Leading article: EMU: an informed leap in the dark

Newspaper editorials, like other sub-species of journalism, rest on certain unspoken assumptions. The reader is meant to imagine a sort of journalistic cardinals' meeting - domed heads and lank grey hair nodding - a lengthy conversation among the best people on a newspaper, through which Truth emerges by consensus. Editorials are doubt-free zones, the calm water beyond turbulent argument. Other parts of a paper are information, argument or provocation: the editorial Tells You What to Think. Its anonymity and authority are linked together: Independent readers may think that Andrew Marr is a fool or that Polly Toynbee goes nuts on religion; but the editorial is above personality or quirk. It is a sublime expression of the paper's essence.

A little old-fashioned? A touch condescending? We suspect Independent readers are not likely to accept arguments simply because of where in the paper they appear. And in some cases, the contrived impression of unanimity isn't only a white lie, but gets in the way of understanding. That is certainly so when it comes to the single currency, also known as the Euro or EMU. Show us someone who is absolutely certain about whether Britain should or shouldn't enter it and we will show you a fool. Internally, we have had, and will carry on having, serious and lengthy arguments about it. People here disagree passionately, as they do in all parties and - indeed - in any media organisation that isn't brain-dead.

This the biggest single political decision facing the country; but it is also one of the most complicated. It can be reduced to an emotional hunch - to simple slogans about ``giving away our country'' or ``rejoining European history''. But on such an important matter we have a duty to try, at least, to work our way through the true balance-sheet. On page 8 we give a basic but, we believe, fair-minded account of some of the most important arguments on either side. We will continue to report the debate in detail. But our own doubts and arguments don't absolve us, or anyone else, of eventually trying to make a choice.

The Euro question is difficult, partly because it involves comparing unlikes - how do you measure a loss of democracy against an increase in British wealth and security, for instance? There are no formulae or instruments available, no subtle calibration of public good. And it is difficult too because it means guessing about the future. It has to be a leap in the dark. (Though this is not necessarily an image that persuades us to be cautious, since the original ``leap in the dark'', an early extension of the voting system, proved thoroughly sensible.)

But in this situation, it is still possible to assert a hierarchy of values, to say where you start from. For us, democracy matters more than modest adjustments in prosperity. We believe that EMU will bring a little more prosperity. We think that excessive European bureaucracy and rigidity will be washed away by the power of global competition; that if EMU works, it will require a strongly counter-inflationary central bank; and that therefore Britain would benefit both from strong and stable money, and from the lower transaction costs of doing business with the rest of the EU. Were there no democratic costs, we would unhesitatingly plump for British membership of the single currency in the first wave.

But we hesitate. We need to discuss whether British membership of EMU would be a significant anti-democratic step. It would, certainly, mean effective powers going to bankers on the continent - but most of this power is currently held by bankers anyway.

If the latest negotiations between finance ministers are successful, the European Council of Ministers would retain the ultimate political power to punish countries that failed to follow orthodox economic policies. But, month to month, judgements currently made between the British Chancellor of the Exchequer and the Governor of the Bank of England would be taken by the new European central bank. The more such a bank were democratic - i.e. open to interference by politicians - the less successful it would be and the weaker would be our economic interest in being part of it. Conversely, the more economically successful it was, the less ``democratic'' it would be.

Of course, the making of monetary policy in Britain is not notably democratic today, for just the same reasons. But at least, if a British chancellor badly mishandles monetary policy, driving the country into a long and unnecessary deflation, or producing an inflationary binge, voters have the option of kicking him, and the rest of that administration, out.

As it happens, one of the problems of democratic politics is that voters tend to reward inflationary chancellors; indeed there is a case for arguing that democracy is inherently inflationary. But today, voters have at least the possibility of periodic rascal-kicking. Go into EMU and the rascals setting monetary policy can't be easily kicked out. You can kick out one domestic minister on a multinational council, which in turn has an arm's- length relationship with the bank. But that's it.

So what? After all, Europe's national governments would retain many powers, over spending, and the detail of fiscal policy - though European union is in practice narrowing differences between countries on tax. Nor are we defending, as certain Tory romantics pretend, a strong democratic system at home. Indeed, British democracy is itself in an appalling state. A bent electoral system, a feeble parliament, an over-centralised state and croneyism in politics have meant that, for many people, our democratic heritage seems no longer worth fighting for. The fact that so many Eurosceptics tend to be older people may mean Britain has already produced younger generations so cynical about Westminster that they are effectively post- democratic in their thinking - and quite happy to be quietly ruled by bureaucrats. Today, a centralised and unreformed independent British state would offer few political advantages for millions of us over a European Union that took subsidiarity seriously.

We can go further. If we were sure that Europe was moving towards a tightly defined political centre, with more power for cities, regions and communities, we could declare for federalism, a new democracy. If Britons had more control over their communities, towns and regions, they would be in a better position to see powers over monetary policy move away from London, without worrying so much; the total amount of democratic influence and say would have increased, not diminished.

So why not enter monetary union quickly, and then turn to political reform? All we would be doing is passing over powers that are often misused by local bankers and politicians, from one decayed democracy to a bigger and admittedly less democratic system. The European Union would have progressed further towards supra-nationhood. Most people would quickly get used to the new currency and get on with their lives.

Here is the problem: Britain would have surrendered the ability to follow macro-economic policies that had not been agreed beforehand by other countries. Democrats would be making the huge bet that, afterwards, the loss to our national system would be made up by reforms on the continent and at home. And, as a rule, democrats ought to be highly suspicious of such transfers, particularly since the EU has no democratic safety-valve. True, it has a democratically elected institution and its councils, as well as its famous bureaucracy. But these are too far away to make a living, multi- lingual and cross-cultural democracy; in today's Europe, seen from today's unreformed Britain the gap between voter and ruler is simply too large to satisfy a thinking democrat.

Again, this may not produce radically different policies. It may be that the gap between what a British government would get away with in the global markets, and what a European bank would order it to do, is now small. But there is some ``give'', some leeway in the system now; just as there is a small amount of leeway for governments to alter taxes, cut or raise spending and so on. Just as individuality survives in the small differences between us, so it is in those small areas of political leeway that representative democracy survives.

Britain should join the single European currency just as soon as we get a proper answer to the democracy question. It would make us richer, a bit. It would confirm that we have finally accepted our true place in the world. But the democratic question is a hard one. It may mean we never join; or it may mean that we join in the second wave, after Britain's internal democracy has been strengthened and when there is a strong reform movement for the EU too, committed to tightly defining the central powers of the Union, opening up the Council of Ministers, producing effective states' rights, and so on.

We are Europeans. We are not hung up on Westminster sovereignty, the pound or the Union Jack. But we are hung up on popular sovereignty and we do not believe that a single currency imposed by political leaders and bureaucrats on our already ropey domestic democracy, without popular support as a ``lock'' to protect European institutions, is a sensible or safe way to build this Union. Some of us define the position as No, but. Others define it as Yes, but. But we wouldn't join in the first wave. And we'd want political reform before we joined at all.