Labour has welcomed the draft treaty on European
monetary union tabled by the Dutch presidency of the European Community this week, although it is rightly scornful of the ridiculous "get-out"
clause included only to help John Major avoid a massive schism in the Tory
Party. Labour believes that many of the points it has been arguing for have
been taken on board by the Dutch – most of all, an enhanced role for
Ecofin, the European Council of Finance Ministers, in overseeing the workings
of the planned European central bank, particularly in determining exchange
rate policy.
Tribune shares
Labour's enthusiasm for a single European currency. Much detail remains to be
sorted out, and the transition period in the run-up to European monetary union
will be difficult for a British economy weakened by more than a decade of Tory
mismanagement. But there is no alternative: the era in which medium-sized
nation states had the ability to exercise a substantial measure of control over
their economies is long since past, and the creation of a single European
currency is a precondition for the EC being able effectively to fill the
economic policy gap.
Labour is also right to argue that the European central
bank must be made politically accountable. Its role will be far too important
to be left to the European equivalent of Treasury bureaucrats. But Labour's
position does not go anywhere near for enough.
Giving increased powers of oversight over the
central bank to the EC's finance ministers is better than nothing, but it is
not as good as giving those powers to a select committee drawn either from the
national parliaments of the EC or, better still, from the European Parliament.
The European Parliament is directly elected in EC-wide elections, and is the
nearest thing we have to a democratically representative EC institution. There
is no reason that it should not oversee the European central bank just as the
United States Congress oversees the Federal Reserve.
