October 3, 2011
When the EU expanded from 15 to 27 countries between 2004 and 2007, it was presumed that the newest members would go the whole hog and join the euro in due course. In fact, it was written into the terms of the accession Treaty they signed at the door on the way in.
That was then. Now, several non-Eurozone members are getting cold feet. It’s not, say diplomats, that countries like Poland and Bulgaria have lost faith in the currency, but they are uncomfortable about the erosion of fiscal independence. The fiscal and politican union that may emerge from the ongoing currency crisis is not what they signed up for.
At the same time, there is great anxiety among EU countries outside the eurozone that the nature of the Union is being altered without their input. Poland, which still says it will join the euro when the time is right, wants a seat at the table when the Eurogroup meets.
Meanwhile, smaller countries like Lithuania, Latvia and even Denmark are beginning to wonder whether they will effectively be forced to join the single currency or risk isolation on the edge of a more integrated Eurozone.
UK needs the Eurozone
Even UK officials are vexed at the relegation of non-Eurozone members to the second division. Major decisions which affect London, on a financial transcactions tax, for example, are debated between Sarkozy and Merkel.
David Cameron has the painfully delicate task of demanding to be at the table in Brussels while an anti-Euro rump of his own party gleefully watches the euro circling the drain – as though the currency’s demise wouldn’t affect the wise Europeans who use Sterling.
UK diplomats know London’s sense of splendid isolation is grossly misplaced. Ireland imports more from the UK than Brazil, Russia, India and China combined, and Europe’s single market is the destination for most of Britain’s wares. But try telling that to Tory MPs who want a referendum on EU membership.
Gary Finnegan writes the EU View column in Business & Finance magazine, a Dublin-based publicationAuthor : Gary Finnegan