Rifkind finally spots the EMU bulldozer: Leading article

There was much sense in Malcolm Rifkind's speech in Zurich yesterday. The determination of a small group of countries to press ahead with European economic and monetary union (EMU) is, conceivably, a threat to Britain's real interests in Europe and, is, conceivably, a threat to the unity of the EU.

But what took him so long? It has been obvious for months now that, whatever the domestic political and social costs, France, Germany and a few others are bent on creating the "euro" by the end of the century. It is as if the Government - Kenneth Clarke apart - has been sleep-walking. (The Americans call it "denial".) In his last heavyweight pronouncement on the subject 10 months ago, Mr Rifkind tried to talk EMU into its grave. Then, he briefed that it was recognised throughout Europe that the project would be delayed or would collapse. We disagreed. Mr Rifkind now admits that it hasn't and it won't.

On the surface there is a world of difference between the Rifkind speech and the letter we publish today from six Tory grandees appealing to the Government not to burn its EMU boats. But, looked at another way, both statements share the same root anxieties: that EMU will happen; that Britain will not be part of it; and that nothing in Europe will ever be the same again.

To that extent, the Foreign Secretary's speech was not a Eurosceptic speech. There is nothing the Euro-sceptics would like better than that the EU should be split into a federalising inner core and an outer circle of "free-trading" states.

The Rifkind speech recognises that this may be an illusion: that, unless carefully handled, radical differences in degrees of political and economic integration between EU member states could shatter the European institutions and, conceivably, the European single market.

Unfortunately, Mr Rifkind has little to say about what, at this late stage, we can do about it. There is something forlornly familiar about all this. It follows the traditional parabola of our relations with Europe in the last 50 years. First, we say "that is silly and it can never work"; then, after a long pause, we say "how dare you do it without us?"

But Paris and Bonn would be wrong to dismiss the Foreign Secretary's comments as another piece of British bomb-throwing. At this late stage in its life, this Government's actions on Europe take two forms. There are those actions that are addressed exclusively to the Europhobic gallery of backbenchers and newspapers (such as Douglas Hogg's fatuous attempt to re-open the Florence beef deal). And there are those actions that are meant to address and influence real politics beyond the Eurostar terminal. The Rifkind speech was in the second category. It was, in a sense, a cry for help; an announcement that, after the nonsense of the beef war, in whatever time is left before the next election, the Government wants to talk seriously about the future of Europe.

History is repeating itself in a broader sense. The Franco-German determination to push on with EMU is rooted in nostalgia for the 1950s and 1960s when the European train forged ahead with only six carriages and without those miserable Brits pulling the communication cord the whole time. The economic arguments for EMU may be shaky but the political will behind the project is immense. Paris and Bonn, for their different reasons, are determined that British scepticism and the expected influx of new member states should not drown all progress towards European political integration. They want a hard core of member states, built around EMU, to keep the dream of political union alive into the new millenium.

Concern about the activities of this Franco-German bulldozer is not confined to Britain. Witness the Spanish government's statement yesterday that it was unthinkable that Spain should be left out of the single currency (and yet the present criteria make it unthinkable that Spain should be included). Italy, a founding EU member, is equally furious at being ordered into the European slow lane when it is clear from yesterday's French budget that Paris is itself resorting to creative accountancy to meet the EMU guidelines.

Our own view is one of genuine scepticism about the single currency; there are very serious unresolved democratic issues at stake, which its supporters blithely ignore. But, as Mr Rifkind's speech implicitly recognises, doubts about EMU are now largely beside the point. EMU, barring some unforeseen calamity, is going to happen. The urgent questions are: who will join and how will the EU manage relations between members of the single currency and non-members?

It is inconceivable that a future Conservative government would join EMU; it is highly unlikely that a future Labour government would join in the first wave, given the state of public opinion on the subject. None the less, Britain, as Mr Rifkind suggests, has a vital interest in shaping the terms on which the single currency is created. An EU divided between the Ins (running one monetary policy and, in effect, one economic policy) and the Outs (running disparate economic policies) is something unprecedented and hazardous, just as the Foreign Secretary warns. How will the various EU institutions deal with it? What safeguards can be taken to prevent the single market from being shattered?

The Government is right to raise these issues; other member governments ought to take the warning seriously. But the Government will not be taken seriously if it simultaneously continues to play to the Eurosceptic gallery by starting a second, unnecessary beef war.