Time for UK to leap off the fence onto the euro

January 4, 2002

Adopting the euro will give the UK and universities a chance to have more influence in the EU, says Juliet Lodge.

Where is the United Kingdom in the great transition to a single currency that has just taken a giant step forward in the rest of the European Union?

Sitting on the fence, with many shops ready to take euros brought back by winter holidaymakers but bank customers unable to deposit the odd 50 or 100 euros in their accounts. The chancellor will be unable to make his views heard on key elements of evolving and emergent EU employment and economic policies because the UK is outside the eurozone and therefore not part of the decision-making nexus.

If Britain has pretensions to leading the EU, to informing its policies and shaping its federal and political destiny, then it has to be active in every EU forum. British universities are used to dealing in ecus. But being able to write research proposals for EU funding from multidisciplinary transnational teams will be easier and more transparent now that everyone (except the UK) is able to submit costings in euros. This will save considerable academic time normally squandered on clerical tasks.

Universities have held Euro-accounts for years and the main benefit will come from being able to do the business on exchange students and staff in one currency rather than in several. Whether this will lead to a change in student-exchange patterns depends on the willingness of the UK to continue to be a net importer of continental European students once any caps are lifted.

The EU can and must do better on a range of issues. It must never be above criticism. It must be open, tolerant, democratic, accountable and responsible. We have a chance to demonstrate how one might achieve and sustain those ideals in a contemporary and relevant way. If we duck out now, not only might we not like the outcome but we will have forfeited one of the greatest opportunities in modern times to create something worthwhile for Europe and the rest of the world.

In theory, universities should be slightly ahead of the game. British universities, which have been among the largest and most successful participants in EU programmes, should see the immediate benefits of a semi-universalisation of the euro and the additional financial, transactional and administrative burdens British universities bear compared with their neighbours.

British academics have long complained about the time-consuming business of having to convert sterling (and other currencies) into euros often at a "hedge-rate", and re-convert into a real-time rate later. Adopting the euro would make pragmatic sense and would release valuable time to spend in research. Needless to say, given the amount of travel within Europe undertaken by individual academics, not having to carry several currencies at once will be useful. But British banks will continue to be somewhat unpopular with transaction charges that continental counterparts legitimately evade. Perhaps more academics will open individual accounts in Europe. But they may instead allow continental partners to be the lead institution in research projects, so attracting the administration of grants and the kudos for directing the project, to the detriment of the UK's international research standing.

The next inter-governmental conference in 2004 will be no minor affair. Its goals are as important government to abdicate its responsibility in shaping Europe at the very moment when it is poised to as were those of the founding fathers of the United States. The British public is unlikely to want the be a voice for reason in the world. Not a counterweight to the US, nor a junior partner as some would have us believe, but an additional voice committed to and operationally capable of being a model for the peaceful resolution of conflict at all levels.

The EU was never purely an economic exercise. It is political, par excellence . Joining the euro is not an economic matter pure and simple. It is a political one. All manner of economic tests can be devised to cement arguments for and against joining. But there is no longer any genuine political argument worth its salt to sustain a case against us using the same currency as our partners in our existing political union with them.

That being so, would it not be simpler and more honest to get on with the issue of making Europe as effective, open and fair as possible as a polity in its own right - with or without Tony Blair as the first directly elected EU president. Could Eurosceptics think beyond the euro? What kind of polity should an enlarged EU have? What values must it sustain? And how is this to be realised while retaining democratic attributes dear to all of us?

Juliet Lodge is professor of European studies and professor of European Union politics at the University of Leeds. She is a member of the Advisory Council of Britain in Europe.

Features, pages 18-19

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