Euro: We should tell 'em where to stick it, Nick

Nick Clegg has a piece in the Independent this morning repeating his suggestion of last week that we should consider joining the Euro. Not, it has to be said, now and in a hurry - he does not see it as a way out of the mess the financial markets are in - but in recognition that the world after this crisis will be a different economic landscape in which ganging up together with Europe may outweigh the loss of credibility the City of London will have wrought on itself. He concludes:

But given the gravity of the economic crisis in Britain, and our unique exposure to international financial markets, silence about the euro must end. The future has never been more uncertain. People are increasingly desperate for stability in our economic affairs. We must be ready to think anew. [From Nick Clegg: We should consider joining the euro - Commentators, Opinion - The Independent]

Indeed, we must think anew, but alas the Euro is still part of the old world not the new. It is the system itself that is broken. It is true that one could argue that the Euro is slightly different from the rest of the system in that its central bank is not controlled by a single government with spending plans it would like to get that central bank to finance. At the moment that is; and God forbid that it ever should - we don't want these people to have any control over our lives, as liberals, do we?

If the Euro is able to survive the current crisis, with the pressures of Greece, Spain, Portugal and Ireland at least threatening to break all the rules, it will be a stronger currency I am sure if it emerges out the other side, but how long would it take for it to be ready to absorb an economy the size of the UK's?

Then also I notice talk that the BRIC countries, and at least China and India, as global creditor nations, will hold a lot of sway when the G20 meets in a few weeks time, are resurrecting something similar to Keynes' idea of the Bancor as a sort of a supra-national reserve currency. I doubt that they will readily accept a switch from one "national" reserve currency to another. The very notion of a reserve currency linked to one particular geopolitical grouping skews the system against all the other nations by effectively ensuring they have to buy that reserve currency in order to trade. In the new world where these economies are nipping at our heels it is economic imperialism, and protectionist, to believe we have a right to be some global super-currency.

I really think we have to begin to look beyond the era of "central banking" - it's not like it's been around that long - less than a century in reality. It has proven time and again to be a hostage of markets owing to the moral hazard inherent in the private banking system knowing they will be baled out in a crisis and has been a constant source of inflation. Not even our most monetarist governments have been able to control the money supply. It is one of the great monopolies that our liberal predecessors knew were a great cause of inequity.

As well as establishing this group to look at the electoral use of technology, the party needs to establish a group of, if you like, futurologists, to look at how the technological advances, especially in communications, over the past couple of decades can facilitate even more wide ranging changes right down to the institutions we have accepted till now as the very life-blood of the economy. The genie is out of the bottle, we are in a new epoch, and it seems to me that the opportunity this financial crisis affords us to do away with some of the old and facilitate the new is unmissable.