No more Europhoria

William Safire

September 22, 1992|By William Safire

LONDON — London- BY A margin as slim as a mannequin's waist, France apparently voted "yes" on Sunday to a union of European currencies. Thus, the country whose leaders invented the Common Market showed how profoundly its people were split about surrendering national sovereignty to German fiscal discipline.

The only way to stop German industry from taking over its competitors, the French had long been told, was to enmesh that Gulliver in a web of Lilliputian bureaucracy -- a form of unaccountable control in which France is pre-eminent.

But Germany, to the surprise of European federalists, thinks first about Germany, and made clear all too soon a willingness to dominate its neighbors.

To finance its absorption of East Germany, the Bundesbank set out to attract capital without inflation by putting interest rates high. Because its neighbors were forced by the new rules to keep unequal currencies equal, Germany's political priority effectively beggared its neighbors, who could not lower their rates to stimulate recovery.

Here in London last week, the British discovered the folly of depending on the kindness of strangers. The German bank sent a signal to London, in effect, to lower the British standard of living. When the Conservative government of Prime Minister John Major at first resisted by trying to support the pound, speculators gleefully walked off with a third of the nation's foreign-currency reserves.

Then followed the economic equivalent of Dunkirk. Britain evacuated its currency from the exposed beach, withdrawing from its obligation to march in lockstep with German policy. The value of the pound will float on the rolling sea of supply and demand, and not be moored to the mark.

Maggie Thatcher was right: The utopian promise of a single currency turned out to be a trap that surrendered basic decisions within a democracy to a foreign power. Both the Tory and the Labor leadership still don't know what hit them, as the free market devalued the pound and sent stocks up; the public, ahead of the political class, is now certain that monetary union is dead. Euro-skepticism, previously on the back benches, is now in the saddle.

In France, too, nearly half the people have had second thoughts about being able to contain the Germans by trusting Germany to put Europe's interest first.

The entire French political establishment, from pseudo-Socialist Mitterrand to pseudo-Gaullist Chirac, pleaded with the public to vote "oui," offering interest-rate bribes and warning naysayers of financial panic. The "non" side attracted political villains, from the racist Le Pen to the Socialist Chevenement, Iraqi President Saddam Hussein's best friend in Europe.

Even so, France showed itself to be almost evenly divided on an issue that its leaders treated only months ago to be a foregone conclusion. The emergence of public opinion as a counter to the bureaucratic power grab was demonstrated in Jacques Chirac's classic fudge: "France's interest is not so much to vote 'yes' as not to vote 'no.' "

Sunday's result was "not no"; it would be foolish to interpret this reluctant "oui" as "yes." The color of the voter's light is amber, not green.

Germany's Helmut Kohl, having shown German domination too soon, will go to a summit meeting in two weeks to listen to his neighbors' complaints about having to pay for his reunification with their recession. Miraculously, the Bundesbank will then discover that inflation will not be triggered by its lowering of interest rates.

Too late; people in other countries now see that the French plan to contain Germany by surrendering sovereignty is foolish appeasement. The European Economic Community with its benefits will proceed, but the forced march to monetary union and then political union has run into a brick wall called public opinion.

What of the U.S. interest? Americans normally share Richard Nixon's expletive-deleted lack of concern with the lira, but we do have an interest -- not wholly selfish -- in the grass-roots resistance to European union.

Europe is made up of real nations. Real nations act in the economic interests of their people. Sometimes those interests conflict. The conflicts are best resolved in the marketplace and the voting booth, rather than suppressed in bureaucratic backrooms until an imposed order cracks wide open.

It was a terrible week for Europe's politicians, but a good week for Europe and the world.

William Safire is a columnist for the New York Times.

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