Anti-Maastricht Alliance: single currency "threat to democracy"

Brian Denny looks at a new pamphlet and its case against the euro

European Commission president Romano Prodi helpfully clarified the purpose of the single currency recently by pointing out that it was a ‘purely political process.’

Even European Central Bank president Wim Duisenburg predicted that the euro would act as a catalyst for political integration in areas outside economics, particularly military and foreign policy.

"The euro is much more than a currency. It’s a symbol of European integration in every sense of the word," he says.

For the federalists, the euro and the European army are two sides of the same coin as Mr Prodi points out: "the two pillars of the nation state are the sword and the currency, and we have changed that."

German Finance Minister Hans Eichel, speaking officially on behalf of Berlin, added a common tax policy to the list following the launch of the single currency.

"The currency union will fall apart if we dont follow through with the consequences of such a union. I am convinced we will need a common tax system."

For these and other reasons the euro can be seen as a political tool, designed to dismantle national democracy and sovereignty not only in the eurozone but in large parts of the Balkans where it has also become the official currency.

Applicant EU nations are also being forced to abolish their national currencies as a condition for joining, which is particularly absurd when the governments of Denmark, Sweden and Britain do not propose giving up their own national currencies themselves.

The European Anti-Maastricht Alliance (TEAM), made up of over 50 eurocritical groups from over 30 countries have produced an excellent statement highlighting the dangers involved in the euro experiment.

It points out that the central element of such a scheme is to liquidate the democratic heritage of the American and French Revolutions: the right of nations and peoples to self-determination.

The various EU treaties aim to put national economies and the welfare of citizens under the rule of bankers - free from all democratic control - at the European Central Bank in Frankfurt and its agents, the now subordinate central banks of the member states.

TEAM points out that a national currency is essential for every democratic independent state because it enables its government to control its rate of interest and its exchange rate in a manner that serves the interests of its people.

"The rate of interest is the domestic price of a currency, governing the cost of credit, borrowing, investment and the amount of money in an economy. It is a key policy instrument for advancing the people's welfare. The exchange rate is the price of a currency for citizens of other countries. It governs the terms on which a country exchanges goods and services with its trading partners."

"By altering its currency exchange rate a country can affect the competitiveness of its trade with others."

"If a country has an unsuitable exchange rate for a long period, it can suffer a permanent competitive disadvantage, resulting in low economic growth and unemployment," it says.

Without the safety valve of either the interest rate or exchange rate, national economies are more vulnerable to economic shocks that may affect them more than others.

Needless to say, the interest rate in euroland already does not suit most member states, which have vastly different needs.

There is no better or more timely example of these dangers than in Argentina which collapsed into rioting last month with dozens killed, debt default and a state of siege.

Buenos Aires effectively did in 1991 what 12 EU states have done this month and gave up an independent currency by locking the peso one-to-one with the US dollar.

The Argentine economy, now unable to devalue when necessary, began to horribly contort itself to fit the wrong exchange rate, leading to four years of agonising recession and growing poverty.

This fate awaits all those in the eurozone trying to fit into the "one size doesn't fit all" monetary policy - invariably based around the German economy.

Tension between countries that require different economic policy responses, but have the same policy imposed on them by the ECB, is likely to grow over time and eventually shatter the euro-zone system.

Mr Prodi let the cat out of the bag a couple of weeks ago by admitting that the euro would, indeed, create a crisis that would allow the EU to grab a whole set of economic powers that it has so far been politically unacceptable to advocate.

This use of crises by Brussels for it's own eurofederalist ends was clearly on display following the September 11 attacks on the US when it made massive strides in grabbing legal powers from member states otherwise considered taboo.

As Mr Prodi declared at the time: "The current crisis could be seen as favouring integration by stressing the need for action at a higher level than a national one."

Brussels openly uses such fears and concerns to promote it's own integrationist agenda and warns that those outside the eurozone will suffer.

However, the evidence shows that those trapped inside suffer high unemployment and stubbornly low growth while those countries outside, such as Norway and Switzerland, are among the richest and most stable in Europe.

TEAM also makes some interesting points questioning the starry-eyed idea that the euro will somehow abolish conflict in Europe and beyond.
It says that in 1999, the year the euro was established, there were 25 wars waging in the world, 24 of them in countries with a common currency.

Between 1989 and 1999 there were 108 armed conflicts in the world, 101 of them within states that had a common currency.

And, ultimately, why would an EU superpower want to build an EU army unless it wanted to fight external EU wars?

The driving force for this empire-building project is clearly corporate power.

The only freedoms the various EU treaties enshrine is the rights of capital to be free from the constraints of democratic nation states within the vastly differing areas of Europe.

There is no realistic likelihood of the richer EU countries being willing to pay vastly greater sums to Brussels to compensate the poorer countries for surrendering the ability to use exchange rate and interest rate policy to balance their national payments.

Therefore the only way they can do so is by accepting lower wages and interest rates compared to their competitors, or, if they are not prepared to do that, remaining unemployed at home or emigrating abroad.

In many different ways, the introduction of the euro is a direct assault on democracy and national independence.

Therefore, the task of democrats is to organise to remain outside the single currency or to reestablish their national currencies, however long that may take.

Brian Denny is foreign editor of the Morning Star, Britain's independent socialist daily newspaper, where this article first appeared. TEAM's website is at