The London European Conference: EC 'in danger of complete economic collapse': Influential banker warns exchange rate mechanism cannot survive failure to ratify Maastricht treaty
Tuesday 08 September 1992
The conference, 'Europe and the World after 1992', brought together politicians and officials from all 12 member states to mark the UK presidency of the European Community.
Mr Attali also dismissed as 'a delusion' the idea that the exchange rate mechanism of the European Monetary System can survive if the EC fails to ratify the 1991 Maastricht treaty. 'If Europe doesn't move forward, it can only retreat,' he said. 'If we cannot bring ourselves to ratify this treaty, it will be a disaster for the whole continent.'
In sharp contrast to John Major's assertion earlier that most of the EC's achievements would remain in place even if France says no to the treaty in its 20 September referendum, Mr Attali insisted that the key to monetary stability is the 'ultimate goal' of a European central bank. 'With that removed, Europe faces the prospect of higher interest rates and further instability.'
In a combative speech, he warned of the creation of a 'war economy' if German interest rates remain high and the dollar low. He also called bluntly for international co-operation to stabilise the dollar 'at a realistic exchange rate', and for Germany to lower its interest rates. Both, he insisted, are 'prerequisites for further economic recovery'.
Speaking as president of the bank trying to help to transform Eastern Europe into an area of market economies, Mr Attali attacked the Community for failing to open its market.
'It sometimes appears that it's the EC that has a major problem with adjustment, rather than the countries of Eastern Europe,' he said.
He demanded that the Community should immediately renegotiate 'on better and more equal terms' all trade agreements with former Communist countries, many of which include restrictions against the import to the EC of important products from the east. As a short-cut, it would be better for the EC to talk to them all together, rather than strike deals singly or in groups.
Despite his criticisms, Mr Attali made a spirited plea to Mr Major to use Britain's presidency to help central and eastern Europe. He described the presidency as 'our last window of opportunity,' and called for the application of 'Britain's global perception to a problem of pan-European proportions'.
Mr Attali warned that help from western Europe was essential if the east was to avoid wholesale disintegration. Otherwise, life on the continent would 'become like the life of man in the Leviathan of Thomas Hobbes . . . solitary, poor, nasty, brutish and short'.
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