London Daily

Focus on the big picture.
Thursday, Apr 23, 2026

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

0:00
0:00
Close
Crypto Scammers Capitalize on Maritime Chaos Near the Strait of Hormuz: A Rising Threat to Shipping Companies
Changi Airport: How Singapore Engineered the World’s Most Efficient Travel Experience
Power Dynamics: Apple’s Leadership Shakeup, Geopolitical Risks in the Strait of Hormuz, and Europe's Energy Strategy Amidst Global Challenges
Apple's Leadership Transition: Can New CEO John Ternus Navigate AI Challenges and Geopolitical Pressures?
Italy’s €100K Tax Gambit: Europe’s Soft Power Tax Haven
News Roundup
Microsoft lost 2.5 millions users (French government) to Linux
Privacy Problems in Microsoft Windows OS
News roundup
Péter András Magyar and the Strategic Reset of Hungary
Hungary After the Landslide — A Strategic Reset in Europe
Meghan Markle Plans Exclusive Women-Focused Retreat During Australia Visit
Starmer and Trump Hold Strategic Talks on Securing Strait of Hormuz Amid Rising Tensions
Unofficial Australia Visit by Prince Harry and Meghan Expected to Stir Tensions with Royal Circles
Pipeline Attack Cuts Significant Share of Saudi Arabia’s Oil Export Capacity
UK Stocks Rise on Ceasefire Momentum and Renewed Focus on Diplomacy
UK to Hold Further Strategic Talks on Strait of Hormuz Security
Starmer Voices Frustration as Global Tensions Drive Up UK Energy Costs
UK Students Voice Concern Over Proposal for Automatic Military Draft Registration
Rising Volatility Drives Uncertainty in UK Fuel and Petrol Prices
UK Moves to Deploy ‘Skyhammer’ Anti-Drone System to Strengthen Airspace Defense
New Analysis Explores UK Budget Mechanics in ‘Behind the Blue’ Feature
Man Arrested After Four Die in Channel Crossing Tragedy
UK Tightens Immigration Framework with New Sponsor Rules and Fee Increases
UK Foreign Secretary Highlights Impact of Intensified Strikes in Lebanon
UK Urges Inclusion of Lebanon in US-Iran Ceasefire Framework
UK Stocks Ease as Ceasefire Doubts in Middle East Weigh on Investor Confidence
UK Reassesses Cloud Strategy Amid Criticism Over Limited Support Measures
UK Calls for Full and Toll-Free Access Through Strait of Hormuz Amid Rising Tensions
Starmer Signals Strategic Shift for Britain Amid Escalating Iran-Linked Tensions
UK Issues Firm Warning to Russia Over Covert Underwater Military Activity
OpenAI Halts Stargate UK Project, Casting Uncertainty Over Britain’s AI Expansion Plans
Starmer Voices Frustration Over Global Pressures Driving UK Energy Costs Higher
UK Deploys Military Assets to Protect Undersea Cables From Suspected Russian Threat
Canada Aligns With US, UK and Australia as Europe Prepares Major Digital Border Overhaul
Meghan Markle’s Planned Australia Appearance Sparks Fresh Speculation
Starmer Warns Sustained Effort Needed to Ensure US–Iran Ceasefire Holds
UK to Partner with Shipping Industry to Rebuild Confidence in Strait of Hormuz, Cooper Says
UK Interest Rate Expectations Ease Following US–Iran Ceasefire Agreement
Starmer Signals Major Effort Needed to Fully Reopen Strait of Hormuz During Gulf Visit
UK Fuel Prices Face Ongoing Volatility Amid Global Pressures and Domestic Factors
Kanye West’s Planned Italy Festival Appearance Draws Debate After UK Entry Ban
Smuggling Routes Shift Toward Belgium as Migrant Crossings to UK Evolve
Ceasefire Offers Potential Relief for UK Fuel and Food Prices Amid Ongoing Uncertainty
Iran Conflict Raises Questions Over UK’s Global Influence and Military Preparedness
Senator McConnell Visits Kentucky to Highlight Federal Investment in Local Projects
Kanye West Barred from Entering UK as Legal Grounds Come into Focus
UK Denies Visa to Kanye West After Sponsors Withdraw from Wireless Festival
Trump-Era Forest Service Restructuring Leads to Closure of UK Lab Focused on Kentucky Woodland Health
Foreign Students in the UK Describe Harsh Living Conditions and Financial Pressures
×