How could so many clever people get it so wrong? The flaws in the euro project are not just clear with hindsight; they were visible at the outset and were widely pointed out. It was never going to be possible to jam widely divergent economies into a single monetary policy. It was plainly reckless to invite Italy and Greece to join the new currency when their government debt was at twice the permitted level of 60 per cent of GDP. Plenty of doubters said so at the time. Yet, in every national parliament, in every central bank, in every university faculty, in every television editorial conference, there was a collective suspension of disbelief.
Twilight of the Eurocrats: Angela's valkyries are riding to their doom (Illustration Michael Daley)
Why? What were they thinking? If you listen carefully to what Euro-integrationists were saying when the single currency was launched, you hear a subtext. It's not so much that they liked the euro, it's that they disliked the people who opposed it. Listen, for example to Charles Kennedy in 2002:
The euro, despite gloomy predictions from anti-Europeans, has proved to be a success. We cannot afford to be isolated from our biggest and closest trading partner any longer.
Or to Ken Clarke:
The reality of the euro has exposed the absurdity of many anti-European scares while increasing the public thirst for information. Public opinion is already changing as people can see the success of the new currency on the mainland.
For such men, the issue was never really economic, or even political, but tribal. Having defined the question, in their own minds, as a Kulturkampf between sensible progressives and ignorant bigots, they became more or less uninterested in the facts.
The extraordinary thing is that many euro-enthusiasts are still at it, quite unabashed by how things have turned out. Here, for example, is the historian Norman Davies in the Financial Times a couple of weeks ago:
‘How marvellous,' they chortle in the Tory clubs; ‘the busybodies of Brussels are meeting their come-uppance. After all, those ghastly Greeks who cooked the books to enter Euroland in the first place are sure to be cooking them again with an eye to ever larger bail-outs. Greece will push French banks down the chute first; but German banks won't avoid it, and together they'll finish Italy off. With luck, Italy will suck Spain into the abyss; Portugal will follow Spain, and Ireland Portugal. Just think of it! Those Irish traitors from 1922 will get their deserts! Terrific!'
Then continental banks lock their doors and the cash machines dry up. Minestrone kitchens appear on the streets of Rome. Spanish bullrings house the destitute. The bridges of Paris fill with rough sleepers. Weeks and months pass free of money. Europeans relearn the art of barter. When the cash flow stutters back, machines distribute drachmas again, the franc nouvel and the peseta nueva. Yet Britain's latterday Blimps will still not be satisfied. They hanker for the whole hog; before we pull up the drawbridge, they say, the EU itself must vanish.
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