The Corporate Currency


The euro will only be a friend to big business – as the progressive Swedes have clearly understood


 


Caroline Lucas Tuesday September 16, 2003 The Guardian


 


The rejection of the euro by Swedish voters should give both sides of the debate in Britain pause for thought. The Swedish no camp won not on the basis of nationalist or conservative arguments, but a compelling case on the economics and politics of the decision – while the yes campaign lost in spite of the support of big business, the mainstream political parties and all major media outlets.


 


Give voters the respect of a mature political debate, it seems, and they will turn out and make their minds up for themselves. As a progressive internationalist – not to mention a member of the European parliament – my opposition to the euro is often met with incredulity. The euro is frequently presented as a matter of good faith for internationalists: a necessary step towards further political integration. We’ll never be able to agree on managing our common fisheries, or a united commitment to upholding human rights standards, so the argument goes, if we can’t even accept a single currency.


 


Opponents of UK entry into the eurozone are often equally driven by ideology. Adopting the euro would weaken Britain‘s competitive edge at a stroke and drive a stake through its cultural identity and sovereignty, they argue. Grassroots anti-euro activists have been portrayed as “little Englanders”.


 


So progressive internationalists must be in favour of the euro then? Well, no, actually. Greens, for example, want a sustainable, democratic economy in both Britain and Europe, driven by social and environmental justice as opposed to the pursuit of ever-increasing economic growth, with the benefits shared widely. Will joining the euro bring us closer to this ideal? – the answer is clearly no.


 


Joining the euro would make it harder to move towards meeting these goals, for three core reasons: because it represents a shift in power from democratic institutions to the unaccountable European Central Bank (ECB) and its corporate bedfellows; because it erodes member states’ ability to propose solutions to local, regional or even national disparities; and because it furthers corporate globalisation and entrenches its goals – increased consumption, trade and profitability. This has and will continue to cause a “race-to-the-bottom” as governments fall over themselves to sacrifice democratic control and public accountability for the sake of competitive advantage.


 


With the introduction of the euro, control of interest rates passed from member states’ central banks to the ECB, a decisive factor in the Swedes’ rejection of the euro. Thus monetary union is a fundamentally undemocratic project. It has stripped member states of their power to tailor economic policy to local and national circumstances and placed it instead in the hands of an institution which is open to neither scrutiny and democratic audit nor influence.


 


The impact on public services would be devastating. Within one year of abandoning the escudo for the euro, Portugal, for example, was forced to make massive cuts in public spending to meet the stability pact’s criteria. The cuts haven’t been quite enough on their own, however, and public sector wages now face the squeeze. The government in turn is bracing itself for popular protest to erupt on the streets again: the prime minister recently said the country was facing its “most difficult period in history”.


 


So it seems European monetary union will not serve the interests of progressive internationalists, equity, social justice or democracy. It won’t serve the interests of environmental protection, either, as power transfers to exactly those corporations whose activities environmentalists would like to see regulated further. So whose interests does it serve? A glance at the history of monetary union points to one answer above all: the euro benefits corporate interests, and especially those corporations operating across Europe‘s borders, rather than those of wider society.


 


It will contribute to a Europe, in other words, run to the tune of the free market agenda, a rigid monetarist environment with maximum price stability. A Europe where regulation – to protect the environment, human rights or social provision – is frowned upon as an impediment to free trade. A Europe where labour market deregulation will be used to force wage cuts in countries that can no longer use devaluation as a strategy: a Europe where unemployment rises as wages fall, all in the name of competitiveness. These effects are already there, for all the world to see, in Germany and France – unemployment in these two economic “powerhouses” has risen every month since they adopted the euro.


 


If the EU is to stay relevant to everyday lives, and engage citizens – as it must to retain legitimacy – it needs to promote and protect democracy, sustainability, equity and jobs. Monetary union poses a lethal threat to all these objectives.


 


That’s why the Swedes voted no on Sunday, after a referendum campaign based not on euroscepticism and xenophobia but sustainability and accountability – and that’s why progressive internationalists, greens and a growing number of trade unions and left-thinkers are opposed to the euro here in the UK.


 


· Caroline Lucas is the Green MEP for south-east England.


 


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