The last few months have been pretty momentous for the EU project. At the same time more and more people in Britain are starting to talk about our relationship with Europe. It is a subject that cannot be ignored. Platform 10 has asked two acquaintances – one passionate Euro-sceptic and a proud Euro-phile – to answer the question: “Should Britain be at the heart of a strong Europe?”. Earlier today Christian May blogged on why the answer must be no. Now Richard Denys gives the reasons why he believes the answer has to be yes.
I follow the historian Eric Hobsbawm in considering that the high point of European Civilisation was reached in the nineteenth century, based on peace, free trade and prosperity. This civilisation was destroyed by the carnage of the First World War which was caused by rival state nationalisms. For three decades Europe descended into barbarity; nations sought refuge behind protective trade barriers and the result was economic stagnation.
After the Second World War, thanks to the European Coal and Steel Community ( which removed from national control the two elements necessary to make weapons of war) and the European Common Market ,peace, free trade and prosperity returned to Europe. This was a virtual rebirth of civilisation which has continued up to today. However, civilisation is always vulnerable; the break-up of Yugoslavia showed that the cancer of xenophobic nationalism is still a threat and ready to spread should the EU and the euro fail.
The adoption of the euro by the Maastricht Treaty (1992) was a decisive step on the road to European integration. It had two implications: first that countries who had agreed to use the same currency were thereby committing themselves to support each other and, second , that since no currency in history has been able to function without being the instrument of a single government, the countries of the eurozone would have to evolve towards a single government with a single economic policy.
The present crisis has come about because a succession of European leaders have chosen to ignore these implications; weaker economies became isolated dominoes ready to fall on each other when pushed by market speculation. There was nothing inevitable about this. It came about through a lack of vision and courage on the part of the same politicians who preferred to contract enormous national debts rather than present their electorates with the choice between increased taxes or reduced expenditure.
The agreement reached at last Thursday’s summit is important because it shows that governments have now been obliged to recognise the implications of Maastricht. It is encouraging that the agreement goes beyond resolving the problem of Greece. The greater involvement of the European Central Bank and the powers granted to the European Financial Stability Facility to provide credit to member states point the way towards what would prove to be a real solution, namely the creation of a European federal budget with its own public debt. The EU at present has the immense advantage over nation states of having no debt. It can therefore borrow sums of money sufficiently large to protect member states from the attacks of the market and at the same time this money can be invested in economic development and research. The British know well that not all debts are bad news; it was our invention of the national debt which laid the foundations of our empire in the eighteenth century.
The European economy is potentially the most powerful economy in the world but it needs economic and political integration to realise its full potential. Once this process begins, however, the economic benefits could be so great that the process itself could accelerate. In a globalised world of competing continental power blocks, we really have no choice but progress down this road. The survival of our civilisation is at stake.