- The Washington Times - Wednesday, January 9, 2002

WINCHESTER, Britain. — The common European currency may have made its New Year's debut on the continent to much fanfare, even elation, but you won't find many euros floating about this part of the world, at least not yet. In Winchester, the ancient capital of Hampshire (and once of England), the last time anyone used common European coins, it was the Roman soldiers, about, say, a millennium and a half ago. There seems to be little interest in making further acquaintance with this latest continental flight of fancy. Here, the British pound remains proudly and solidly ensconced, which is surely typical of the British as a whole. Much as the Labour government of Prime Minister Tony Blair would like it otherwise, views will have to change a lot before a popular referendum on the euro will yield a positive outcome. (For Mr. Blair to call a vote without being absolutely certain of the outcome is just about inconceivable.)

Which is not to say that shop-keepers across Britain have found nothing to commend in the new European currency. "We Accept Euro" advertises shiny blue stickers in the windows of the Marks & Spencer's store in Winchester's High Street. A number of shops do, and some have become quite creative in their exchange rate calculations. As the British media sent reporters out with pockets full of euros to spend, prices were found to vary wildly. The official Bank of England exchange rate was 1.63 to the pound on Jan. 1, but payment in euros was always more expensive, at times much more. The tabloid newspaper The Sun found prices being hiked by as much as 320 percent. Paid with the European currency, a piece of Cadbury's chocolate surely a must for any visitor to Britain rose in price from 1.25 pounds to the equivalent of 2.21 pounds. A London cab fare rose from 10 pounds to the equivalent of 15 pounds to cover the costs of currency conversion, the helpful cabbie explained. The Sun itself went from 30 pence at the bookstore WH Smith to the equivalent of a whopping 1.26 pounds.

Politicians in both Britain and Denmark, which last year rejected the euro in a popular referendum, believe that once euro bills and coins begin circulating extensively, carried across the continent by tourists from neighboring countries, popular antagonism will evaporate. Said Peter Hain, Britain's minister for Europe, "I doubt in the end that we will be able to run a sort of parallel currency economy. I doubt that, but time will tell." While politicians are in favor, however, in both countries, popular opposition to the euro reflects deeply held reservations about European federalism, of which the common currency is a major visible symbol.

As Christopher Fildes notes angrily in the London Spectator, "the notes and coins amount to no more than a much-needed relaunch for the euro. They do not amount to any sort of argument for joining… .The most insidious argument has always been that Britain is somehow fated to join, whether we like it or not but if we do not like it, no power or spurious predestination can make us accept it." True indeed.

It is also a fact, however, that the EU countries outside the eurozone, Britain, Denmark and Sweden, which has not voted on the euro yet, are the exceptions rather than the rule in Europe. Americans whose sympathies lie with the Anglo-Saxons will find their perceptions rather skewed if British reluctance to join is interpreted as somehow auguring the failure of the currency. The euro is here, it's a reality, and it is backed by 12 affluent European economies representing 300 million people most of whom received their new banks notes cheerfully and without any trouble on Jan. 1. Granted, the euro has not exactly performed impressively on the currency markets against the dollar since its introduction, but given that Europeans primarily trade among themselves, this has not been a major problem. In fact, it has helped drive up European exports to the United States.

Not so long ago, the discussion of the common European currency in the United States carried overtones of barely contained hysteria, and the reactions of some commentators still do. I recall one particularly heated discussion a few years back with a colleague who predicted cataclysmic unemployment and the re-emergence of European fascism as a result of the euro the reason being that the existence of a European Central Bank would eliminate the power of national governments to manipulate monetary policy to spur employment (a practice that, by The euro is here, it's a reality, and it is backed by 12 affluent European economies representing 300 million people most of whom received their new banks notes cheerfully and without any trouble on Jan. 1the way, used to get European economies into dreadful bouts of inflation in the 60s and 70s). If such trouble is in the future, the staid, middle-aged, well-fed European populations have shown no sign of it so far.


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