Labour may have won a landslide, but Tony Blair's uphill struggle on Europe is only just beginning
Right. That's the UK General Election over. Never mind that more people voted on the Big Brother TV series than for their future Government.
Since before the Election was announced, the UK stock market has shown little concern at any political uncertainty, and has all but sleepwalked through the campaign.
British voters probably hope they can now get back to the summer and some improving cricket, but for Tony Blair, the overwhelming endorsement on his home turf is merely a wander in the foothills of his ambition. The British poll exercised him hardly at all. Now he can get his teeth into something far more important: leadership in Europe.
The Conservatives handed New Labour a gift with their Save the Pound campaign. If that is the best they can do to make their case, they cannot be surprised to find even their natural constituents taking refuge among less cringe-making policymakers. Labour may also be split over Europe, but with a slice of luck and a bit of spin in coming months, Mr Blair could quietly finesse Britain's entry into the euro, to applause at home and abroad.
More and more people (and not just in the City) are accepting the idea of being part of Europe, if only because it is just too difficult to argue against it. Labour has learned some important strategic lessons in the last four years: the effectiveness of surprise (Bank of England independence), the power of stealth (those taxes) and the value of boring complexity (pension fund changes).
If he doesn't overplay his hand by offering too much detail, Mr Blair won't need to cook the euro referendum he has promised, even supposing he wants to. Being confident, optimistic and a bit vague should do it. He has two immediate challenges though. One is the current strength of the pound, and the other is the period when all 'legacy' currencies ' the national ones everyone uses ' will cease to be legal tender, and the new euro notes and coins come into circulation.
The Treasury can waffle on about its five economic tests but the most important factor will be the rate at which sterling enters the single currency. While its strength may test competitors abroad, it also hurts manufacturers at home. Much as it may pain certain Tories from the Shires, the pound needs to fall.
But the euro is in no shape to knock anything down. At the first sign of an opponent, it sinks to the floor. It is even making the yen look strong and forcing the Japanese Central bank to intervene to hold back a currency representing an economy with close to zero economic growth. Nobody believes anything the European central bank says anymore.
Whatever the health of the euro, 'E Day' (1 January 2002) will see 50 billion euro coins and 15 billion euro notes released. Eurozone members then have eight weeks to get their 300 million people used to trading and reporting in euros. Currently just 6% of them do. Not since the Y2K deadline has there been such potential for economic chaos.
Labour could wait for the euro to soar and for everything to settle down nicely after the cash launch before asking British voters if they'd like to consider membership. But it may wait some time. With a big, fresh majority, Labour may be tempted to tackle the euro issue early. If last election's anthem was 'Things can only get better'. The current theme is 'BBB-baby, you ain't seen nothing yet.'
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