I am honoured – and also delighted – to be giving evidence on the subject of the Five Presidents Report and the Communication on Completing Economic and Monetary Union.
Unfortunately, I am reminded very powerfully of the British political class’s reaction to the Maastricht Treaty in 1992: to paraphrase the celebrated comments from Bretherton at Messina – it won’t happen and if it does, it will just be a few states and that won’t matter much.
Following the timetable laid down in the Delors’s Report, a “three stage” process was launched in 1992 but the December 1994 decision in Madrid by the Heads of Government to start the technical preparations was almost completely ignored (or even ridiculed) by the British establishment because the EU was engulfed in an existential crisis – about exchange rate movements, including sterling.
In early 1995, I was honoured to be appointed by the European Commission to a Committee of Independent Experts to advise on the changeover to the euro. To general astonishment in Britain, the exchange rates of the currencies of 300 million people were 'irrevocably locked' in January 1999 and the notes and coins were introduced flawlessly for this vast number of people in 2002.
A decade and a half later, 340 million people use this currency – more than five times the population of the UK – and there is no dispute that the fate of the UK’s economy is 'irrevocably locked' to the fate of the euro.
We have had a series of “Presidents’ Reports” since 2012 laying out a fairly detailed plan for a major deepening – but now of “economic and monetary” union with a two stage process for achieving it – “by 2025 at the latest”. A group of independent experts is to be set up next year to plot out the exact details for Stage 2 that will begin in 2017.
Again, the British establishment – with the important exception of this Committee of the House of Lords, rather than the elected Members of Parliament – is ignoring the process because the EU is engulfed in an existential crisis – this time about migration. If the EU survives this crisis, then it has probably launched itself on a path to a genuine Economic Union, Financial Union, Fiscal Union and finally a Political Union to maintain the necessary democratic legitimacy of the new system.
As I listen to the political debate in the United Kingdom today about this 2-Stage process, I fear there is a clear risk either of actual Brexit soon, or de facto Brexit by “2025 at the latest”.
I look forward to your questions.