Friday 6 June 2003

The man who can't say "no"

It looks like the cabinet will say "no" to the Euro next week - for the time being. Tony Blair, of course, wants Britain to sign up for the new currency:
He has resolved that Britain should adopt the euro. He wants the "no" to sound like "yes" - and mean "yes". So the issue is therefore about how to keep the door ajar wide enough so that, no matter that the boffins have said "no, not yet", he can still say "yes - and maybe quite soon" - even in the lifetime of this parliament.
As Bill Jamieson says, for many of us joining the Euro would be a political issue at least as much as an economic one and the government will not discuss that point. Economic convergence has not happened and despite increasing red tape we still enjoy the benefit of a greater degree of flexibility in our labour market:
But it is not only Britain that will have to change. Labour-market inflexibility in the euro-zone is another major obstacle, and the timetable for reform is not in Mr Blair’s hands. That is why, if we are not adequately converged now, it is highly unlikely such convergence can be achieved in two to three years.
Exactly. Radical economic change is needed in the existing Euro-zone before we should even consider joining and there is no sign of that taking place:
GERMANY'S archaic labour laws are meant to protect those in work rather than those out of it. With close to 4.5 million people on the dole and recession looming, a humble taxi driver from Nuremberg has become the patron saint of businessmen seeking to reform the rules that are among the most mind-bendingly complex - and costly - in the world.

The case of Lorenz Pfatrisch is now quoted by the German Chambers of Trade and Commerce, the equivalent of the Confederation of British Industry, and the Association of Small Businessmen as the epitome of what is wrong with the world's third largest economy.

The sort of nonsense faced by Herr Pfatrisch is killing Europe's economy. We don't need more of it here.