Britain`s Iron Lady and Former Prime Minister Margaret Thatcher had a speech on September 19, 1992, at the World Economic Development Conference regarding the European Union, and that speech is pretty amazing.
No leader is all-knowing and all-wise, but Thatcher had qualities of leadership, authority, charisma, and intelligence like no others. The speech was made at a time with no hysterical media mob, insane political division, and where the definitions of biology still applied to men and women.
Thatcher spoke of the failure of the ERM, the Exchange Rate Mechanism, a predecessor to the Euro, then warned about the Euro. Days after «Black Wednesday,» Thatcher admitted her mistake in joining the ERM.
In the speech, nearly 30 years ago, she correctly predicted a sequence of events regarding the Eurozone
The stability which fixed rates offered was a false one. It prevented currencies from adjusting gradually to market realities, and in the end, it produced wild swings of instability. There`s nothing new about fixed exchange rates collapsing.
What might be new is to finally learn the lesson that fixed rates don`t – and can`t – work in free markets, she said.
Furthermore, she said; Since countries differ in their level of economic development and potential, their fiscal policies, and their rates of inflation, the most flexible and realistic method of economic adjustment is a system of floating exchange rates.
It`s also interesting to note that she said; «Limited government, small government, honest government; these are themes not just for reforming the post-communist states but for getting our own economies back on track.»
What she had to say about the Eurozone is accurate and precise. She said; «If the divergence between different European economies is so great that even the ERM cannot contain them, how would those economies react to a single European currency? The answer is that there would be the chaos of the sort which would make the difficulties of recent days pale by comparison.
Huge sums would have to be transferred from richer to poorer countries and regions to allow them to take the strain. Even then unemployment and mass migration across now open frontiers would follow. And a full. fledged Single currency would allow no escape hatch.
The political consequences can already be glimpsed, she said, and she was right. «The growth of extremist parties battening on fears about mass immigration and unemployment, offering a real, if thoroughly unwelcome, alternative to the Euro-centrism political establishment.
If in addition you were to create a supra-national European federation, and the people could no longer hold their national parliaments to account, extremism could only grow further.
It is time for the European politicians to sit up and take note. Time to stop their endless rounds of summits. Summitry is fast becoming a substitute for decision-making, and observe the reality around them.
There is a growing sense of remoteness, alienation of people from their institutions of government and their political leaders. There is a fear that the European train will thunder forward, laden with its customary cargo of gravy, towards a destination neither wished nor understood by electorates. But the train can be stopped, Thatcher said.
Tomorrow, the French people will vote on the future of Europe. It is not for me to instruct them on French interest. But I must stress that the referendum is not a vote on whether we should have a European Community, but on what kind of European Community it should be.
Thatcher`s predictions were correct, and now nearly 30 years later, we have Brexit. Great Britain is out of the European Union. But it’s still a part of Europe and that`s what the question is about; what kind of European Union it should be.
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