Say what you will about the rest of her legacy, but when it comes to the economic disaster today known as the euro, Margaret Thatcher was downright prophetic. In a delightfully acidic speech delivered before Britain's House of Commons in 1990, and posted below, she summed up her feelings about European integration: "No. No. No."
Specifically, Thatcher opposed to the idea of handing political power to a European parliament, giving up the pound for a single European currency, or handing over its monetary policy to a European central bank. As she put it (in the blunt way only British politicians can):
Perhaps the Labour party would give all those things up easily. Perhaps it would agree to a single currency and abolition of the pound sterling. Perhaps, being totally incompetent in monetary matters, it would be only too delighted to hand over full responsibility to a central bank, as it did to the IMF. The fact is that the Labour party has no competence on money and no competence on the economy -- so, yes, the right hon. Gentleman would be glad to hand it all over. What is the point of trying to get elected to Parliament only to hand over sterling and the powers of this House to Europe?
Thatcher's stance towards a greater Europe at the time was a bit more nuanced than some now remember. In that same speech, she said her government would support the idea of a "parallel" European currency that could co-exist with the pound -- a sort of trial run for potential future integration. And it wasn't just her Labour opponents pushing for Britain to become part of a more federal Europe. Thatcher's deputy prime minister, Geoffrey Howe, resigned over his disagreements with Thatcher over the currency issue. That move helped spark the leadership battle that led to her ultimate resignation.
But Thatcher realized that Britain would be better served keeping control over its own financial affairs. In 2002, with the European project still moving along apace, she wrote in her book Statecraft "that such an unnecessary and irrational project as building a European superstate was ever embarked upon will seem in future years to be perhaps the greatest folly of the modern era."
She lived just long enough to see history prove her right.
Update: Business Insider has a great short post up explaining that Thatcher wasn't just nebulously right that the euro was a poor idea. Rather, she had a very keen sense of exactly why it would eventually turn into such a train wreck. In her 1993 memoir The Downing Street Years, she recalled conversations with her successor, John Major, about how to convince the rest of Europe a monetary union would fail.
Countries such as Ireland and Spain haven't so much been done in by "inefficiency" as they have by the inability to respond to giant housing busts and recessions with the help of their own central banks. But Thatcher had the core point right: the EU was attempting to merge vastly different economies under a single monetary policy that, in many cases, was utterly inappropriate. As BI puts it: "It's one thing to kind of generically anti-Euro, which a lot of people in England have been. It's another thing to absolutely nail why the euro would be such a disaster."
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