Skip to content

The Euro non-Revolution

Article by Tom Arbuthnott

September 15, 2006

The Euro non-revolution
By Tom Arbuthnott of The Foreign Policy Centre
In eight months’ time, the European economy will totally self-destruct, the stock market will crash and the cumulative savings of generations dwindle to nothing in the chaos of e-day.

Either that or Europeans will be looking forward to a bright new dawn of political stability as a Grand Historical Project moves on to its next inexorable step.

The political class is polarised by the prospect. But the public?

A recent survey on the impact of the euro showed that, by February 2000, 97% of people in the eurozone had not yet made any payments in euros.

Just a currency

When asked why this was, over 77% of these responded simply that they hadn’t needed to yet: why bother, when perfectly serviceable Deutschmarks were still available from the local cash machine?

Come January next year, the euro is no grand political project. It’s just a currency.

In 12 European states, it will be no more and no less than the way you buy your newspaper in the morning, your sandwich at lunch, your glass of Leffe in the evening.

After an initial flurry of unpopularity, as people get used to it, it will be depoliticised, merely functional to most people.

It will have an important psychological effect for certain people, especially for those who live near borders or who are used to internet and mail-order shopping.

Harmonisation pressure

People will find it much easier to buy goods from abroad, and to isolate the cheapest deals – the virtual monopoly that domestic tax regimes and shops wield over citizens’ habits will disappear.

This will initially be a small effect, but will grow, and exert a strong domestic pressure towards harmonisation on governments.

If one government (say, Luxembourg) offers preferential tax rates on a certain good (say, kumquats), there will be no reason for a company not to set up there and sell its kumquats online using direct price comparisons with the domestic price to ram the message home.

Governments, in setting policies, will have to compete for consumers just as much as companies already do.

Certainly, this will give definition to the European Union as a single political space.


The ability to compare domestic consumer prices with those in other countries will increase the perception of living in a single space.

Just look at the effect that comparisons of the price of fuel in France, Germany and Britain had in the UK in September 2000.

But the political pressure that results is exerted domestically, and does not lead to a desire for a whole new system of European government.

Despite the hopes of the European federalists, notes and coins are not that important. Currencies do not confer legitimacy on political institutions, even if they do create political spaces.

No-one will really care where the euro came from once it exists.

The same effect applied to the removal of passport controls at EU internal borders under the Schengen Convention, the last step-change in people’s lives engineered by the EU.

While undeniably helpful, especially for those crossing borders regularly, this added convenience has not manifested itself in a surge of support for the instruments of European integration.

Non-ideological notes and coins

When you’ve had to show a passport all your life, it becomes routine: when you stop, that becomes routine.

The only problem comes when you’ve got used to the convenience and then have the threat of having it reversed, as the Norwegians have recently been complaining.

Jurgen Stark, deputy governor of Germany’s Bundesbank, said last year: “The euro is an expression of the willingness and determination to achieve further integration.”

He was right, but only in a limited way, because this “willingness and determination” was expressed only by a tiny proportion of the population – the political elite in national governments and within the European institutions.

For most people the ideology of integrating Europe and the change in currency are separate issues – or will be once the crinkle of euronotes and the jangle of eurocoins becomes a reality.

    Related Articles

     Join our mailing list 

    Keep informed about events, articles & latest publications from Foreign Policy Centre