The Week in Europe
By David Jessop

"The Euro is changing the face of Europe. Europe's economic fundamentals are
sound, sounder than they have been for over a generation. The EU's economies
are growing faster than almost anywhere else in the developed world. The
European Central Bank is also meeting its objectives and delivering low
inflation and higher growth across Europe."

So wrote the British Prime Minister, Tony Blair in a unique joint article
with Spain's Prime Minister, Jose Maria Aznar, published in the Financial
Times on June 13. The two prime minister's comments came in the context of
the EU summit to be held shortly in Portugal but have triggered a heated
debate in the United Kingdom over whether Britain should adopt the single
European currency. 

The article was intended primarily to set the scene for Spain and the UK to
promote their belief that further economic liberalisation within Europe will
strengthen the Euro and enable the strong British economy to converge with
that of other European economies.

Its aim was to indicate a fundamental difference in the two's approach to
that of their colleagues in Germany and France. It was the public face of a
new Anglo-Spanish axis which aims to counter a re-invigorated Franco-German
alliance which Britain and Spain believe is intent on slowing the process of
economic liberalisation in Europe while promoting a federal Europe. 

But this was not the way the article was read in Britain. Rather it
suggested a strategic shift in the way that Britain's Prime Minister saw the
United Kingdom's place in Europe and in relation to the single currency. The
article seemed to suggest that Prime Minister Blair was aware that the
criteria set for entering the Euro were close to being met, that Europe's
economy was beginning to grow in a sustainable way, the Euro was being well
managed and growing stronger and that no matter how divided his cabinet was,
Britain had to eventually tie the pound to the single currency.

The effect has been to set the scene for a fundamental political and
historic debate in the United Kingdom. This will determine not just
Britain's economic place in the world but its future politics and strategic
alliances if government either fails to proceed into the Euro or the
electorate choose to reject monetary integration with Europe.

The issue of Britain and Europe and the Euro goes right to the heart of
British consciousness. Britain has a peculiar history. Unlike the rest of
Europe it has passed through almost a thousand years during which no one
invaded successfully. Instead Britain industrialised first, created wealth,
built an Empire and a unique confidence - sometimes arrogance - that reached
its zenith in the pivotal experience of standing alone against Nazi Germany.
Folk memories and associated myths, natural conservatism and the heightened
sense of sovereignty associated with being on an island makes Britain's
different.

Its electorate is as a consequence unusually vulnerable to emotional appeals
about maintaining the nation's independence of action. This is especially so
at a time when voters see little practical difference in the ability of
either main political party to deliver rapidly changes in areas of domestic
policy such as healthcare or education.

As a result British politics may be polarising around radically different
approaches to issues on which there had previously been a consensus. Europe,
represented by the Euro debate, is now at the forefront of the new divide,
but there are other signs of division over relations between town and
country, crime and race relations, immigration and asylum seekers, national
identity and the autonomy or otherwise of the regions of the UK.

None of which is to suggest that Britain is on the edge of some fundamental
crisis. Rather it is to note that in such circumstances the outcome of the
next election due in 2002, but widely thought to be likely to be called in
May 2001, is no longer the certainty it seemed even three months ago.

>From having an unassailable lead and charismatic leadership, Britain's new
Labour party seems to be rapidly loosing ground to a Conservative Party
despite the latter's apparent unreadiness to lead or govern. Moreover,
Labour is in danger of allowing historic internal divisions to surface as
new labour elitism and more importantly the Euro and Europe create
differences at all levels within the party. To make matters worse for
Labour, memories of the ineptitude in the closing years of the last
Conservative Government are beginning to fade as Britains' governing party
is perceived to be placing more emphasis on image than substance. 

The result is a real possibility that the next British election may result
in a dramatically diminished Labour majority and an election after that
being called sooner rather than later, perhaps over the Euro, which in turn
might see a new populist right wing Conservative Government returned.

Unfortunately the Euro has become a symbol of all that is considered federal
and not British and one of a number of nationalistic and xenophobic issues
around which the next British election or any referendum on the Euro will be
fought. 

A weak Euro has already had a negative effect on prices for Caribbean sugar,
rum, bananas and other goods. It has dissuaded some tourists in the Euro
zone from travelling to dollar related destinations. For these and other
reasons the debate in the UK on the Euro has to be of interest to the
region. But much more importantly the outcome will determine how Britain
positions itself in the world. Already politicians who for the most part
seem unable to see the world at large dominate Britain's Parliamentary
Labour party. The British Conservative Party now seems intent on building a
party in Government with an equally narrow opinion of the world. 

Governments quite correctly dialogue with elected Governments rather than
opposition parties. Despite this it may make sense to begin a conversation
now with the British Conservative Party and start to cultivate a new and
very different generation of opposition politicians. Only in this way will
the region be able to decide how to engage with those who may possibly be in
government in Britain during the negotiations to come which will end
preferential arrangements with Europe.

David Jessop is the Executive Director of the Caribbean Council for Europe. 
June16th, 2000 



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