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states. After a strong start, the new currency weakened successively against the US dollar and other currencies in 2000 and 2001 – helping exports but also adding to inflation – before firming again in 2002 and early 2003, though in a more difficult economic climate of slower growth in the euro-zone. It was clear that the EU had now taken a major step towards economic and political integration, begging the question to what extent formal political unification would follow that in the monetary field. What is meant by a ‘union’? Since the European Union is, at present
communications technologies) revolution. Spain, another ‘tiger’ in the new euro-zone context, had managed to reduce its unemployment from 16 per cent in the mid-1990s to around 11 per cent in 2002. The UK’s unemployment in 2002 remained at about 5 per cent, even though with large differences MUP_Torbion_09_Ch9 224 22/9/03, 3:41 pm A new European Union 225 between regions. The situation in 2003 was more serious in big Euroland countries like France, Germany and Italy, with rates close to or in the double-figure range. The labour markets of these countries seemed
initiatives such as the Rapid Reaction Force, especially as Britain is not a member of the euro-zone. For Germany, close links with the UK have been important in order to avoid becoming too dominated by France in the EU. It is balance-of-power politics on a miniature scale, with the EU and the transatlantic relationship serving as obvious limits to anything more significant. This outcome has produced a broadly functioning ménage à trois, with Spain and Italy joining in as occasional mediators.15 A seemingly rock-solid ‘special relationship’ holds firm between the UK and the