EU man faces sack for book on currency `con'

TONY BARBER

Europe Editor

A British economist is facing the sack from the European Commission for writing a book that denounces the planned single European currency as a "confidence-trick". A Commission spokesman said yesterday that Bernard Connolly had violated Commission rules by not asking for permission to publish his book, entitled The Rotten Heart of Europe: The Dirty War for Europe's Money.

Mr Connolly, who is on leave from the Commission, is a middle-ranking official with responsibility for monetary matters.

Colleagues said his scepticism about monetary union had been an open secret in Brussels for a long time.

The affair is embarrassing for the Commission, partly because it illustrates that the single-currency project is capable of provoking severe differences of opinion in the European Union's executive branch.

Mr Connolly's views carry some weight, because he joined the Commission as long ago as 1978, one year before the creation of the Exchange Rate Mechanism, the EU's system of semi-fixed exchange rates.

He contends in his book that the ERM is an arrangement run primarily for the benefit of France and Germany, and says Britain's membership of the ERM from 1990 to 1992 was a catastrophe.

His book is likely to be required reading for the Thatcherite, Europhobic wing of the Conservative Party.

Mr Connolly says that a single currency would not only destabilise European economies, but increase political tension across the continent. "Monetary union would reduce political legitimacy in every country in Europe and in Europe as a whole. It would increase economic instability in every country in Europe, and in Europe as a whole," he said yesterday.

The Connolly affair erupted only two days after the Governor of the Bank of England, Eddie George, voiced grave doubts about the single-currency project. Speaking in the Norwegian town of Skien, south of Oslo, he said it was far from clear that countries participating in monetary union would be able to adhere indefinitely to the strict convergence criteria stipulated in the Maastricht treaty.

"It is not enough just to meet the convergence criteria at a particular moment in time. The crucial question is whether we will be able to be at all confident that convergence will in fact be sustainable, if at the same time we are confronted by very high levels of unemployment and by widely differing national unemployment levels among the larger countries," he said.

The Maastricht treaty sets out a number of conditions for countries forming a monetary union, including prolonged currency stability, low inflation and interest rates, and upper limits on public debts and government budget deficits. Like Mr George, some economists are concerned that, although various countries may meet these conditions in a period of economic expansion, they may find it impossible to stick to the criteria when the business cycle turns down without inflicting severe damage on their economies.

Despite such fears, the EU shows no sign of relenting on the single-currency project, which is due to be launched in 1999, even though no name has yet been chosen.

EU central- bank chiefs are discussing a blueprint for introducing the single currency today in Frankfurt, where the future European central bank will be located.

One of the most contentious issues concerns the relationship between currencies that form a monetary union and currencies that stay outside. Some EU officials say countries such as Britain, Greece, Italy, Portugal and Spain, which are unlikely to take part in monetary union in 1999, should not have the right to let their currencies float freely against the single currency because this could give them an unfair competitive advantage.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Telesales / Telemarketing Executive - OTE £30k / £35k plus

£18000 - £35000 per annum: Recruitment Genius: This company specialises provid...

Austen Lloyd: Commercial Property Solicitor - Exeter

Excellent Salary: Austen Lloyd: EXETER - A great new opportunity with real pot...

Austen Lloyd: Senior Private Client Solicitor - Exeter

Excellent Salary: Austen Lloyd: EXETER - An outstanding senior opportunity for...

Sauce Recruitment: Retail Planning Manager - Home Entertainment UK

salary equal to £40K pro-rata: Sauce Recruitment: Are you available to start a...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower