EU forces the pace on single currency
Thursday 01 June 1995
The European Commission called yesterday for all member states to begin detailed practical preparation for the single currency, setting itself on a collision course with Britain, which has not yet decided to take part in monetary union.
As revealed in the Independent last month, the Commission Green Paper calls for a mass education campaign through schools, commerce and industry, in order to convince the public of the benefits of monetary union. It dodges making a recommendation on the name of the currency, although it clearly favours the ecu, and leaves the issue of symbols on the money for governments to decide.
The Green Paper, to be presented to heads of state at the forthcoming European summit in Cannes, will be viewed by British Eurosceptics as an attempt by Brussels to bounce Britain into moving forward and to brainwash a reluctant British public.
The Green Paper may nevertheless make it harder for Britain to remain on the sidelines as the rest of the European Union gets ready for the single currency.
Until now John Major has been able to defer substantial public debate on monetary union by claiming that the case has not yet been made and political decisions on whether to join remain distant.
Kenneth Clarke, the Chancellor, suggested recently that, although a single monetary policy might be adopted by some member states, the advent of the single currency might not happen for years. On that, he said, "we should let the people decide," suggesting the process should evolve by popular demand.
The Green Paper reaffirms that the decision of the European Union to go for monetary union has already been taken in the Maastricht treaty. Britain has the right to opt out of EMU, but the British public must be in no doubt that other states which meet the necessary economic criteria will merge their currencies - and soon.
Under the timetable envisaged by the Commission, and most other member states, the political decision by governments on which countries are ready and willing to join EMU will be taken in January 1998.
There will then be a year's gap before the process is launched in January 1999, with the locking of exchange rates. International transactions and some internal banking dealings will then switch to ecu, but it will be a further three years before notes and coins are brought in.
The old and new currencies will circulate together "for a maximum of a few weeks", before the old is withdrawn. "By the end of the century Europe will have a single currency," says the Green Paper. This timetable means it will become increasingly impossible for Britain to pretend its decision on EMU can be deferred. Rather, EMU will be a dominant issue during the next election, which must happen by May 1997.
Given the firm timetable, it is argued in Brussels that Britain will find it increasingly difficult to avoid joining in the preparations proposed by the Commission. While maintaining the right to opt out, Britain knows that it may choose to opt in and must therefore be prepared.
Seen from Westminster, however, any idea of launching a mass education campaign or making legislative changes ahead of an election appears anathema. What the Green Paper may trigger is a process of education which achieves a momentum of its own - without any political control. The Green Paper speaks not only to governments but to business people, bankers, and consumers themselves.
What the Commission clearly hopes is that in Britain - as elsewhere - the education process will slowly begin of its own accord as groups and businesses take their own initiatives.
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