How to both support and oppose the euro at the same time

Vince Cable and Nick Clegg

One of the things that did for the Liberal Democrats in the general election campaign was their inability to explain their position on the euro. They were widely and generally accused of proposing that Britain should join the euro, at the same time that the eurozone is in economic crisis. Madness, supposedly educated opinion said.

You can see it here in fair-minded criticism from Daniel Finkelstein and criticism from Open Europe. Channel 4’s normally sensible Fact Check Blog took an interest in this issue (as though an intention could be fact-checked in the same way as a statistic) and Clive Anderson, on the BBC election night programme, described Nick Clegg as denying the euro before the cock crowed. Truly, the Liberal Democrats had a problem.

Their narrative should go like this.

There are long-term potential benefits from membership of the euro. British businesses will be able to cut costs if they can operate in the same currency as their major trading partners. British consumers will see wider choice and lower prices. Anyone who borrows money, including notably the government, can expect lower interest rates. These are all valuable long-term benefits.

However, to get those long-term benefits, there is a short and medium-term programme of reform needed. We have to get our deficit under control, and we have to be able to agree a permanent exchange rate for the pound against the euro. (The problems in Greece arise from not having got the first of those two right.) The British economy is in such a mess right now [thanks to Labour’s mistakes], and the eurozone is in such difficulties too, that there is no chance of Britain joining the euro in the next parliament.

The fact that the Conservatives want to raise the euro as an election issue shows not that we [the Liberal Democrats] are obsessed with Europe, but that they are obsessed with Europe. Any opportunity to pick a fight, even or especially where no fight is needed, is an opportunity they will take. We need to work constructively with our European partners, but despite outward appearances, the Tory party still does not get it.

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