David K. Smith says the European constitution may not be dead in the U.K., but that won't be enough to bring the euro across the channel.
How will the constitution referendum go? Until recently, the general view was that voters would overwhelmingly reject it, scared by talk of a giant step towards a federal Europe. However, recent polls conducted on the basis of the actual question that will be asked in the referendum have suggested a pretty evenly split vote...
Would not a “yes” vote on the constitution enable an emboldened Blair to go for “one more heave” into the euro?..
It could happen, so that by the end of the parliament Britain would have both signed up to the constitution and be happily ensconced in the single currency, the European Central Bank (ECB) taking our interest rate decisions.
But that seems unlikely, for several reasons. The first is that to secure a yes vote in the constitution referendum, the government will have to provide certain reassurances. One of those, most probably, will be that backing the constitution will not mean a rush into the single currency. Any suspicion among voters that this is the case could easily swing it towards a no vote.
Secondly, hostility to the euro goes deeper than to the constitution...
... There is now an implicit understanding amongst a large swathe of voters that adopting the euro means more than changing the currency you carry in your wallet. People are aware of the fact that Euroland appears stuck with slow growth and high unemployment. This many not be the fault of the euro and the ECB, but it is a reality, Voters may also be dimly aware that the euro’s fiscal rules, embodied in the stability and growth pact, have been flouted by Germany and France, and may never achieve credibility again...
As far as the chancellor (who was once a believer) is concerned, that requires two things. One is a belief that the ECB and stability pact would be at least as good as his own fiscal rules and the independent Bank of England. He is a long way from believing that.
The second is that Europe is serious about increasing its flexibility, particularly in labour markets. A recent report by a high level group of experts under the chairmanship of Wim Kok, the former Dutch prime minister, concluded that this is far from the case, and that the EU is proceeding at a snail’s pace in this area. And as long as that is the case, the euro is off the UK agenda.