IF WE FIGURE out where we want to go politically with Europe, the options open to us in sorting out the immediate Eurozone crisis should come quickly in to focus.
Under the bailout agreement the government’s freedom to decide public taxation and spending has been curtailed because of the oversight arrangement introduced with the arrival of the troika. Strict parameters have been set within which we must make decisions and govern. Still the mandate from the people and the duty to the state remain.
Our politicians decided that this arrangement had to be made in order to keep the show on the road and that we would receive outside assistance until such time as we could manage our own affairs once again. It was a temporary decision though and designed in such a way that it would not be permanently binding on either party to it.
Things are changing quickly though and the once temporary may yet become permanent for some.
There is much talk of treaty changes to stabilise the monetary union longer term and to do this by introducing greater fiscal union. The most subtle of changes being contemplated involves a formalization of the terms of the Growth and Stability Pact: making the 3% debt to GDP target binding on all members and introducing the possibility of penalties if these strict targets are not met. Bolder measures build from here.
At this most basic level though proposals would involve scrutiny of budgets by foreign parliaments, with the power to dictate changes, and the option to penalise rule breakers if deemed necessary. For the bailout countries it would in reality mean little change from what is currently the status quo.
What we are experiencing is an economic crisis of such severity that it has brought us rapidly to a significant political question at home and in Europe. This moment has been hiding in the background since Maastricht. It’s important to understand that the likely long-term solution for the euro problem will mean a further loss of sovereign power. What are we willing to give to save the euro? What do we want from the European project?
The temptation will be to answer these questions on economic terms – how much we stand to lose financially under the various scenarios. These factors are important and will inform the position we take. But they must not define it.
We must not cling to the euro simply because we’re concerned about maintaining foreign direct investment levels, important as they are to our economy. Nor should we do so because we are worried about household debt levels and what would happen in a post-euro scenario (and I don’t make this point lightly). But we cannot go for greater fiscal union because of an intellectually lazy assumption that Europe simply has to go that way.
People will argue that we have no choice and that the euro must be saved no matter what. If this is the case then we have lost our independence already.
I’m a European. And I’m a democrat. And, as there are different ways of organising a democracy, so there are different ways of structuring European cooperation. We already have a structure that for the moment has proved successful in maintaining peace on the continent while also respecting each nation’s sovereignty.
Greater fiscal cooperation could possibly undermine a core principle established in Europe – equality amongst sovereigns.
Recent political events in Italy and Greece challenge basic democratic and sovereign principles. Fiscal union in Europe wouldn’t look very different. The practice of European committees made up of state leaders (including our own) and institutional representatives dictating other members’ domestic affairs would be normalised. What voice then have the people in such an arrangement? Why hold elections at all?
This might sound a bit dramatic but giving up fiscal control undoes a fundamental principle of our democracy and the European Union. We must tread cautiously. Once that principle is undone we put ourselves determinedly on the road to federalization and true political union.
There are those who want this, who want Europe to take the stage as a proper singular power and it is an entirely legitimate ambition. True a simple treaty change won’t bring this about overnight. But the type of treaty changed envisaged would establish once and for all the collective will and direction of the European project, something that has been debated and contested since the first days but never properly challenged until now.
This isn’t about some false sense of patriotism or hyper-nationality. It’s about democracy, and about how democratic principles are best served – what arrangement of institutions is best to determine and implement the will of the people.
Democracy in this country is too far removed from the people as it is, with basically no responsibility or authority at the local level. Meaning that localism plays out in the national arena, the little picture trumping the big. We know this; it’s why we are where we are today.
The risk as I see it is that we could make this democratic deficit greater. We recently saw a cabinet Minister marching against his own government’s proposed cutbacks. Imagine seeing a future Taoiseach marching against proposed cutbacks from Europe.
The Taoiseach Enda Kenny has said he doesn’t see Treaty change as the solution. Even if it was, I don’t think the citizens of Europe would support it for the reasons above. This means that the current infrastructure must be used and used quickly to address the immediate crisis. Germany needs to understand this now as talk of treaty change is wasting valuable time.
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