So reads a headline in the Sunday Telegraph Business News today. This is based on a survey of leading economists, and I think they may be right.
Four of the nastiest words in the English language are surely “I told you so”. They exude smug self-satisfaction. Yet in this case, and after years of heated debate, they are perhaps justified.
We sceptics have been arguing the case against monetary union for a dozen years. We said it was a political ploy, driven by hubris and ideology, and fraught with economic risk. The EU was not an optimal currency area. The euro would be vulnerable to asymmetric shocks.
Yet we were dismissed by the Europhiles (and by some in the Conservative Party) as reactionary, fuddy-duddy, hopelessly out of touch, missing the zeitgeist of the times, isolationists who failed to understand economics or globalisation. In retrospect I think we understood economics and globalisation rather better than the Big Brains in the Berlaymont Building.
I recall my first radio debate as a euro-candidate, in 1999 at BBC Radio Leicester, up against Northamptonshire Labour MEP Angela Billingham (now ennobled – I always thought she looked rather like a ship in full sail, with her assistants bobbing along behind her). She argued that the euro was inevitable. It was progressive. It was the future. She understood, she said (she was extraordinarily patronising) the fearfulness of elderly people faced with change, but fortunately (she continued), young people embraced the euro as they back-packed to the delights of Prague and Krakow. I was able to cut her off at the knees with some very up-to-date opinion research showing that young people were, if anything, more sceptical of monetary union than their parents. This is surely an example of “The Wisdom of Crowds” – the instinctive common sense of ordinary people was right, where the careful and sophisticated analysis of the technocrats was wrong.
It has not been an easy decade for sceptics. For much of the Noughties, the euro seemed to be doing quite well. “Where are the disasters, the asymmetric shocks you promised us?” demanded the Europhiles. As we see, they’re here, and they’re now. There are parallels here with the Soviet Union. For the euro in the Noughties, or the USSR in the Seventies, we knew intellectually that they were unsustainable and could not last, yet in our hearts we doubted. Both the euro and the USSR managed to exude such an aura of permanence and inevitability. Yet the USSR has gone, and the euro is going even as we speak. Both sought to impose centralised technocratic solutions on the hearts and minds of disparate nations. Both failed.
Cameron and Hague are right to point out that the potential collapse of the euro, and the political upheaval that will follow, in our largest trading partner, are not going to be good for Britain either. There are tough times ahead, which will challenge the coalition and especially George Osborne. Yet our ace-in-the-hole is an independent currency. There may be trouble ahead (as the song says), but nothing like the trouble we’d see if we were in the single currency. For that, if for nothing else, we have Gordon Brown to thank. And we sceptics must not let the chaos ahead sully our satisfaction at such a clear vindication of our long-held position. We were right, and we stuck to our guns even when it seemed unfashionable.