The CBI and the Maastricht Treaty
November 7th, 1992
A letter to the Editor of the Times which was published on 4th November 1992.
I wonder how many of the 27 luminaries of the CBI who write today advocating ratification of the Treaty on European Union have actually read it. One would hope that they have brought to bear on the treaty the same exacting scrutiny which they bring to bear on their companies’ commercial agreements.
Your correspondents say that while “early re-entry to the ERM is not likely to be feasible . . . we should not close off the option to re-enter”. Do they not realise that the central purpose of the treaty (Article G, Title VI) is monetary union, that membership of the ERM is the first stage and that the second stage to which the treaty legally commits this country begins on January 1, 1994, less than 14 months away. Despite Britain’s theoretical option to defer a decision on full monetary union in Stage 3, under Stage 2 we will be bound to adopt convergent monetary (largely deflationary) policies which run flat counter to the new policy of economic growth.
Again, contrary to their letter, the Maastricht treaty articles do not add appreciably to the framework of the single market: these are provided for in the Single European Act (1986). Where the treaty does have an additional effect on the market is in its provision (Articles 130a-d) for the setting up (before December 31, 1993) of a new cohesion fund whose central purpose is to transfer large sums of money (so-called structural funds) from the rich north to the poor south of the Community.
In other words, countries like Britain will pay subsidies to other countries like Portugal and Greece in order that they will be able to compete better with us. On current EC plans these transfers double Britain’s present EC contribution of almost £3 billion.
Is this what the CBI wants?