Letter: 'Dirty floating' inevitable in a world of deregulated financial markets

Sir: The breakdown of the exchange rate mechanism is not just a setback for European monetary union; it poses a threat to the integrity of the European single market, as each member country exploits its freedom of action to strengthen its competitiveness against its EC partners by devaluation. In the process Europe will forfeit its chances of competing with the rest of the world.

And, as EC governments retreat first from monetary, then from economic co-operation, they will find themselves under equally strong pressures to retreat from political co-operation also. This lamentable state of affairs results from a failure of leadership everywhere in Western Europe.

It is not good enough for the British government to say, 'I told you so.' It should now be showing the kind of leadership that Churchill and Ernest Bevin showed in the Forties, and that Edward Heath showed in the Seventies. It should now relaunch the idea of a strong common currency, backed by an independent central bank to sustain the single market. And it should demonstrate by words and deeds its understanding that a single market and close political co- operation are as vital for Britain as they are for Europe.

Yours faithfully,

ANTHONY MEYER

European Movement

London, SW3