RUPERT DARWALL i Wall Street Journal 97-10-14

It is a sad day when The wall Street Journal Europe of all papers puts the claim -of economic efficiency over democracy-an argument normally deployed by technocrats and socialists. Yet this is the position of your editorial on Britain adopting the euro. Joining the European single currency has profound constitutional implications for the United Kingdom and would weaken democratic accountability, dismissed by your editorial as "sentiments" to be overcome.

true conservatives have always rejected this trade-off. As Edmund Burke wrote, "A brave people will certainly prefer liberty, accompanied with a virtuous poverty, to a depraved and wealthy servitude. I shall always, however, consider that liberty as very equivocal in her appearance, which has not wisdom and justice for her companions; and does not lead prosperity and plenty in her train."

Indeed, the euro will cause greater economic instability by aggravating boom-bust cycles. It is not just difficult to strike the right rate at which currencies are permanently fused; it is impossible, because there is no such thing as the right rate. Although currencies were fixed under the gold standard and Bretton Woods, individual currencies had their own interest rates reflecting domestic monetary conditions. The gold standard was particularly successful in this regard. By contrast, the European Central Bank will set monetary policy for the whole continent. There can be no right exchange rate if interest rates cannot adjust to each country's needs.

It is true that businessmen yearn for currency stability. But even in an open economy such as Britain's, exports account for less than one-third of GDP and exports to the European Union half that. The price of currency stability would be greater instability for the remaining 70% of the economy. That was the big lesson from Britain's membership of the Exchange Rate Mechanism, the main difference from the euro being that at least there was an exit from the ERM.

Unlike the gold standard or Bretton Woods, the euro is a political construction designed for political ends - the development of Europe as a superstate. Its values are hostile to those normally advocated by your newspaper.

RUPERT DARWALL, London