Launch of euro
Democracy under corporate attack

On January 1, 12 of Europe's national currencies were replaced by a 
single currency, the euro. There were big celebrations at the European 
Central Bank (ECB) in Frankfurt. But in London, anti-euro protestors from 
the Campaign for an Independent Britain mourned the death of the 
currencies. They carried a coffin, wore black armbands and handed out death 
notices outside the Bank of England. Britain is one of three European Union 
(EU) member countries still hanging on to its national currency. Brian 
Denny writing in the British left daily, the Morning Star points out 
that the euro is much more than a currency.

European Commission President Romano Prodi helpfully clarified the purpose 
of the single currency, the Euro, by pointing out that it was a "purely 
political process".

Even European Central Bank President Wim Duisenburg predicts that the euro 
will act as a catalyst for political integration in areas outside 
economics, particularly military and foreign policy.

"The euro is much more that a currency. It's a symbol of European 
integration in every sense of the word", he says.

For the federalists, the euro and the European army are two sides of the 
same coin. As Mr Prodi points out, "the two pillars of the nation state are 
the sword and the currency and we have changed that".

German Finance Minister Hans Eichel, speaking officially on behalf of 
Berlin, added a common tax policy to the list following the launch of the 
single currency.

"The currency union will fall apart if we don't follow through with the 
consequences of such a union.

"I am convinced that we will need a common tax system", Mr Eichel declared.

For these and other reasons, the euro can be seen as a political tool, 
designed to dismantle national democracy and sovereignty not only in the 
eurozone but also in large parts of the Balkans where it has also become 
the official currency.

Applicant EU nations are also being forced to abolish their national 
currencies as a condition for joining, which is particularly absurd when 
the governments of Denmark, Sweden and Britain do not propose giving up 
their own national currencies themselves.

The European Anti-Maastricht Alliance (TEAM), which is made up of over 50 
eurocritical groups from over 30 countries, has produced an excellent 
statement highlighting the dangers involved in the euro experiment.

It points out that the central element of such a scheme is to liquidate the 
democratic heritage of the American and French revolutions — the right of 
nations and peoples to self-determination.

The various EU treaties aim to put national economies and the welfare of 
citizens under the rule of bankers — at the European Central Bank in 
Frankfurt and its agents, the now subordinate central banks of the member 
states.

TEAM points out that a national currency is essential for every democratic 
independent state because it enables governments to control interest and 
exchange rates in a manner which serves the interests of their peoples.

"The rate of interest is the domestic price of a currency, governing the 
cost of credit, borrowing, investment and the amount of money in an 
economy", TEAM says.

"It is a key policy instrument for advancing the people's welfare. The 
exchange rate is the price of a currency for citizens of other countries. 
It governs the terms on which a country exchanges goods and services with 
its traditional partners.

"By altering its currency exchange rate, a country can affect the 
competitiveness of its trade with others.

"If a country has an unsuitable exchange rate for a long period, it can 
suffer a permanent competitive disadvantage, resulting in low economic 
growth and unemployment", it says.

Without the safety valve of either the interest rate or exchange rate, 
national economies are more vulnerable to economic shocks that may affect 
them more than others.

Needless to say, the interest rate in euroland already does not suit most 
member states which have vastly different needs.

There is no better or more timely example of these dangers than in 
Argentina, which collapsed into rioting late last year with dozens killed, 
debt default and a state of siege.

In 1991, Buenos Aires effectively did what 12 EU states have done and gave 
up an independent currency by locking the peso, one-to-one, with the US 
dollar.

The Argentinean economy began to horribly contort itself to fit the wrong 
exchange rate, leading to four years of agonising recession and growing 
poverty.

This fate awaits all those in the eurozone trying to fit into the "one size 
doesn't fit all" monetary policy — which is invariably based around the 
German economy.

Tension between countries that require different economic policy responses, 
but have the same policy imposed on them by the ECB, is likely to grow over 
time and eventually shatter the eurozone system.

Mr Prodi let the cat out of the bag by admitting that the euro would, 
indeed, create a crisis that would allow the EU to grab a whole set of 
economic powers that it has so far been politically unacceptable to 
advocate.

This use of crisis by Brussels for its own Eurofederalist ends was clearly 
on display following the September 11 attacks on the US when it made 
massive strides in grabbing legal powers from member states which had 
otherwise been considered taboo.

As Mr Prodi declared at the time, "the current crisis could be seen as 
favouring integration by stressing the need for action at a higher level 
than a national one".

Brussels openly exploits such fears and concerns to promote its own 
integrationist agenda and warns that those outside the eurozone will 
suffer.

However, the evidence shows that those trapped inside suffer high 
unemployment and stubbornly low growth, while those countries outside, such 
as Norway and Switzerland, are among the richest and most stable in Europe.

TEAM also makes some interesting points which question the starry-eyed idea 
that the euro will somehow abolish conflict in Europe and beyond.

It says that, in 1999, the year in which the euro was established, there 
were 25 wars being waged around the world, with 24 of them in countries 
with common currency.

Between 1989 and 1999, there were 108 armed conflicts in the world, 101 of 
them within states which had a common currency.

And, ultimately, why would an EU superpower want to build an EU army unless 
it wanted to fight external wars?

The driving force for this empire-building project is clearly corporate 
power.

The only freedoms which the various EU treaties enshrine is the rights of 
capital to be free from the constraints of democratic nation states within 
the vastly differing areas of Europe.

There is no realistic likelihood of the richer EU countries being willing 
to compensate the poorer countries for surrendering the ability to use 
exchange rate and interest rate policy to balance their national payments.

Therefore, the only way in which they can do so is by accepting lower wages 
and interest rates compared to their competitors or, if they are not 
prepared to do that, remaining unemployed at home or emigrating abroad.

In many different ways, the introduction of the euro is a direct assault on 
democracy and national independence.

So the task of democrats is to organise to remain outside the single 
currency or to re-establish their own national currencies, however long 
that may take.