‘It’s very easy to be wise with hindsight,’ Nick Clegg this week told a BBC interviewer who had tasked the Deputy Prime Minister with his long-held view that the euro is a wonderful currency which Britain was crazy not to join. A cross-sounding Clegg went on to argue that ‘no one’ had envisaged that the eurozone might be in the plight it is today. This we can only describe as being foolish with hindsight.
Although it is true that no one forecast the exact circumstances of the crisis, one politician did set out with startling clarity the main reason why the currency was misconceived — and it cost him his job. I refer to Nicholas Ridley, who in July 1990 gave an interview to The Spectator warning of the explosive consequences of the loss of national economic sovereignty implicit in a single European currency. ‘There could be a bloody revolution,’ he warned those who bought the 14 July 1990 issue. Extreme as that might have sounded, the riots in Greece are an illustration of exactly what Ridley forecast if a population felt they were being told how they must suffer, by a power unelected by them (indeed, in the case of the European Commission, unelected by anyone).
The issue here is sovereignty, not economics (although the idea of Greece and Germany sharing the same currency was always an absurdity). Ridley himself had no problem with the idea of balancing budgets or privatising inefficient state enterprises — after all, he was one of Margaret Thatcher’s most faithful supporters in implementing exactly those policies. His point was that those imposing harsh measures have to be elected by the people on the receiving end. Or as he put it in his interview with me: ‘When I look at the institutions to which it is proposed that [our] sovereignty is to be handed over, I’m aghast… unelected reject politicians with no accountability to anybody, who are not responsible for raising taxes, just spending money, who are pandered to by a supine parliament which also is not responsible for raising taxes, already behaving with an arrogance I find breathtaking; the idea that one says “OK, we’ll give this lot our sovereignty” is unacceptable to me.
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