Beautiful Virgin Islands

Thursday, Oct 30, 2025

Thatcher was completely right about the Euro

Thatcher was completely right about the Euro

It was a ‘rush of blood to the head’. Its central bank would prove to be hopelessly ineffective. And cultural differences would remain too deeply ingrained for an internal market to ever work as it should.
We learned this week from papers released in Dublin that Mrs Thatcher was completely damning about the idea of a single currency for the European Union. Looked at with the benefit of 30 years of hindsight, however, it is clear that the most remarkable point about her views is not just how intransigent she was but that she was completely right. The Euro has been a comprehensive failure, just as she said it would be.

Rewind three decades to the fading months of the Thatcher premiership and she was facing what turned out to be terminal trouble over her views on Europe. The Irish government has just released transcripts of talks between the British Prime Minister and the Irish Taoiseach Charles Haughey, who, it later turned out, had amassed huge sums of money in offshore bank accounts (a surprisingly common pastime among enthusiasts for EU integration) and had to pay millions in settlement of taxes.

The EU’s then-President, France’s Jacques Delors, was pushing a plan for a single European currency, and winning more and more support for it. Mrs Thatcher, alone among EU leaders at the time, was horrified.

It was she told Haughey a ‘rush of blood to the head’ by Delors. As well as arguing that the powers of unelected Commissioners needed to be curbed she insisted that that a common currency could never work. She was not right on all the details. For Mrs Thatcher, the real risk was that it would be inflationary, when in fact it has turned out to be deflationary instead (although in fairness she was scarred by the raging price rises she inherited on taking office in 1979, and of course inflation and deflation are equally damaging).

But she was completely accurate in forecasting that its central bank would not be able to manage monetary policy for such a large region, that economies would remain too different to synchronise their business cycles, and that the sacrifice of sovereignty would be immense. ‘We are not going to have a single currency,’ she told the Irish premier. She was wrong about that. The Euro was launched anyway, a decade later, although the British secured an opt-out, and the Swedes somehow managed to never quite get around to joining.

Since the Euro was adopted, it has left a trail of economic catastrophes in its wake. Greece has suffered the worst depression since records began, with a massive drop in output. Italy has barely grown for 30 years. Haughey’s Ireland witnessed an out-of-control property bubble fuelled by cheap money and had to be bailed out on punitive terms, from which its banking industry has never recovered.

The German trade surplus has grown to the largest ever seen, sucking demand out its neighbours. Overall, far from accelerating, growth in the Eurozone has recently declined, and so has trade between the countries sharing the same money. Mrs Thatcher might have been unable to stop the launch of the Euro. Yet 30 years later we can surely see that she was completely right to view it as a disaster in the making – and one that would cripple the continent for a generation or more.
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
UK and Vietnam Sign Landmark Migration Deal to Fast-Track Returns of Irregular Arrivals
UK Drug-Pricing Overhaul Essential for Life-Sciences Ambition, Says GSK Chief
Princesses Beatrice and Eugenie Temporarily Leave the UK Amid Their Parents’ Royal Fallout
UK Weighs Early End to Oil and Gas Windfall Tax as Reeves Seeks Investment Commitments
UK Retail Inflation Slows as Shop Prices Fall for First Time Since Spring
Next Raises Full-Year Profit Guidance After Strong Third-Quarter Performance
Reform UK’s Lee Anderson Admits to 'Gaming' Benefits System While Advocating Crackdown
United States and South Korea Conclude Major Trade Accord Worth $350 Billion
Hurricane Melissa Strikes Cuba After Devastating Jamaica With Record Winds
Vice President Vance to Headline Turning Point USA Campus Event at Ole Miss
U.S. Targets Maritime Narco-Routes While Border Pressure to Mexico Remains Limited
Bill Gates at 70: “I Have a Real Fear of Artificial Intelligence – and Also Regret”
Elon Musk Unveils Grokipedia: An AI-Driven Alternative to Wikipedia
Saudi Arabia Unveils Vision for First-Ever "Sky Stadium" Suspended Over Desert Floor
Amazon Announces 14 000 Corporate Job Cuts as AI Investment Accelerates
UK Shop Prices Fall for First Time Since March, Food Leads the Decline
London Stock Exchange Group ADR (LNSTY) Earns Zacks Rank #1 Upgrade on Rising Earnings Outlook
Soap legend Tony Adams, long-time star of Crossroads, dies at 84
Rachel Reeves Signals Tax Increases Ahead of November Budget Amid £20-50 Billion Fiscal Gap
NatWest Past Gains of 314% Spotlight Opportunity — But Some Key Risks Remain
UK Launches ‘Golden Age’ of Nuclear with £38 Billion Sizewell C Approval
UK Announces £1.08 Billion Budget for Offshore Wind Auction to Boost 2030 Capacity
UK Seeks Steel Alliance with EU and US to Counter China’s Over-Capacity
UK Struggles to Balance China as Both Strategic Threat and Valued Trading Partner
Argentina’s Markets Surge as Milei’s Party Secures Major Win
British Journalist Sami Hamdi Detained by U.S. Authorities After Visa Revocation Amid Israel-Gaza Commentary
King Charles Unveils UK’s First LGBT+ Armed Forces Memorial at National Memorial Arboretum
At ninety-two and re-elected: Paul Biya secures eighth term in Cameroon amid unrest
Racist Incidents Against UK Nurses Surge by 55%
UK Chancellor Rachel Reeves Cites Shared Concerns With Trump Administration as Foundation for Early US-UK Trade Deal
Essentra plc: A Closer Look at a UK ‘Penny Stock’ Opportunity Amid Market Weakness
U.S. and China Near Deal to Avert Rare-Earth Export Controls Ahead of Trump-Xi Summit
Justin time: Justin Herbert Shields Madison Beer with Impressive Reflex at Lakers Game
Russia’s President Putin Declares Burevestnik Nuclear Cruise Missile Ready for Deployment
Giuffre’s Memoir Alleges Maxwell Claimed Sexual Act with Clooney
House Republicans Move to Strip NYC Mayoral Front-Runner Zohran Mamdani of U.S. Citizenship
Record-High Spoiled Ballots Signal Voter Discontent in Ireland’s 2025 Presidential Election
Philippines’ Taal Volcano Erupts Overnight with 2.4 km Ash Plume
Albania’s Virtual AI 'Minister' Diella Set to 'Birth' Eighty-Three Digital Assistants for MPs
Tesla Unveils Vision for Optimus V3 as ‘Biggest Product of All Time’, Including Surgical Capabilities
Francis Ford Coppola Auctions Luxury Watches After Self-Financed Film Flop
Convicted Sex Offender Mistakenly Freed by UK Prison Service Arrested in London
United States and China Begin Constructive Trade Negotiations Ahead of Trump–Xi Summit
U.S. Treasury Sanctions Colombia’s President Gustavo Petro over Drug-Trafficking Allegations
Miss USA Crowns Nebraska’s Audrey Eckert Amid Leadership Overhaul
‘I Am Not Done’: Kamala Harris Signals Possible 2028 White House Run
NBA Faces Integrity Crisis After Mass Arrests in Gambling Scandal
Swift Heist at the Louvre Sees Eight French Crown Jewels Stolen in Under Seven Minutes
U.S. Halts Trade Talks with Canada After Ontario Ad Using Reagan Voice Triggers Diplomatic Fallout
Microsoft AI CEO: ‘We’re making an AI that you can trust your kids to use’ — but can Microsoft rebuild its own trust before fixing the industry’s?
×