Leading Article: The huge hole at the heart of Maastricht

TODAY, in a special 16-page supplement, we publish a plain English version of the Maastricht treaty. This is our contribution to a wider and better-informed public debate on the merits of British involvement in the European Union. Until very recently, strong passions about Maastricht were confined almost entirely to the political classes: MPs, journalists, leaders of industry, unions and the professions. Some who witnessed the midnight row between Kenneth Clarke and Lord Tebbit in Brighton last week reported that it threatened to turn into a saloon-bar brawl. But it is hard to imagine a brawl over Europe in any real saloon bar. Polls suggest that nearly one in three electors has no opinion on Maastricht. To most voters, politicians do not appear as Eurosceptics or Europhiles, but as Eurobores, eyes blazing, arms waving and spectacles trembling over subjects that move ordinary people far less than prices and taxes, law and order, the condition of comprehensive schools or the future of Radio 4. Arguments over European institutions and principles appear remote and irrelevant. If your business is facing bankruptcy or your family eviction, John Major talking about 'subsidiarity' sounds about as pertinent as Marie Antoinette talking about cake.

Black Wednesday, and Britain's withdrawal from the exchange rate mechanism, have begun to change that. Inside the ERM, abiding by Europe's rules, interest rates went up to 15 per cent and could have gone higher. Outside the ERM the rates came down to 9 per cent and seemed likely to fall further. These are effects that people can quantify - to hundreds of pounds a month in their mortgage repayments. Suddenly, they ask: what is Europe and what is Maastricht all about?

John Major tries to convince us that it is about nothing very much: 'We are British citizens,' he said last week, 'and we will always remain British citizens.' Well, yes. But we are also, under Maastricht, citizens of a European Union ('union' being a word that rarely occurs in cabinet ministers' speeches). What does that mean? As British citizens, we have some idea who makes decisions; we can watch ministers, in Parliament and on television, explaining them; we know that, in theory at least, our MPs can get the decisions changed and that, once in five years, we can dismiss them. But who are the European decision-makers? And how, as European citizens, do we influence their decisions?

Even a plain English version provides no easy answers. Sometimes, the European Parliament has a right of veto; sometimes a right of amendment; sometimes a right only of consultation. The Council of Ministers must be unanimous on some matters, needs only a two-thirds majority on others. The truth is that there is a hole at the heart of Maastricht. And the hole is where a federal European government, properly accountable to an elected European Parliament, ought to be. Many member states want such a government; it is not there partly because British politicians - jealous not so much of the people's sovereignty but of the sovereignty of Westminster and Whitehall - have done everything possible to prevent it.

A federal government need not be all- powerful; there is nothing that would compel it to behave as British governments have behaved towards their regions and local authorities. Indeed, a federal body, with precise but limited powers, subject to clear democratic control and scrutiny, may prove less inclined to meddle and to expand than the present unaccountable and, to most EC citizens, mysterious Brussels machine.

BRITISH politicians who claim that they are resisting centralisation are evading the real issues. Free trade requires some common environmental, employment and consumer protection standards. Otherwise, multinational companies will locate in the country where employment costs and overheads are lowest. Other countries must then either restore tariff barriers or lower their standards, thus, in effect, allowing the multinationals to dictate minimum standards. The question is not whether Brussels is taking more powers than it ought but to whom it is accountable for the powers it does take.

The same principles apply to monetary policy. Devaluing the currency is just another way of undercutting your competitors. Other countries must either respond in kind or put up the tariff barriers to counter the cheaper goods. This is why the exchange rate mechanism was established; this is why Maastricht sets out a road to monetary union.

The treaty envisages moving monetary power to a European Central Bank. And here there is no ambiguity. The Bank will determine interest rates and the supply of reserves. It will give 'necessary instructions to national central banks'; it can even fine businesses that fail to comply with its regulations. But there is no corresponding precision about the powers of the EC's political institutions to determine economic policy. What if there is a need, as there is now, for Europe- wide reflation? What if one part of Europe - and it could be Britain - becomes locked, because of deep-seated economic weakness, into long-term decline? If it can no longer devalue its currency to make its goods cheaper, must it reconcile itself to ever-increasing unemployment until its population is driven to starvation or emigration? The Council of Ministers has the power only to 'monitor' national economic policies and to 'make recommendations' to member states; when 'severe difficulties' arise, it 'may grant emergency financial assistance' (italics added). And the Parliament is only informed or consulted on these matters.

Sooner or later, the governments of Europe - and particularly the British government - must face up to the vacuum at the heart of Maastricht. Either the Union develops a federal government with federal powers or it collapses. And when the British government accepts that reality - and stops hiding behind the muddled compromises of Maastricht - that will be the moment for a referendum.