Euro is greeted with a resigned shrug

Click to follow
THE OWNER of my favourite bar in Paris is not a philosophical sort of man. He rarely says anything at all. But the other day he came to my table and gave a long soliloquy about the euro. It is a subject dear to his heart, and pocket, since he replaced his till and bankers' card machines to prepare for the partial launch of the new currency next month.

To my surprise, the soliloquy was not negative. Nor was it especially positive. He was convinced, in a matter-of-fact kind of way, that the coming of the euro was the "real beginning of Europe as one country. How much did any of it mean in Brussels until now? Nothing. But money, people understand that".

He predicted that in 50 years' time, everyone in Europe would have two nationalities and two languages. "As for me, I feel Breton and French. In the future, they will feel French or Italian or German, and at the same time, they will feel European. Everyone will talk their own language and also English. Except you, the English. You will always talk only English."

If he is right, and the Daily Telegraph is right, and the French Eurosceptics such as the former interior minister, Charles Pasqua, are right, next week marks the beginning of the end of the nation state in Europe.

Where - apart from in Britain - are the forces of national resistance? Where are the street demonstrations? Where are the new European civil wars, predicted in a book serialised in the Times a couple of years ago? Where are the legions of currency speculators, determined to bring the whole cumbersome apparatus down?

The coming of the euro is the story of a whole pack of dogs which did not bark. The recession, and uprisings - predicted as a result of the spending cuts forced by the euro guidelines - have not happened. The economies of the euro-land countries, with record low interest rates and low inflation, are resisting the turbulence in the world economy better than most.

The visceral opposition of the German public has evaporated. The French public - like the other nine euro publics - is apathetically enthusiastic: hugely in favour, according to the polls, but not especially interested. The three-year gap between the political launch of the single currency this week and the appearance of alien, monopoly money in people's pockets looked like a huge hostage to fortune. It may turn out to have been a political masterstroke: lulling the Europeans into a gradual acceptance of the euro, like someone drowsing in the bath with the hot tap turned on.

Even for someone fundamentally pro-European, it is a bizarre, even disturbing experience, to see a proud and great country like France sleep-walking into something so elemental to its future. From 1 January, the husk of the franc will remain in French pockets, but the franc, as an independent national currency, instrument of national economic policy, and symbol of national sovereignty, will have ceased to exist. The rate of the franc against the euro and the 10 other euro currencies will be fixed in concrete. Decisions on interest rates and money supply will be taken by the European Central Bank in Frankfurt, under the chairmanship of a Dutch banker.

Until 1 January 2002, the euro will have a strange life as a virtual, plastic and electronic currency. There will be euro cheque books. There will be euro-compatible bankers' cards. But there will not be any foldable euro notes or tossable euro coins.

Big business in euro-land is expected to switch to making paper and electronic transactions in euros immediately. For the next three years, small businesses, restaurants and shops have the option of accepting euros in plastic or cheque form - or not, as they wish.

Seen from street level, the whole business looks like a non-event. But the Paris bar-owner, Charles Pasqua and the Daily Telegraph are right. The coming of the single currency is a quantum leap in the creation of a common European identity and a single European political and economic entity.

It is a quantum leap partly for the reasons the bar-owner gave. Once the euro becomes a real currency in three years' time, Europe will become part of daily life, something palpable and meaningful to ordinary, non- farming Europeans for the first time. This could, ultimately, help to create the kind of political and democratic legitimacy which the European Union - always a top-down, elitist kind of notion - has never really had. Small wonder that the Eurosceptics loathe the idea of the euro as they do.

But there are also huge dangers from the pro-European perspective. If the European economies falter or crash before the euro becomes fully accepted, the single currency and the European Central Bank will be easy and obvious targets for demagogs. The single currency is a quantum leap for other reasons, which pro-Europeans prefer to smooth over. Part of the reason why many Britons have never emotionally accepted the EEC/EC/EU is that it was sold to them as a simple common market, which it never really was. Similarly, the Blair government, under withering Eurosceptic fire, tends now to minimise the significance - in terms of sovereignty, in terms of loss of economic control - of joining the single currency.

In truth, the existence of a single currency is likely to force the euro- land governments, little by little, to take many more economic and political decisions together. Scope will remain for independent policies on taxation (as even the individual US states or Canadian provinces have). But the otherwise destabilising effect of differing national economies will force euro-land governments to co-ordinate economic policy more closely. To this extent, the decision of the new German government to drop the Kohl- fired opposition to such a notion is not so much a swing to the left as a recognition of reality. Once that happens, the case for more direct democracy at European level would become unanswerable. The history of the EU has been one of setting purely economic targets - the common market, the single market, the single currency - which turn out to be deeply political targets. Removing economic barriers forces the removal of political barriers. The coming of the euro sets that clock ticking again, more powerfully than ever before.

Fine. There are good economic arguments for the euro. There is a case for more political unity in Europe, short of the arrogant, bureaucratic, federal superstate of Eurosceptic nightmares. But the closer you come to real lives of real people, as the euro does, the more you need to be sure that the real people accept what is happening in their name and why.

The indifference with which the phantom phase of the euro will be greeted throughout euro-land next week may baffle Eurosceptics; it should also unsettle the pro-Europeans.