Quotes of the Day
Tony Blair usually gets what he wants, as befits a Prime Minister who has led his party to two landslide victories and holds a 165-seat Commons majority. When Blair feels strongly about an issue, opposition M.P.s, Labour backbenchers, even Cabinet ministers with a slightly different viewpoint are left gnashing their teeth as the Downing St. juggernaut powers by — as it recently did on war with Iraq. Why, then, is it Blair who is now standing by in scarcely concealed frustration, impotent to lead Britain into the single currency, and thus to the more central role in Europe he so passionately desires?
The bold wartime leader (the U.S. Senate has voted to give him the Gold Medal that is Congress's highest honor) looked like a garden-variety politician scrambling out of a tight spot last week, as stories gushed out of Whitehall saying Blair had once again crumbled under pressure to postpone a euro referendum, probably to 2005 or beyond. Subsequent leaks hinted the vote could be earlier — which was spin designed to keep the pro-euro campaigners Blair has been stringing along since 1997 from despairing and cutting off euro campaign funds. To hose down fevered accounts about the volcanic feud between Blair and his longtime ally/rival and euroskeptic-in-chief Gordon Brown, the Chancellor of the Exchequer, Downing St. had to promise a specific date for the decision — June 9 — and declare that other, pro-euro Cabinet ministers would get their say too, as long as they first digested 2,500 pages — 15 kg — of economic analysis. And so a bold move that could have boosted the whole European econ-omy has been buried, at least for now.
Officially, the decision will hinge on whether the euro passes five economic tests hastily devised in the back of a Washington taxi by Brown and his chief aide Ed Balls in 1997. These range from whether business cycles and economic structures in Britain and on the Continent are converging to how joining would affect inward investment. Inherently subjective, they were really a way to buy time when the new Labour government was not yet ready to risk a referendum, and when the Conservatives were so torn about Europe that prolonging the decision just gave them more chances to implode.
But time's up, and the tests, so supple at birth, have hardened into a vise — with Blair locked in the middle. He badly wants to join, for essentially political reasons. He has famously declared that "Britain's future is inextricably linked with Europe; to get the best out of it, we must make the most of our strength and influence within it; and to do so, we must be wholehearted, not half-hearted, partners in Europe." But unless the economics work, he knows he can't persuade voters to cede a chunk of fiscal sovereignty to a multinational committee in Frankfurt. Economists differ about whether the tests have been met; very few would argue that all five have. But as a political matter, trying to sell the virtues of jumping into the euro zone is hopeless right now, not only because of lingering rifts from the Iraq war but because much of Europe is teetering on the brink of recession, with growth and unemployment rates significantly worse than Britain's. The U.K.'s continually solid economic performance has been one of Labour's great bedrocks, and Brown has no desire to risk that. Neither do voters: polls regularly show that about two-thirds want to keep the pound. Blair doesn't want to take the vote to the people until he can win — plunging into a losing referendum fight now, he believes, would be disastrous.
The brooding, complex Brown hungers for Blair's job with a Shakespearean avarice; Conservative leader Iain Duncan Smith calls their squabbling a "pantomime" that skews government policy to serve their ambitions. But at bottom they both know they must hang together or hang separately. This does not resolve the catch-22 Blair has been facing since the five tests were concocted: if the economics look bad he can't campaign; if he doesn't campaign the poll numbers won't move; if the poll numbers don't move, his allies lose heart and the chances of ever winning a referendum dissolve.
So on June 9, Blair must acknowledge the euro is off for now while still managing to juice up its supporters — a balancing act that is getting old. Mark Leonard, director of the Foreign Policy Centre in London, a think tank with close ties to Labour, says that "six years of warm words but no action have left Blair with a big credibility gap, both on the Continent and with the pro-European movement here." The Conservatives sense an opportunity to turn the tables on Blair. His tactic has been to paint them as ideological extremists who focus on the euro but really want out of the E.U. altogether.
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If Blair now cranks up his support for the euro even as Brown deems the economic tests unmet, the Tories will try to tar Blair as the ideologue. And events are delivering a powerful hammer for pounding that point home: the European Convention, which next month will propose ways to revamp European institutions. Euro-skeptics are already portraying the convention as a cabal of creeping federalism. Last week the tabloid Sun published a poll showing that 81% of Britons don't know a new European treaty is being considered; when informed, 84% want to vote on it.
Blair won't permit a referendum; it's the last thing he needs. But opponents think the refusal leaves him vulnerable to charges of arrogance — which not only Tories are making. Clare Short, his longtime International Development Minister, quit the Cabinet last week to protest the U.N.'s marginal role in Iraq, but blasted Blair for issuing "diktats in favor of increasingly badly thought-through policy initiatives." To British voters, arrogance and Brus-sels are intertwined — yet another trap for Blair.
And even if somehow, sometime, they could be persuaded to vote Britain into the single currency, the process of joining would be awkward on both sides. "Britain might be a source of considerable friction in the euro zone," says Daniel Gros, director of the Centre for European Policy Studies in Brussels, because of its free-market ways and likely disdain for euro-zone norms. In this forest of difficulties, the euro at least has one unquestioned virtue. It gives Blair proof of the oldest adage of politics: be careful what you wish for.
- J.F.O. McALLISTER
- The euro may be dead in the U.K., but it's already a business reality