f there is one thing that is clear about Britain’s
Europe policy today, it is that it is in a right mess. Most
spectacularly, the Blair government’s policy on Iraq – first
loudly backing the Bush administration as it prepared for
a military strike, then attempting and failing to secure
United Nations backing for an ultimatum to Saddam Hussein,
then playing a major supporting role in the US-led invasion
that toppled Saddam – did serious damage to Britain’s
relationship with the two most important countries of the
European Union, France and Germany, both of which opposed
How lasting that damage will be is another matter, however.
The French and German governments were opposed to military
action against Iraq for different reasons – the French
out of Gaullist hostility to American unilateralism, the
Germans out of social democratic respect for international
law and a tendency towards pacifism – and neither has
any long-term interest in stoking up antipathy to Britain.
Unless George Bush decides to extend the treatment given
to Iraq to, say, Syria or North Korea, and unless Tony Blair
backs him again, Britain’s relationship with the big
hitters in the EU will return to normal. Already, it’s
back to business as usual in the Convention on the Future
of Europe, where Britain and France are pushing hard (and
together) for an intergovernmentalist settlement, against
the federalism of Germany and the smaller EU countries.
The unlesses of the UK-US relationship are important, but
at present the signs are that the US military will be tied
up in Iraq for some time to come (as Martin Woollacott argued
in an excellent piece in the Guardian) and that the British
government is not keen on more military adventures for a
Jack Straw’s denials that any other invasions are planned
are of course worth taking with a pinch of salt. But the
recent revelations that he and Blair would have resigned
if the backbench Labour revolt on Iraq in the Commons in
March had been only a little bigger suggests that they might
have learned a little in the past few weeks about the extent
of opposition to their uncritically pro-American policy.
I have a sneaking suspicion that their doubts about joining
a madcap neo-conservative crusade will from now on prove
But we shall see. The end of the war in Iraq – which
was a remarkable military success, whatever its political
ramifications – turns the spotlight on other aspects
of Britain’s European policy, in particular the euro.
And here the picture is anything but optimistic. Disagreements
at the highest level on the euro, most notably between Tony
Blair and Gordon Brown, appear to have come close to paralysing
the government – and as yet there is little sign of
In early April, nearly all the broadsheet newspapers carried
reports, inspired by briefings from sources close to Brown,
that the chancellor would soon declare that his famous five
tests for British entry into the single European currency
had not been met, thereby effectively (though not explicitly)
ruling out a referendum on the euro for the rest of this
At the end of April, however, a seemingly authoritative
piece by Will Hutton in the Observer claimed that Blair had
to shift Brown from the Treasury to the Foreign Office in
order to clear the way for a euro referendum next year.
That would be a massive gamble for Blair. Brown is a big
figure in the government, the architect of its overall strategy
and for many years the favourite to succeed Blair as Labour
leader (and prime minister) if Blair decided to go. It is
not implausible to suggest that Brown could send the government
into terminal crisis if he decided to resist Blair over-ruling
or moving him.
Then again, it is difficult to see how Blair can regain
credibility in Europe unless he overcomes Brown’s opposition to
joining the euro – and, given the apparent strength
of Brown’s opposition, it is hard to see how Brown
could remain as chancellor after being forced to eat humble
So Hutton’s interpretation has a certain credibility
to it. Nevertheless, there is a simple way out for Brown
that has been given scant consideration by the commentators – which
is that some time in the next month or so he announces that
the five tests have been passed.
Such a scenario is also just about feasible. Although Brown
has been quite happy for his political allies to tell journalists
that his line on the euro is "not yet", he has
not committed himself publicly to this position.
He still has the option of endorsing British membership
now. The anti-euro lobby would feel horribly let down – but
the political impact would be extraordinary.
Once again, we shall see. But if there is a euro referendum
soon, under any circumstances, it will be a tough battle
for the government to win.
The pro-euro camp has spent the past few years waiting
for the go-ahead from Blair, and is not in good shape: if
referendum isn’t announced soon, Britain in Europe,
the umbrella group that will be the basis of any "yes" campaign,
To make matters worse, there has been a serious decline
in support for the euro among trade unions, which will be
of the crucial elements in any "yes" campaign.
Anti-European leftists have won key positions in several
major unions in the past couple of years, and John Monks,
the most articulate of the pro-euro trade union leaders,
is leaving the TUC. Labour movement support for Britain joining
the single currency will be in rather shorter supply than
five years ago.
Yet joining the euro remains the best bet for a social
democratic future for Britain. It is true, as Gordon Brown
the EU’s system of economic management needs to be
reformed, particularly when it comes down to the idiotic
growth and stability pact, which effectively rules out counter-cyclical
state spending. But here we are pushing at an open door:
the rest of Europe, social democratic, Christian democratic
and neo-liberal alike, realises that the regime of enforced
austerity imposed by the Bundesbank and subsequently endorsed
by the governments of Europe as the price of monetary union
was a big mistake. Faced with low growth and rising unemployment,
the governments of Europe recognise that John Maynard Keynes
had some bright ideas after all.
If Blair does not go for a euro referendum this parliament,
he will have missed the best opportunity any British government
has ever had to define Britain’s place as a European
social capitalist country. The next few weeks will be absolutely