The Penguin History of the World

The German government after 1990 had soon sought to express its new influence by seeking to befriend its ex-Communist neighbours. The rapidity with which German businessmen and investors got to work in those countries and the speed and eagerness of Germany’s recognition of newly independent Croatia and Slovenia at the end of 1991 (it was the first country to do so) was far from reassuring to other EU members. How the EU was to expand was bound to be crucial for world history. A democratic and pluralist EU of almost 700 million citizens, stretching from the Arctic Circle to Antalya and from Faro to Kerch, might be one conceivable outcome, but another is a break-up (not necessarily into its national components) of what Union there is. Eventually, the question will appear of whether to attempt to integrate Russia, which is, in spite of its size and its autocratic tradition, undeniably a European country with many of those resources – human and material – that the EU will need for the continued welfare of its citizens.

There has of course been some cultural convergence within the Common Market, Community and EU over more than thirty years. Increasing standardization of consumption, though, owed less to European policy than to shrewder marketing and growing international communication at a popular level (the outcome was often, as in the past, deplored as ‘Americanization’). And such slow convergence as had been consciously promoted in, for instance, agriculture had been very costly, with the CAP understandably irritating non-farming voters. The Union seemed feeble, too, in its handling of external affairs; it blatantly failed the severe tests posed by Yugoslavia’s dissolution. Many uncertainties thus still hung over the future of Europe at the beginning of the twenty-first century. Among them was the project of a single European currency. Although the argument for it had always had a predominantly political flavour, it was asserted that great economic benefits would flow from its introduction and that lower prices and lower interest rates would be likely to follow. With equal assurance, it was pointed out that participating states would lose control over important aspects of their economic life. A common currency, in fact, implied further surrender of sovereignty.

Politicians brooded over what voters might think when choices had to be made that would bring home to them the consequences of a monetary union. It was not hard to agree, though, that were monetary union to fail, and were enlargement not to take place, the EU could settle back into not much more than a simple customs union.

When Helmut Kohl was defeated in the German elections of November 1998 and Gerhard Schröder, the first socialist chancellor of united Germany, took office, this made no difference to the monetary-union goal of the German government. The French government, too, stayed behind it. Denmark and Sweden firmly announced they would not wish to participate. In Britain, the new Labour government of Tony Blair, elected in a landslide vote in 1997, while cautiously positive to further integration, refused to join ‘until the time was right’, and the right time was not to appear during Labour’s first ten years in office. But on 1 January 2002, most of the EU member countries introduced their first shared currency since the age of Charlemagne. In a telling avoidance of offence to national susceptibilities, the possibilities of great historic names – crowns, florins, francs, marks, thalers and many more – were set aside and the new unit of currency was to be called the ‘euro’. By the mid-2000s, its notes and coins were the only legal tender among the 300 million citizens of twelve member states, and it was even adopted by states and territories outside the EU, such as Montenegro and Kosovo.