BRUSSELS, Belgium (AP) — The European single currency became a reality this weekend, a turning point in the arduous march toward a unified Europe. But fierce nationalisms still lurk beneath the surface.
Hopes that the meeting would launch a freer, less complicated and more prosperous Europe were fulfilled when the presidents and prime ministers of the 15-nation EU agreed upon the 11 participants for a new European monetary union and fixed exchange rates.
Also pre-eminent was the degree to which national interests and pride continue to play a role in the new Europe, with ugly squabbling over who should run the monetary union’s European Central Bank — a contest between sober economists from the Netherlands and France.
Creating a single currency means, of course, surrendering sovereignty. No nation is ever happy doing that. The tendency of governments is to amass power, not give it away.
In the case of the single currency, the 11 nations also are relinquishing powerful national symbols. A large majority of Germans oppose trading their mighty mark for a mushy idea called the euro.
Beyond symbols, governments also are giving up much of their power to influence their economies through monetary manipulation. Leaders will be obliged to coordinate their economic and fiscal policies more closely.
Tougher still will be harmonizing tax policies. Without that, the gravitation of business toward low-tax countries, already a striking phenomenon, will accelerate. Coordinating tax policy means losing the ability to use taxes to fight unemployment and other social ills.