The prospects for economic and monetary union are set to dominate European politics this year, as debate in many EU member-states turns on preparedness for the abolition of national currencies. It is a huge project, which has not yet received the detailed attention it deserves, including in this State. But as the scale and implications of EMU become more clear, and as its social and economic costs impinge more and more on citizens' lives, politicians are facing a greater need to justify it and to clarify their policies towards it. Simultaneously the flaws and shortcomings of the project come more clearly into view, revealing that a lot remains to be decided upon and that the model of EMU under discussion is by no means cut and dried. Last night's report that a deal has been brokered to allow Italy join EMU in 2001-2002 perfectly illustrates this process.
The Government, along with public opinion and major interest groups, are predominantly and decisively in favour of participating in the first wave of EMU. It is seen as consolidating the single market, underwriting stable and low interest rates and transaction costs and providing a position in the core group of EU states. Reservations attach more to the desirability of Ireland joining the first wave if Britain fails to do so than to the feasibility of the project as a whole, given the vulnerability of many sectors of the economy to movements in sterling. It therefore becomes all the more important to interpret which way Britain is likely to move.
It makes a great difference from Ireland's point of view whether Britain is likely to join the EMU project eventually, assuming it succeeds, or rejects it in principle. If Britain joins belatedly, then Ireland's interests would be best protected by joining the first wave rather than be classified once again as a dependent economy. If Britain rejects the project in principle Ireland is faced with a much more difficult choice, given the interdependence of these two islands.
The forthcoming British election should go a considerable way to clarify this question, as has become clearer in recent days. The Labour Party foreign affairs spokesman, Mr Robin Cook, has conceded that a Labour government would not be in a position to join in the first wave but that it would be difficult to resist joining by 2002 if the project was demonstrably working. It would then be in Britain's interests to do so. And one might add that by that time the deep-seated argument over Europe between and, within the major British political parties is more likely to have resolved itself one way or another.
Mr Cook's intervention has added much-needed clarity to the British debate on Europe.
Last night the British prime minister, Mr Major, returned to the theme with a broadside against the Social Chapter and a strong statement in favour of an enterprise model for the Union as a whole. "Our enterprise economy is not negotiable," he said. His, hostility to what he describes as the European social model puts him at odds with his conservative colleagues elsewhere in the EU and brings him close to rejecting the welfare state that has been a cornerstone of post-war politic's in the name of world competition. This puts more clear blue water between his party and Labour. It also emphasises the continuing deep divide about Europe, including EMU, in Conservative ranks, which would add to the uncertainty were they to be unexpectedly re-elected.