The Man Who Invented the Euro

December 3rd, 2011 at 12:06 pm David Frum | 8 Comments |

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The Telegraph today posts an interview of Jacques Delors by Charles Moore.

I ask the man who prides himself on being an architect of European Union whether he got it all wrong. Unhesitatingly, cheap he denies it. It is a fault in the execution, medical not of the architects, which he claimed to have pointed out in 1997 when the plans for introducing the euro finally came together. At the time, he says, the best of the eurosceptic economists, whom he refers to as “the Anglo-Saxons”, raised the simple objection that if you have an independent central bank, you must also have a state.

Mr Delors thinks “they had a point”, but the way round this problem was to insist on the economic bit of the union as much as the monetary. As well as creating a single currency, you also had to create common economic policies “founded on the co-operation of the member states”.

I get the impression from Mr Delors that he thinks Mrs Thatcher would have agreed with this view. She certainly would not have agreed, however, on the Delors version of what that co-operation should produce — the harmonisation of most taxes, plans to deal with youth and long-term unemployment, and that social dimension for which he always called because “it is not just a question of money. I said all these things, but I was not heard. I was beaten.”

There was also a problem of “surveillance”. The Council of Ministers should have made it its business to police the eurozone economies and make sure that the member states really were following the criteria of economic convergence. This did not happen.

For a long time, the euro did remarkably well, Mr Delors argues, bringing growth, reform and price stability to the weaker members as well as the stronger. But there was a reluctance to address any of the problems. “The finance ministers did not want to see anything disagreeable which they would be forced to deal with.” Then the global credit crisis struck, and all the defects were exposed.

Whom does he blame most for this? He thinks that “everyone must examine their consciences”. He identifies “a combination of the stubbornness of the Germanic idea of monetary control and the absence of a clear vision from all the other countries”

And what would such a clear vision look like?

The euro can emerge from this crisis only if two conditions are met. “The first is that the firemen must put out the fire. The second is that there must be a new architecture. If you have one of these things without the other, the markets will be sceptical.”

The choice is “either to accept a greater transfer of sovereignty or to submit to a common discipline”.

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8 Comments so far ↓

  • ottovbvs

    To provide context The Daily Telegraph is a notoriously right wing, anti European newspaper owned by the Barclay Brothers who use it promote their agenda although they in fact live as tax exiles in the British channel islands. And the notion that Delors “invented” the Euro all on his little ownsome is puerile.

  • Fart Carbuncle

    Ignore otto. Too many hits on his liberal head to make sense.

  • blowtorch_bob

    This was about the same time they were repealing the Glass-Steagel Act in the U.S. And just like the U.S. banks the Euro banks are requiring bailouts. Makes you wonder if it was all planned (you can steal a lot more money with a smile and a briefcase than you can with a mask and a gun).

    • paul_gs

      And it was Bill Clinton who repealed Glass Steagall, let’s not forget that.

      • ottovbvs

        And who in their right mind proposes actually re-instating Glass Steagall. It was repealed because it was obsolete.

      • ottovbvs

        “And it was Bill Clinton who repealed Glass Steagall”

        It’s a constant battle disproving your lies but just for the record it wasn’t Bill Clinton who repealed Glass Steagall, it was a Republican promoted measure (which the admin wasn’t out of sympathy with for the reasons I explained above). Viz.

        “The Gramm–Leach–Bliley Act (GLB), also known as the Financial Services Modernization Act of 1999, (Pub.L. 106-102, 113 Stat. 1338, enacted November 12, 1999) is an act of the 106th United States Congress (1999–2001). It repealed part of the Glass–Steagall Act of 1933, removing barriers in the market among banking companies, securities companies and insurance companies that prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company. With the passage of the Gramm–Leach–Bliley Act, commercial banks, investment banks, securities firms, and insurance companies were allowed to consolidate. The legislation was signed into law by President Bill Clinton.”

    • mannie

      But who stole the money? The banks, many of whom got cleaned out, or the Greek man-in-the-street and American sub-prime candidate who walked away from a mortgage after spending several years living beyond their means on someone else’s dime?