DSK: “Monetary Union is like a Marriage”

by Andrew Stuttaford

Writing in the Daily Telegraph, Charles Moore discusses the magnificent new pamphlet by Peter Oborne and Frances Weaver (Guilty Men, available for purchase from the Centre for Policy Studies here) on the attempt by a large slice of the British establishment to bamboozle the UK into the euro, and notes the contribution of none other than DSK to the debate:

The Euro-visionaries such as Jacques Delors did not mind avoiding the question of sovereignty. Indeed, they almost rejoiced in it. They had wanted political union and failed to get it. So they hoped that, by pushing through economic and monetary union, they would make political union inevitable. If only they could get enough people into the room, they reasoned, they would find that they would not want to leave.

What they refused to contemplate was what is now happening. In 1997, William Hague predicted that being in the euro would be like “being trapped in a burning building with no exits”. He was attacked for his “half-way-out extremism” (Hugo Young), but today the acrid smoke from that fire is billowing across the markets. You can hear the screams of those trapped inside.

The crisis today is indeed worse than what followed the collapse of Lehman Brothers in 2008. People make bright suggestions for how the problems of the eurozone could be sorted out. These all depend on the idea that reform can be agreed and enforced. Given that treaty change can take years, and markets can collapse in hours, this seems improbable.

But there is a much deeper problem than one of time. In a really beautiful cutting from 1997, Oborne and Weaver find Lionel Barber, now the editor of the Financial Times, quoting with approval some words of Dominique Strauss-Kahn, then the French finance minister. Strauss-Kahn was attacking Britain for staying out of the euro. “Monetary union,” he said, “is like a marriage… People who are married do not want other people in the bedroom”: poor old Britain would find herself locked out. Subsequent events suggest that Mr Strauss-Kahn’s own bedrooms are rather less exclusive than he implied, but the assumption behind what he said was that the diplomatic marriage of France and Germany would ensure all was well. This turns out to be quite untrue. Diplomacy cannot create a nation, or even a looser political community, such as a United States of Europe. For that, you need the agreement of citizens. Such agreement has never seemed more remote in the history of the European Union than it does today.

Indeed. The question now is how much further the EU’s elite will try to go without that agreement. And no, that is not a reference to DSK’s legal problems.