The argument here in Britain is between those who want to be a part of Europe and those who don't; on the Continent, EMU is an act of faith, a way of binding Europe together to ensure that never again will there be war or dissension between nations. But look for the serious economic analysis and polemic, and there's hardly any. Certainly there's nothing to compare with the Cecchini report on the likely effects of the single European market.
In part this is because EMU is indeed an act of faith. Until it is tried, it is hard to tell what its effects might be. We know that it will involve a not insignificant reduction in transaction costs, but we don't know much about its other economic effects. Nor do we really know whether it is possible to have both monetary union and, as envisaged, a continuation of independent national fiscal and social policies.
The questions are asked, but hardly ever is there a serious attempt to answer them. On the latter question, for instance, you either believe it will be possible or that it won't; the debate rarely rises above this simple statement of position. So it is refreshing to hear that big business, which constitutes one of the few pro-EMU lobbies in Britain, is planning to step up its efforts to air these issues.
Niall FitzGerald, newly appointed chairman of Unilever, is planning a full frontal attack on the anti-EMU brigade, which will be delivered from a businessman's perspective in a Chatham House speech next week. At its conference next month, the CBI promises a Euro debate, with David Simon, chairman of BP, and Peter Sutherland, chairman and managing director of Goldman Sachs (Europe), putting the case in favour of EMU. So as not to alienate its strong anti-EMU constituency, the CBI is lining up John Redwood and Sir John Hoskyns to put the other side of the case.
Mr FitzGerald makes an obvious champion of EMU. For a start, he's Irish. He also runs a company which is as strongly Dutch as it is British. Unilever is owned by two holding companies, one British and one Dutch, but it is run as a unified whole. If Holland were in, but Britain out, it would create the most horrendous problems. Furthermore, if the economic consequences of being out were bad enough, then Unilever's rarely used mutual equalisation pact might have to be called on; assets would have to be transferred from the Dutch company to support the British.
Mr FitzGerald's concerns about being out go beyond these specific practical difficulties, however. At present all Unilever toilet soap for the European market is produced from a factory near Liverpool. That strategy and others like it will have to be rethought if Britain stays out.
Mr FitzGerald is only one of the most vocal in a growing body of business opinion. Slowly but surely, the pro-EMU business lobby is emerging from the closet. It is easy to see why this is such a painful and difficult process. There can scarcely have been a more pro-business administration - not since the last century anyway - than the one that has ruled Britain for the past 17 years. And yet as the rest of Europe hurtles down the path of monetary union, the Government becomes progressively more Euro- sceptic. There are now just two pro-EMU politicians left in the Cabinet, Kenneth Clarke and Michael Heseltine, and even they feel constrained in what they say. In public at least, they are gagged. The rest have run for cover. Even Michael Howard, once upon a time a convinced pro-European, now speaks the language of the rabid Euro-sceptic.
In these circumstances, it doesn't seem surprising that business too should hold its tongue and hedge its bets. Rarely does it pay to bite the hand that feeds you. All the same, a number of our leading multinationals are beginning to feel distinctly uncomfortable about their rabbit-like position, held in the glare of EMU's headlights. More of them are planning to speak out.
There has been a subtle, but quite significant, shift in their position in recent months. Up until now, the pro-EMU view in Britain has generally been of the half-hearted variety espoused by Lord Kingsdown's committee on monetary union. Horribly simplified, it goes like this: we're not really sure whether EMU is a good thing or not, but what we are sure of is that if it does go ahead and we are not in it, then that will be bad for Britain. In other words, if you can't beat them, join them.
The new view, championed by business leaders such as Mssrs FitzGerald and Simon, is much more positively pro-EMU. EMU is a good thing, we should definitely be in from the start, the consequences would be dire if we were not. As always, the message has to be exaggerated to drive the point home. And yet it is still tempered up to a point.
Most of us British exponents of monetary union are still worried about the timetable. An alarming degree of fudge is required to meet these very tight self-imposed deadlines. Even accepting that the Maastricht criteria define an adequate degree of convergence, which in itself is debatable, the massaging of national accounts going on makes it highly questionable that the required convergence is being achieved. If as a consequence, EMU falls apart within a few years of start up, that will be the end of it, if not for good, certainly for a generation or more.
So if you believe in EMU, which many of our world-class companies do, then it is by no means a contradiction to think that we are also moving much too swiftly towards it. The fact that we are is a Franco-German mistake. Helmut Kohl, the German Chancellor, wouldn't be caught dead admitting it but close observers of these things have noted an ever so slight shift in his position in recent months. Egged on by the Bundesbank, guardian of the strong Deutschmark, it is just remotely possible he is preparing to adjust his position and put back the timetable a year or two.
That may be wishful thinking, of course, but it shouldn't stop our leading companies arguing for it. We cannot afford to botch something as important as this. If we Brits find it hard to say this with much conviction, that is only because we all still feel too much like the outsider, proselytising about somebody else's club. If we said it as committed Europeans, then we might actually get heard.Reuse content