needs constantly repeating. Love it or loath it, the euro is here to stay. It is almost inconceivable that it might at this late stage still fall apart, and British economic and diplomatic interests in Europe will get a much better hearing if we become a part of it than if we remain outside.
But despite the persistent "will they, won't they take the plunge" wall of speculation, the realpolitik of the situation is that the Government won't risk a referendum until it can be sure of winning, and there's still a long way to go on that front.
Technically, the introduction of the euro has so far been pretty much faultless, but in other respects the new currency has got undoubted problems. It's much weaker than it was supposed to be, price harmonisation across Euroland is proving slower to develop than anticipated, it hasn't been as much of a catalyst for free market reform as some had hoped, paralysed by compromise and inactivity, the European Central Bank has had difficulty in establishing credibility with financial markets and, perhaps most important of all, the new currency has proved unpopular with its citizens.
Only in Italy, where Richard Nixon's famous opinion of the lira seems to be quite widely shared, is the introduction of euro notes and coin eagerly anticipated (during the height of the Watergate scandal, Nixon is supposed to have greeted news of another lira crisis with the remark; "I don't give a – expletive, deleted – about the lira"). Well, elsewhere in Europe they do seem to care about their legacy currencies, and many of them are deeply concerned about what the future holds.
Mr Duisenberg was insistent that yesterday's quarter-point cut in interest rates was the last we'll see for quite a while, but not many believe him. In many parts of Europe, unemployment remains stubbornly high even as economic growth slows to a standstill.
The euro may indeed be more than just a currency, but right now European policy makers would be wise to put the rhetoric aside and concentrate on its economic fundamentals. No project as difficult as this one can succeed without a certain amount of misty-eyed idealism, but for large parts of Euroland, the new currency is not yet delivering, and while this remains the case, there's very little chance of Britain joining.
Off course betting
My word has the British horseracing industry got the bit between its teeth. Having hugely upped the ante for live TV coverage of its race meets, the British Horseracing Board is now turning its attentions to off-course betting, where it hopes to improve its pay back from the present 1.5 per cent of total revenues to the 2.5 per cent that tends to be the norm in other parts of the world.
Oh no you don't, says Hilton Group's chief executive, David Michels. We'll do without live race data and TV coverage in our Ladbroke betting shops entirely if you try that one and persuade the punters to bet on something else instead – greyhound racing, football, and foreign horseracing, for instance. It worked during the foot-and-mouth crisis, when most British horseracing was cancelled, so it can be made to work on a permanent basis as well, he says.
At this stage, it's hard to predict who is going to win in this game of bluff and double bluff, but what is not in doubt is the high stakes involved. Off-course betting in Britain is a £7bn a year industry, of which British horseracing accounts for approximately £5bn. What's more, the forthcoming switch in the way the industry is taxed – from betting tax to a gross profit tax – is expected to add anything up to 50 per cent to these numbers. As can be seen, the difference between 1 per cent and 2.5 per cent is a big number.
The moral case for upping the fee certainly seems a strong one. Despite its reputation as the greatest racing industry in the world, British prize money is pathetic by international standards and so is the pay.
Betting shops meanwhile generate nearly all their income from the industry while putting a pittance back in return. More to the point, perhaps, what will happen to off-course betting without British horseracing? It might be able to survive the foot-and-mouth crisis, but if the position were permanent, the punters would desert in droves, and instead turn to the new medium of betting via interactive TV.
In any case, the British Horseracing Board, the industry's governing body, believes Mr Michel's negotiating position is all bluff, and it is determined to hold out for as much as it can get. With neither side apparently willing to give ground, the dispute looks like going to the wire.
The truth of the matter is, however, that these industries need each other. There are plenty of other ways of betting these days – from the mobile phone to the TV – but none of them will ever entirely displace the high street betting shop where to while away an afternoon in a smoke-filled flea pit is many people's idea of a good time. Somehow or other, a compromise has to be reached.
Orange had some unexpectedly positive news for the stock market yesterday, though it didn't intend anyone to see it quite so soon. A cock-up led the company to e-mail this year's Ebitda figures to analysts together with accompanying commentary, rather than than the refresher note on last year's. But no matter. The figures were actually very good, and unequivocal evidence that despite all the gloom and doom that surrounds the mobile phones sector, things are really not that bad.
For the moment, however, no one seems prepared to listen. Figures earlier this week showing that global sales of mobile phones fell sharply in the second quarter for the first time ever has only heightened the mood of despondency. It shouldn't. Bad news it plainly is for the likes of Nokia, but for the service providers, it means lower handset subsidies and higher profits.Reuse content