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Gary Younge
Single minded

In June 1982 a little-known Eurocrat, Tommaso Padoa-Schioppa, delivered a little-noticed speech to the second symposium of European banks. It was the month when the Argentinians surrendered the Falkland Islands, the Israelis invaded Lebanon and the late Princess Diana gave birth to Prince William. But Padoa-Schioppa, the then director of economic and financial affairs at the European commission, had other things on his mind. Expounding and expanding his views on the liberalisation of capital, he started by quoting article 67 of the Treaty of Rome; he ended by calling for a single currency. "Fully fledged European monetary union is the high road to policy coordination and economic convergence," he said. "It would be sufficient to realise one major achievement: monetary union."

The speech was never going to make the headlines. Talks entitled Capital Mobility: Why is the Treaty not Implemented? rarely do. Moreover, 18 years ago, advocating a single currency was much like calling for the world to speak Esperanto - idealism masquerading as common sense. An intellectual house of cards which would collapse at the first whiff of reality. Now it is a reality, albeit a faltering and controversial one. And Padoa-Schioppa, who is now a member of the executive board of the European Central Bank (ECB), has been key to making it one. The Financial Times has described him as: "One of a small group of people who can claim that they invented the single currency." Sir David Walker, the chairman and chief executive of Morgan Stanley and Dean Witter Europe, who worked alongside Padoa-Schioppa over several decades, goes further, describing him as: "The central figure in the thinking that lead to a new Europe."

At a time when the issue in Britain is wrapped up in evasions, distortions and semantic arguments, might a visit to the man who started it all cast a little light on a debate which often feels as though it is being held in semi-darkness? Perhaps this quintessential European, this Italian who lives in Germany, spent his childhood in France and thinks in English, can offer us a glimpse of the European ideal in its purest form?

You will find him amid the alphabet soup of acronyms which make up the European lexicon, in between Pace (Programme of Advanced Continuing Education) and Palabre (a project con cerned with the integration of artificial intelligence). In Britain he is as little known as ever. But among the relatively small circles who follow the twist sand turns of EU development, he is the brains behind the project which has united much of Europe, is dividing the present UK government and brought down the last one.

He was the secretary of the Delors committee whose report in 1989 returned the issue of monetary union to centre stage and provided a blueprint for the Maastricht Treaty. The man who drew up the initial draft of the Rome Extraordinary Summit of October 1990; one of the "Gang of Four" who prepared all the technical and diplomatic stages which led to the "Rome conclusions". These, in turn, declared January 1994 as the beginning of the second stage of a more intensive economic and monetary coordination before the creation of a central bank. He was there when the vital documents were passed from the civil servants to elected premiers to sign; he is there in Frankfurt supporting the euro on the world stage.

But back in 1982, when he delivered his speech, such progress seemed a long way off. "There is a difference between what you think is necessary and what you think is possible," he says. "In the early 80s I was convinced that European monetary union was necessary. This was not a Damascene conversion but something that occurred to me over a period of time." His role in its construction was not upfront at the despatch boxes of individual European parliaments, where the political battles were being waged, but in the thinking, crafting and drafting behind the scenes.

"We all have a range of activities at our disposal which go from participating in intellectual debate into more concrete policy statements and positions," he says referring to his speech in 1982. "I regarded this idea as a part of an intellectual debate." His versatility and discipline in this regard, says Walker, is awesome. "He has an extraordinary capacity to see both the wood and the trees at the same time. He can see the big vision from the top down and the details from the bottom up. He sits with a blank piece of paper and maps out an entire strategy. He'll say 'There are 24 steps here', and then he'll go through them all systematically."

This is also how he talks: in precise measured sentences often punctuated by numbers. There are "three" reasons why the euro has been a success; "two" conflicting problems with speaking a foreign language; and "two" strands to Britain's negotiating techniques.

It is a degree of precision which does not just stop at his speech but which is clear from his clothes and general appearance. He keeps himself fit - he is a very young 59 - with a daily exercise regime which lasts exactly 11 minutes. His suit, like his hair, is a well-cut grey. A small man with a large brain rattling around in a huge office on the 34th of the European central bank. It is a vast plot in the middle of the Frankfurt skyline with space enough for a badminton court and a few table-tennis tables. The enormous windows offer an impressive view of a rather unimpressive, anodyne city.

He is very much the product of both his age and his upbringing, brought up in the north-east of Italy by a father who worked in insurance and a mother who raised four children. "Both my parents were intellectuals. My father had been a teacher. We were a cultivated family."

Born in 1940, he is part of the generation of continental Europeans whose views on the future of Europe were shaped by the aftermath of the second world war. With despair just behind them, they were intoxicated with optimism that in an age of reason they could construct a better world than their parents.

"I first met my father when I was five when he came back from the war. It was a time not so much of poverty but real indigence. People of this generation grew up with a strong conviction that the unity of Europe was the only way out."

He became a model European. He learned German at school and during a gap year in Bremen, English as a graduate at the Massachusetts Institute of Technology and French during holidays in the Alps. He dreams in Italian and thinks in either Italian, French or English. "I tend to think in the language in which I'm working at the time. But for most things I very much like to use English even though it is not my mother tongue because it is more concise, more precise, more concrete. It's like being an artisan. I have to weigh up how refined the tool is in my hands and how much I like to use it."

Economics was not the obvious conduit for all these talents. As a young man he was far more taken with history and philosophy, but felt the need to apply those disciplines in the real world: "I needed to do something closer to reality.

"Economics was the compromise, but in a way it was quite painful for me to be an economist." When his contemporaries were taking to the streets to bring down capitalism throughout the western world, Padoa-Schioppa was helping to shore it up with a job at the Italian Central Bank. After that came various high-level jobs related to banking, economics and finance, both in Italy and the European Commission.

He was not the first person to have proposed a single currency. There are several people who could make that claim to fame, although the chief responsibility sits on the fragile shoulders of Pierre Werner, the former prime minister of Luxembourg, who is now 87 and recently suffered a stroke. In 1970 he put his name to the report which called for the establishment of EMU and a European Central Bank by 1980. But the economic slump of the 70s jettisoned Werner's plans and they were not to be fully considered again until the Delors committee got together in the late 80s.

If anything, Padoa-Schioppa likes to play down his role. It was not until the late 80s that he started to think that a single currency had gone from a necessity to a possibility. "There was no single moment when it went from a dream to a reality," he says. "But there were several decisive moments. The Delors committee, the inter-governmental conference, the agreement of the heads of state were among them." And throughout there was always the possibility of failure. "There were moments when the whole thing could have fallen apart. The positive additions were always partial developments; but any negative developments would have been total. The biggest risk came with the currency crisis of 1992 - most people at that stage thought the likelihood of us achieving EMU was very low."

Even though he doesn't say it, chief among the headaches throughout this time were the recalcitrant British. He seems quite bemused and not a little impressed by Britain's negotiating strategy. "They did it in a masterful way. First they influenced the substance of the project so that it would be more suitable to them if they did want to sign up to it. And then they carve out a special status for themselves which means they do not have to sign up to it."

He is not worried by Britain's decision to stay out of the euro. In fact he thinks that unless Britain emerges with a pro-European consensus its inclusion could damage Britain and destabilise the entire project. "In most European countries a shift in politics does not fundamentally change the country's European policy," he says. "There is not much difference between Kohl and Schroeder or Juppe and Jospin when it comes to supporting the EU process. But there are some countries where this is not the case, such as the United Kingdom, where the fundamental attitude of the population is not united behind the European Union. So long as they are not members of Euroland this fragility of support does not worry me. I would be concerned if this fragility remained and they were part of Euroland."

That said, from the outset Euroland has seemed to have done a pretty good job of exuding fragility all on its own. No sooner had the euro been released than the market took it by the scruff of the neck and threw it down so hard it sank below the dollar and has yet to surface. "I did take it as a sign of a bad start but not as a crisis," Padoa-Schioppa says. "To some extent in the financial world perceptions are a reality and even misperceptions can be a reality and so its decline was significant in that sense. But the day it actually fell below the dollar was not important to me. I remember what I was doing the day Kennedy was assassinated [studying English on a course in Britain] or when man first walked on the moon [on a trip to Maine from Boston]. But I don't remember the day the Euro fell below the pound.

"British people are worried by the strong pound and we were concerned about a weak Euro. The real sign of success, or lack of success, is that the euro is accepted as a reality . . . that it is here to stay in Euroland. Nobody, not the financial system, the market, the unions, business sectors, questions the fact that the euro is a fait accompli ." Unless, that is, you happen to live in Britain, where almost everybody questions that very fact. Most people still do not want it, and a referendum (when and if it comes) is as likely to split families and friends as parties and governments. To some it represents a threat to our sovereignty; to others the most potent symbol of our xenophobic insularity. But to Padoa-Schioppa it is money that can be used from "Lisbon to Leipzig". Something that started as necessary, became possible and now, he believes, is unavoidable.

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