The smart way out of the Euro debate

Citation

(1999), "The smart way out of the Euro debate", European Business Review, Vol. 99 No. 3. https://doi.org/10.1108/ebr.1999.05499cab.005

The smart way out of the Euro debate

Edited by John Coleman

Editorial

The smart way out of the Euro debate

David Birch is writing again about electronic money. He shows how extensively Europeans are moving from notes and coins to electronic money. The remarkable thing is that they seem almost unaware of the implications of what they are doing. In a Mori poll published in The Times on 25 February two-thirds of those questioned thought that they and their children would be using Euro notes and coins by 2010. The reality is that for most of their transactions they will be using neither by that date. Notes and coins will seem a little out of date. Smart cards will have taken over.

It is surely quite absurd that governments should not only be spending vast amounts of taxpayers' money on making new notes and coins but also forcing companies into preparing for the new notes and coins ­ altering vending machines and so forth ­ when all the necessary changes could be cheaply and painlessly met by smart cards. Those in Euroland should simply have a fixed exchange rate between their old currencies and the Euro. Those outside would have a floating exchange rate and if they decided to join they could do so with the minimum of fuss. This would also make it much easier for Eastern Europe to join the Euroland without having to leap straight into EMU, thus presenting the possibility that they may look and not leap, and leave Europe divided once more.

Another fear that many sense is the likelihood of the Muslim world taking the place of the old Soviet Union as the Western world enemy. Arms industries and other sectors of the West's economy, which drew their livelihood from the East-West conflict, might find the prospect extremely attractive. It is already being suggested that the West should be preparing for the unknown enemy that might appear at any moment in some small country or from some unexpected quarter. Iraq is just one prime example. It is not too hard to find enemies. If we are not extremely careful we may well move almost unwittingly towards a revival of the old historical conflicts between Christianity and Islam.The present concern of the West lays stress on a politically correct interpretation of human rights. It is all too easy to condone some aspects of our enemy's social behaviour without being aware of how he perceives ours.

Thomas Ország-Land writes about a development that may have immense implications for relations between Europe and Russia and concerns the opening up of Russia's waterways for trade with Europe. Ország-Land characteristically has failed to perceive the enormous ecological implications of the project which could become an example for the rest of the world.

The report on the future of the European Bank raises a number of interesting questions which although seemingly remote from the interests of those not directly in banking, will impact on peoples' everyday lives in Europe. The prospect of a referendum on EMU must raise a sense of awareness that the outcome of the decisions of bankers play a fundamental role in shaping our everyday lives. In fact the whole question of what money is may confront us afresh as the debate on the Euro develops. Adair Turner in an earlier issue of this journal wrote that "... it still remains important to explore the arguments for and against EMU, both as the basis for deciding Britain's subsequent policy, and because a clear understanding of those arguments, and in particular of the arguments against, is the necessary basis of the design of policies most likely to make EMU a success." The opportunity for the British public to find out about the arguments against is now offered by David Owen's New European Organisation. Those arguments together with a new understanding of the significance of electronic money can transform all our deeply rooted ideas about the nature of money itself. In particular that national reserves form the basis of a currency's economic strength. It is possible in the future that electronic money will be issued by those who possess the real wealth of societies, via the goods and services that are actually wanted.