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The following article appeared in Left Business Observer #82, March 1998. It retains its copyright and may not be reprinted or redistributed in any form - print, electronic, facsimile, anything - without the permission of LBO.


EMU

In just a bit over nine months, the euro will be born, and the next stage in the process of European economic and monetary union (EMU) will begin. Of the fifteen countries that make up the European Union (EU), eleven (Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain) will begin a three-year process of dissolving their national currencies into a single continental one (wEuroSymbol & linkhose symbol is shown nearby). Three (Denmark, Sweden, and the UK) are holding off on this step, and one (Greece) just wasn't tough enough to make the cut this time around.

That cut was made mainly on the basis of the state of government finances, specifically the budget deficit and the amount of debt outstanding. Few other considerations, like income levels or industrial structures or demographics or culture, entered the picture. Americans accustomed to thinking of Western Europe as a less austere and less orthodox way of doing capitalism should revise those thoughts immediately; Europe is now run by econocrats and central bankers, and it has become the most austere and most orthodox region of the world, with balanced budgets and hard money taking the front seat, and everything else either in the back seat or left behind entirely.

 

Elite scheming

An outsider dipping into the literature on European unification for the first time is quickly struck by the absence of any canonical story of how and why it's been taking place. Has it been a way to bind Germany to keep it from dominating the continent, or, in the words of the now-dead Thatcher advisor Nicholas Ridley, is it just a "German racket to take over Europe" (a position shared by U.S. conspiracy connoisseur and radio host Dave Emory). Was it a way to solidify the European welfare state or undermine it? Was it undertaken out of various