In the run up to the Euro I was invited to various meetings and even dinners with senior Germans. They thought that if they explained to me the inevitability of the Euro and the alleged joys of more European integration I would see their point and change my mind. These events always started very amicably, with my hosts praising part of the UK’s democratic traditions and past and even finding good things in what I had said and written. As the meetings wore on the Germans usually switched to empty threats and silly menaces, claiming the UK would lose all inward investment, would become poorer, would be sidelined and ignored if we dared to stay out of the Euro. The more I heard the German case, the more threadbare it seemed. They dreamed of a Euro that allowed them to trade in a devalued currency, whilst not accepting the need to send transfer payments to the parts of the zone that were going to lose out and experience high unemployment.Time passed, and events did not turn out as the Germans forecast.
In the run up to the UK referendum I once again find myself in discussion with senior Germans, though not over dinner this time. During the course of a short interview or other public exchanges again the German position vacillates weakly between charm and threat, between reassurance and empty menace. Our trade is not at risk, as the German government has made clear. Whatever happens in the referendum the UK is not about to take her trade deficit somewhere else. We will carry on buying German cars and machinery. In return Germany will carry on buying about half as much from us as we buy from them, on current or similar terms, because it makes sense for her to do so. It is odd to go round threatening the customers with interruption to supply when you have plenty to sell. The German government is wise to take a more sensible pragmatic view of the UK’s wish to have a different relationship, not joining in the political union and is sensible in saying they want a trade agreement if all else fails.
The EU was for many years led by Germany and France acting together , as equal partners. I had this explained to me by a former French Minister one day when having lunch with her prior to an EU Council. Their two domestic governments have a habit of close working, their politicians meet or discuss the upcoming council agendas prior to the meetings, and there is a common Franco German plan on many matters. This relationship has been weakened by the arrival of Mr Hollande, who is now the junior partner to Germany, with less good co-operation at the top, though the two governments still remain closely linked at all other levels.
It was always difficult to see how the UK could have influence or shape the Union even before the Euro. Our view of a trade agreement, with political co-operation on a limited range of issues where all sides wanted it, was always being undermined by a massive legislative programme, and by progressive removal of powers from national democracies by treaty change and by new laws. It got a whole lot more extreme when most of the others joined the currency union.
As the Euro is now driving much of the need to integrate government further, it is difficult to see that the UK can pretend to be a full member of the EU any more. Of course we were right to keep our currency. We are now right to demand other parts of our democracy back that have been surrendered, as they are not necessary to protect our trade. Of course the Euro now creates the need for a political union. Every currency needs a country to love it, and taxpayers and a government to back it. The UK is correctly not in the Euro, so it should not be part of these arrangements for much closer union.
It is difficult to see why the UK should have to pay a bigger contribution to the EU because our economy is growing faster than Euroland. The EU penalises success, when we wish to reward it.