The single currency was once such a contentious issue; only a decade ago it seemed likely that the UK would be joining the Eurozone. What happened? Today, Jack Straw predicted that the Euro will indeed fail following the inevitable defaulting by Greece of its sovereign debt, leading to a return to those old holiday favourites like the Drachma. As the media keeps reminding us ominously, despite our not being part of the monetary union, a collapse of the Euro would have a devastating effect on our economy, because of the global nature of our trade regime and our over-reliance on our closest neighbours for exports. This begs the question that if we cannot escape the effects of these sorts of economic crises in a globalised world, is it not time to become more unified to prevent the two-track system we have at the moment, where richer nations are being forced to bail out those in trouble?
I am no economist, yet if I learned anything from my second-year Interwar Economy course (between lapses into and out of a coma), it is that the attempt to ‘force’ currencies of varying strengths to use the same interest rates as part of the Gold Standard was in hindsight a fairly disastrous decision, without some sort of accompanying political union where individual nations have the same tax-and-spending and trade regimes – like BULS members’ attitudes to musical theatre, it seems we can only be either completely pro or completely anti EU. Given that Labour is a progressive party, and that in today’s global economy an insular economic nationalism is unthinkable (we have no industry for that), is it not the time to at least ‘float’ the idea of some sort of European federal state, if we are to keep the post-war dream alive?
This idea may be too much for many people to swallow, and the media will never accept it, but do we really have any realistic alternative when we are competing with economies like China and India? We cannot afford to let the European ideal crumble on the back of this financial crisis.