Progress | Centre-left Labour politics

Taking a pounding

The arrival of the euro looks set to change
the debate in Britain, argues Tom Arbuthnott

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The euro has not exactly been underexposed in the British political debate since its launch three years ago. Even if Downing Street and the Treasury have been relatively silent, this has been more than made up for by the endless argumentation of the professional euro community.

From a lay person’s perspective, though, these have largely been three years of political vapourware. Despite the virulence of the arguments, most people still maintain that (a) they don’t know a great deal about the euro and (b) they’d like to know more but don’t know where to look.

The major effect of the arrival of notes and coins will be to move the debate out of the political lobbies and into the bars, train stations and shops. Before e-day, the euro could easily be presented as a plot hatched by Brussels’ desk warriors to denude us of our sovereignty – now, though, it is something altogether less dramatic, just… a currency. Rather than have a pile of old francs, lira and pesetas in a bowl by your bed, there’s a pot full of shiny five cent, ten cent and 20 cent coins. Attitudes to the euro will be shaped by the prosaic reality of a coin in your pocket, not so much by the doom-laden pronouncements of a politician.

It is early days, but this could have three effects.

First, it opens up a space for microeconomic arguments. While the key determinant of the timing of a referendum will remain the assessment of the five tests, especially with regard to the exchange rate, this type of economic argument will be less immediate than those which relate to actual lived experience – for example, whether it is easier or more difficult to buy things in euros, or whether being able to compare prices increases the freedom of consumers to shop around for the best deals.

Second, it exposes the mirage of ‘status quo security’. Perceptions of risk play an important part in directing people’s instincts on the euro. ‘Going in’ appears far riskier than ‘keeping the pound’. However, e-day has made it clearer that there is no such thing as the status quo. The pre-euro pound was one currency out of fourteen; the post-euro pound is a singularity clinging on between the euro and the dollar. These are two very different sorts of currency. Providing the euro beds in successfully, joining could start to seem the less risky option.

Third, it reduces the ability of the print media to set the agenda on European questions. Up until now, the newspapers have been the main source of information and comment on the euro. Now, though, booze cruises, broadcast stories, novels, films and holidays will all advertise the euro as a fact of life used on a daily basis by millions of people. The leader columns will be able to base their projections on real data; and their readers will have something real to refer to in judging the validity of their arguments.

By bringing the euro down to earth, its arrival may also change the tone of other debates about Europe. The Commission and the European Central Bank managed to pull off an extraordinarily complex operation without disaster. Public acceptance of the efficiency and difficulty of this will provide a counterbalance to some of the EU’s patchier histories, like those of agricultural subsidies and development aid.

At the same time, as debates about the euro become more practical than ideological, this may rub off on Britain’s engagement with the other key political issues in Europe, notably the progression of enlargement and the development of a blueprint for a functional European Union. Key decisions on how democracy might work better in the EU are due in 2004. If British politicians are not to be taken aback by some of the more constitutional proposals, they will need to start thinking beyond the euro soon. January 1, paradoxically, may have made that easier.

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Tom Arbuthnott

runs the Europe Programme at The Foreign Policy Centre

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