TODAY is a big day for Europe’s beleaguered single currency.
The leaders of the eurozone’s 17 member states are due to meet to clinch a deal, at least in outline, that is meant to put an end to anxieties about whether nations like Greece, Portugal and Italy will default on the bonds, thereby triggering a fresh banking crisis.
Some in the financial markets were exhibiting frayed nerves yesterday after a meeting of Europe’s finance ministers was cancelled, seeing the cancellation as a sure sign that all was not well with the negotiations.
Other commentators though saw the cancellations as nothing more than tidying-up procedure. It was merely the finance ministers giving precedence to their governmental bosses by allowing them to make the big announcements and claim the credit when they meet today.
While France and Germany have been at loggerheads over aspects of the pending sovereign debt deal, it is hard to imagine that either nation would countenance walking away from today’s summit without having struck the sort of deal that will resolve matters once and for all.
The European project is too important to them – as is the euro. Not just for economic reasons, but for profound political reasons too.
Unlike Conservative backbenchers, mainstream European politicians are deeply committed to the integration of Europe. So much so, that it is almost inevitable that the ultimate outcome of the anxieties and crises of recent months will be a move to more closely integrate eurozone public finances.
Nations will be asked to give more powers to a centralised European authority, perhaps the ECB, to control government spending within tighter fiscal limits than have been followed by Greece, Ireland, Portugal and Italy in recent years.
You can’t have a single currency without a strong, single fiscal authority overseeing public finances of the currency zone.
That, however, may mean it is less likely that Britain will ever join the euro, as I don’t see any government willingly giving up that degree of control over our finances.
TUC secretary general Brendan Barber incited the wrath of business lobby groups yesterday when he described them as pursuing a “fanatical right wing agenda” that was out of line with the real concerns of their, presumably more moderate, membership.
Mr Barber was responding to a government plan announced by Nick Clegg yesterday morning to limit the number of on site inspections for small and medium sized companies to two per year. The TUC boss is concerned that this could have implications for the health and well being of staff who work for SMEs.
Leaving aside the adjective, it would of course come as a surprise if business lobby groups weren’t right wing. Business makes most profit from a deregulated environment.
Clearly no amount of profit is worth putting a life at risk for. Our society must also be fair, meaning that employment protection needs to be in place to prevent discrimination and exploitation, though clearly some sort of balance has to be struck.
The TUC boss will air his views at a lecture tomorrow night at the University of Liverpool.
He will be challenging the government’s view that the public sector cuts are inevitable and launching his own alternative plan to solve the nation’s economic woes.
I’m certainly looking forward to the debate. I wonder which business groups will turn up?
