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The speech which has just been made by the noble Lord, Lord Howell, who has great knowledge of these matters, is one with which I could not possibly bring myself to disagree--that is, in the sense that he is probably right that the tempo is being accelerated. But there are other things happening to which I called your Lordships' attention at an earlier stage of the Bill which one must look at again. They are political developments on the continent of Europe.
When the treaty was first signed, it appeared almost unthinkable that Chancellor Kohl would not be in power when the provisions about a single currency came into effect. It now looks not only likely, but very probable, that Chancellor Kohl is on his way out and that the kind of statement which he made about Europe becoming a single government, not merely having a single currency, will begin to look very dated. If Chancellor Kohl does not succeed in winning the next election, the well known German antipathy to the sacrifice of the mark will begin to make itself felt, even with the clumsy German political system. Therefore, we are not in a position to know, even within the next 12 months, who our interlocutors will be in Europe.
There is also the important point that, after all, when we come to discuss the important questions of the impact on employment, we have had one experience within the past decade of monetary union--the monetary union between western and eastern Germany. What has been the result of that monetary union? The relative economic positions of the two parts of Germany have not converged but have gone farther apart. As I pointed out to your Lordships a week or two ago, the result is the recrudescence of extremist right-wing and left-wing political parties in what was the German Democratic Republic. The idea that somehow or other those political and constitutional issues are secondary to the insights of multinational firms--often blinkered as to their own real interests--is something which this House should deplore.
Therefore, we come to what I think is the central point of the new clause proposed by my noble friend and with which, despite those reservations, I have no quarrel. The central point is the constitutional one. We have constantly been given to understand by the Chancellor of the Exchequer and by the noble Baroness, Lady Williams, that this is not a constitutional issue of central importance; namely, the final transfer of power from the British electorate to put in power or to chase out of power a government with which it is not in accord. That is, after all, ultimately what the constitution is about. To suggest that a government would be worth electing which would have no power over currency, which was a symbol of government not merely for decades but for centuries--or, as archaeology tells us, for millennia--is to embark on an enterprise which can surely only end in disillusion and disaster.
It is therefore absolutely essential that constant pressure is brought to bear on the Government to make clear whether there is anything in the idea that some kind of political influence could still have an impact on those splendid hard money characters whom everyone unites to praise. Hard money may be a good thing in some circumstances. It may be counter-productive in others. The assessment must be the assessment of the prosperity of the peoples involved.
Whatever one may think about French negotiating tactics, President Chirac has a point. The French people will not accept indefinitely having their economic fortunes dictated by the will of a country, their neighbour, twice their size and much more powerful industrially. There are bound to be frictions. They may have as many pate de foie gras dinners in Avignon as they like, but in the end the French economy and the German economy are different. If one brings in the economies of southern Europe, the differences are even more marked. I find it difficult to understand how anyone can even flirt with the idea of Britain being part of that kind of enterprise, doomed, as it is, I fear, to failure.
Lord Stoddart of Swindon: My Lords, I listened with great interest to the noble Lord, Lord Mackay of Ardbrecknish. Over the years he and I have been somewhat opposed over the issues of the Central Bank and our membership of the European Union. I understand his position and I am sure that he understands mine. I found his quotation from The European of 27th April to 3rd May interesting. It was a reference by Herr Kohl to EMU and the relationship of Germany to Europe through EMU.
For a long time many of us have been quoting Herr Kohl and others as saying that it is German policy to have a united federal Europe under the suzerainty of Germany. I have been criticised for saying that. I have been called a xenophobe and told that I am anti-German simply for quoting what Herr Kohl says. It seems to me that what I and others have been saying has now been made respectable by the noble Lord, Lord Mackay of Ardbrecknish. He too realises what the German agenda is and he is no more anti-German or xenophobic than I am. However, we need to understand the reality of the position and, in understanding it, be careful of what we do.
The noble Lord, Lord Howell, quite rightly cautioned against being pushed into this venture without knowing where we were going and what the results would be. He is quite right. It is absurd for this Gadarene gallop into the unknown to be taking place at this point in time, or for that matter at any point in time. We must recognise that going in will involve major risks. It has never before in history been tried. That does not appear to be borne in mind by all those who are enthusiastic about it. It is like saying, "It will be all right on the night". But, as the Conservatives found at the last general election, it was not all right on the night. We cannot exist simply on hope; we must grapple with reality. The reality is
Again, I do not believe that there has ever before in history been a single currency without first there being in place the political structures to manage it. Yet we are going into the single currency without the political structures which will make it viable. That is a recipe for disaster, and everybody knows that. We must understand what those political structures are. That is why we need a proper report. It will be no use the Government replying to the House of Commons' excellent report in the way that they so often reply to those of us who ask for a cost-benefit analysis of our membership of the European Union. From their reply, the benefits would appear to be self-evident. But they are not; and they are certainly not self-evident when we look to future economic and monetary union together with a single currency. We must be careful therefore what we do.
We must remember ERM. Can anybody forget it? I cannot, but some people can. What was the reason for the ERM disaster? It was because we rushed into it without knowing or contemplating the consequences. We were bounced into it at much too high a rate. We were probably bounced into it by the other countries of the European Union. I hope that I shall not be accused of being a xenophobe for saying that. It was in their interests that we should go in at too high a rate. It was a disaster, and we should remember that.
We should also bear in mind that if we go in, we shall lose control of our monetary policy and to a degree our fiscal policy also. How then will we deal with a possible slump? Bankruptcies and ruin will be inflicted on many industries, as happened when we came out of the ERM. Unemployment will rise to 3 million or 4 million. How will we deal with it if we are irrevocably linked into the European system and a single currency?
We discuss issues in this Chamber, but others discuss them as well. I was struck, on reading the Daily Telegraph of Monday 11th May, to see a letter from Mr. Rodney Leach. He is not a politician; he is not a Member of the House of Lords; he has never been a Member of the House of Commons, but he is a sensible and extremely experienced man. He is second-in-command at Jardine Matheson and a director of many other companies. He wrote an excellent letter under the heading,