Leading article: Ten years on, Europe's single currency is vindicated

And the fall of the pound should revive debate about euro membership

Share
Related Topics

Euro anniversaries might seem two a penny these days. The most recent was the 10th birthday of the European Central Bank in May. But the anniversary that falls at midnight tonight – the moment, 10 years ago, when the exchange rates of Europe's major currencies, including the Deutsche Mark, the French franc and the Dutch guilder, were linked together and fixed – marks the point of no return.

A project that had once been a mere gleam in the eye of Valéry Giscard d'Estaing had materialised into European monetary union. Without it, the notes and coins, now taken almost for granted across so much of Europe, would not have come into circulation three years later. In a remarkably short time, the euro has become a world reserve currency, cohabiting with the US dollar, if not challenging its supremacy. That achievement alone would qualify the euro to be judged a success.

That tomorrow's anniversary coincides with a high point of the euro – in many different respects – is a happy coincidence for its early advocates. In strictly economic terms, the thesis may be suspect, but at popular level, the strength of a currency reflects the internationally perceived standing of the nation, or group of nations, that use it – and that this in turn reflects the way the country thinks about itself. After a tentative start, the rise of the euro against the US dollar and the recent sharp devaluation of sterling against both currencies testify to the relative strength of the eurozone economies and the positive light in which the European Union is widely seen.

The present head of the European Central Bank, Jean-Claude Trichet, has steered a steady course through the turbulence of the past year. Fears that competing pressures from different national economies would weaken the euro, perhaps spelling its collapse, have proved unfounded. So far, the reverse has happened, with countries that had shunned the single currency, such as Denmark, reconsidering their position.

But the transformation of economic fortunes brought about by the global economic crisis also poses crucial questions for Britain. As the pound sinks, apparently inevitably, to parity with the euro, it is reasonable to ask not only whether Britain made a mistake in not joining the euro at its inception, but whether euro-membership should not now become a priority. The Business Secretary, Lord Mandelson – perhaps the chief cheerleader for the euro in the Cabinet – has insisted that the Government has too much on its hands to fast-track such a contentious policy just now, while maintaining that euro membership remains a long-term aim.

But is this really good enough? The British public has been given no further insight into official thinking since 2003, when Gordon Brown, as Chancellor, closed down renewed debate, by saying that his "five tests" had not been met. That might have been true then. Now, though, the validity of those five tests – met or not – must be of questionable relevance; the economic and political context in which they belonged has changed utterly.

Simply listing these tests – convergence of interest rates, the impact on financial services, the need for market flexibility, the effect on growth, stability and jobs, and, finally, investment – shows how outdated they have become. It is high time for the Government to consider the merits of euro membership in the present circumstances, not against criteria rooted in the past.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Volunteer your expertise as Trustee for The Society of Experimental Biology

Unpaid Voluntary Position : Reach Volunteering: Promising volunteer Trustee op...

Email Designer

£30000 - £35000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

Psychology Teacher

£110 - £130 per hour: Randstad Education Reading: Psychology Teacher needed fo...

Food Technology Teacher

£85 - £120 per day: Randstad Education Cheshire: Randstad Education are curren...

Day In a Page

Read Next
 

i Editor's Letter: The rules were simple: before the results are announced, don’t mention the S-word

Oliver Duff Oliver Duff
Howard Jacobson has been shortlisted for the Man Booker Prize for the second time  

In praise of Howard Jacobson

Simon Kelner
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week