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Bye, bye, euro


AS THE EURO heads for parity with the pound, its supporters are coming back out of the woodwork. But the euro is the past, not the future.

A devastating French report published before the present slump revealed that Europe’s biggest companies were planning 40 per cent of their investment outside Europe, adding to the notoriously high unemployment level in the eurozone.

The report, “Economic Policy and Growth in Europe”, was produced by the think-tank Conseil d’Analyse Economique, chaired by Prime Minister Villepin. It stated: “economic integration has stagnated and no longer promotes growth”. More: “The euro’s creation has not produced the knock-on benefits expected…The inability of the EU to revive the economy turns investment away.” It concluded: “The EU will have an ever-decreasing influence. Its chapter in world history will draw to a slow but inexorable close.”

The European Commission itself recently forecast a decrease of EU share of world trade from 18 per cent in 2002 to 10 per cent in 2050, and a fall in share of world GDP from 35 per cent in 2004 to 14 per cent in 2050.

The present crisis of capitalism is reviving debate about the economic value of the EU to Britain and other independent countries such as Iceland. Will leaving cost jobs and trade? Is joining the euro a way out of recession? If we broke free, clawing back billions of pounds a year, could we set up a free trade agreement?

It is said that 3 million British jobs depend on membership, but this assumes that trade with the EU would cease altogether and ignores other trading partners. From 1999 to 2005 UK exports outside the eurozone grew 45 per cent faster than exports to the EU.

British business, using European Commission figures, says that the cost of EU red tape far outweighs the benefits. A Bruges Group study, drawing on sources such as the IMF, the World Trade Organization, EU and UK national statistics, says the total gross cost of the EU to Britain in 2008 was £65 billion: £28 billion for regulatory compliance, £17 billion in food costs due to the CAP, £3.3 billion lost fishing catch due to loss of waters, and £14.6 billion gross towards EU funds.

There is no net economic benefit to Britain staying in. Even Mandelson and Clarke know that the world’s fastest declining bloc will drag Britain down. But they will let it – if the working class permits them to.