In or out of Europe?

The government's proposed referendum on Britain's EU membership won't be about whether to stay in a new and improved Europe, says Merryn Somerset Webb. The Europe on offer will be exactly the same as the one we have now.

So, there is going to be an in/out referendum on the euro, or at least on an as-yet-undefined "new settlement" with the eurozone. Thanks to the ongoing European crisis, says David Cameron, Europe is "changing". We need to talk about "its future and Britain's place within it".

And we need to find a way for our relationship with Europe to be "focused on competitiveness, fairness, respect for national democracies" and for everyone involved to allow "powers to flow back to states". Politicians are well known for their tendency to live in their own little fantasy lands. This is a fabulously stunning example.

Have you ever known huge, bureaucratic and powerful organisations voluntarily to return rights to those they technically serve? It just doesn't happen. That means, I think, that in the end, the decision won't be about being in or out of some kind of New Europe. It will be about being in or out of the very same Europe we have now.

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How will you vote? I know one man who has no doubt at all. Bernard Connolly has just reissued his mid-1990s cult classic, The Rotten Heart of Europe the writing of which lost him his job at the European Commission, landed him in court and (in the only upside) had him hailed by the small gang of eurosceptics around at the time as something of a prophet. They were right.

Everything he forecast about the disaster inherent in the "crippling monetary straitjacket of the euro" has come about. Now we have only to wait for the social breakdown that will surely follow it.

Most commentators have begun this year believing the crisis in Europe is no longer as severe as it was. "Last year's sense of panic is gone", says a headline in the FT about the atmosphere at the self-promotion shop that is Davos. Really? Maybe for rich bankers and CEOs of the world's biggest corporations. But is it true for the 25%-plus of the working age population in Spain that can't find a job? Or for those who have one but know the grand European plan is for their living standard to be "internally devalued" until they are more competitive?

And is it true of the families of the hundreds of people committing suicide in Greece every month (up 30% last year alone), or the many thousands who queue at foodbanks across the country every day? I bet they are still feeling regular panic.

Since nothing has changed for the better for the people of Europe, says Bernard, the union needs to be seen for what it is. "No one who has observed the way in which the malignant lunacy of the ERM (exchange-rate mechanism)and monetary union has destroyed jobs... companies... savings... financial systems... lives... society and... democracy, all in the name of the right of Europe to arise, can doubt for one moment that the endeavour has been, in its effect if not always in intent, not simply misguided, but evil."

Look out for my full interview with Bernard in next week's magazine. There'll be plenty to think about in it.

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.