Standards: 2005 and all that.

So Europe is to adopt International Accounting Standards by 2005. I think we made a big mistake in adopting the Euro as the single European currency. We should have adopted the US dollar. And invited Japan to do the same.

10,000 years ago, as the ice retreated, a small tribe living on the Danube began an expansion taking them across Europe and into India. Their language, proto-Indo-European, became the basis of most European and northern Indian languages (although Asiatic invasions gave us Hungarian and Finnish).

2000 years ago there was a single currency area – the Pax Romana – covering almost all of Europe, the Mediterranean coast and the Middle East. 1000 years ago there was a concept of Christendom which linked all the European kingdoms. Over the next 1000 years European influence was spread, usually by conquest, to every country in the world except Japan.

So what is new about the EEC? What is new about a single currency? Indeed, what is new about a United States of Europe? Why are we dithering about getting in there and making it work?

Cheap goods and services need big markets to achieve economies of scale and standardisation. Profitability and wealth creation need efficient infrastructures to eliminate waste such as foreign exchange costs, international tax anomalies and language differences. Efficient markets need freedom of movement of resources, particularly people. These have all been available to the USA – a federation of sovereign states – for the last 200 years.

And what a success it has been.

I simply do not understand the arguments against wholeheartedly joining Europe. There is something about sovereignty, not being run by foreigners, not being in charge of our own destiny. What does this mean? I am not in control of my own destiny now. I can vote to elect my own MP but that’s about it. The result is that I get a Labour Scot as my Prime Minister.

Would an Italian Christian Democrat make much difference? And we have an advantage in that we speak English which is already the lingua franca of the world.

And anyway, being foreign is not necessarily a bad thing. The Bundesbank did a much better job at controlling inflation in the 1980s than the Bank of England did. Why should simple Britishness give better economic performance?

Well actually, it doesn’t. Standards of living in Britain are lower than in many European countries.

Common accounting standards across Europe are a small step and a useful one. But in the longer term, a United States of Europe would make me both richer and a citizen of the most powerful nation in the world. Which would be nice.

– Neil Chisman is a member of the Financial Reporting Council and a former finance director of Stakis and Thorn. ?:

Related reading

aidan-brennan kpmg