What happens if the euro slips in below the radar
Town & Country Planning,
May 2001
By the time this column hits the streets - or so I fondly imagine
- we will be happily splashing around in the middle of a general election.
This is more of a concern to me than most, because I will in those circumstance,
be putting myself forward as a potential MP to the extremely wise and
sensible electors of Regents Park and Kensington North. I will leave you
to guess which party I will be representing, but it's a good match for
the electors.
Nonetheless, apart from those people who greet you on the doorstep with
the words: "I'm not voting on principle", this will be of concern
to nearly everyone. Partly because it has some effect on the way we live
- or so it's said - and partly because we won't be able to turn on our
televisions for a month without watching every complex problem you can
think of reduce to fatuous simplification by parties and broadcasters
alike.
This may seem a sideways way of approaching the subject, but there is
no issue more simplified that that of whether we join the euro-zone.
It would be easy to assume from most of the coverage of what is laughingly
called a 'debate' that the world is being subsumed into a few very big
currency systems.
This is partly true of course. The euro may one day circulate from Aberdeen
to Ankara, and watch the way Latin America is swallowing the dollar to
ward off the attentions of the hedge funds and currency traders. But there
is another story to tell too.
The powerful trade arm of Japanese government, MITI, is in the process
of launching 40 new model currency systems - in the hope that around three
of them will succeed enough to provide a safety net for the Japanese soial
economy, which looks a bit green around the gills.
I know one Japanese province has already set up five different currencies
- including one based on the time bank system, using plastic tokens known
as DanDan ("I thank you very kindly").
The Japanese are interested in such matters. They must be: my pamphlet
entitled Why London needs its own currency is being translated into Japanese
even as I write. But there are around 2,500 local or regional currencies
now running around the world.
I know this because I've just been reading a fascinating book by one of
the former Belgian central bankers who first developed the euro, Bernard
Lietaer.
His new book The Future of Money puts the case for the emerging multi-currency
world, which he says is inevitable partly because of the distorting effect
charging interest has on the environment, because of mass unemployment
and because of the crisis of a rapidly ageing population.
It is mind-blowing stuff, and I thoroughly recommend it - especially his
calculation of how much of the $2 trillion that goes through the world's
computers screens every day has anything to do with world trade. The answer
is about three percent: 97 per cent is speculation.
What does all this mean for Britain and the euro? Well the 97 per cent
does imply that the world's currencies are not really designed for the
rest of us any more. Our cities and communities rely on the crumbs from
the rich men's tables.
But Lietaer was asked that question at a New Economics Foundation evening
at the Institute of Contemporary Arts a few weeks back? He said it means
that, if we go in, we must go in with another series of layers of other
currencies as well.
This has set me thinking about what happens if we don't embrace the euro,
which seems likely if you look at the polls. Because it seems pretty clear
to me that the euro will still circulate here, alongside the pound.
A number of retailers have already said they will accept euros in those
circumstances and many British suppliers to Europe look likely to be forced
to be paid in euros.
What does this mean for cities? The chances are it will probably mean
a slightly better balance between different sectors of the economy, using
varied interest rates to suit them best. But it may also mean the beginning
of a two-tier economy, emphasising the gaps between international companies
and local ones.
But then, maybe the companies receiving euros will also be able to pass
them on to their local suppliers and maybe even to their staff. I don't
know what this means in practice - but it does mean that the euro and
the pound can compete head to head, providing a choice that must be better
for many regions of Britain.
What we don't want to see is gleaming central parts of our cities that
accept euros, and draw in the Eurotrash with their bulging wallets, and
the increasingly dank and dingy pound zones. That's why two currencies
- the original John Major solution - probably isn't enough.
