A Proposed Activity, not a Proclaimed Institution

Right, so yesterday's post was longer and more rambling than ever. I was really just thinking aloud. Sorry about that. This'll be rather more to the point.

Having watched yesterday's Merkel-Sarkozy joint statement and press conference in a state of some confusion, I was bothered in its aftermath by the Guardian's tardiness in reporting on it, and then appalled to watch Tonight with Vincent Browne (without Vincent Browne) on TV3, it basically being a frenzy of Germanophobic hysteria, starting with this ridiculous opening:

'Good evening. I'm Declan Ganley, standing in for Vincent Browne. Behind closed doors in Europe today, leaders of France and Germany made a decision with immeasurable consequences for the people of Ireland. Tonight the Irish Government is scrambling to make sense of it. Does this spell the end of what's left of Irish sovereignty, and is there an alternative?'

And then, following an absurdly scaremongering questioning about the death of democracy in Europe, Lord Alton weighs in, saying:

'This is about creating a greater Germany. Let's not beat about the bush. This is what this about. There's been an agenda that's been running now for many years, where people want to create a sort of United States of Europe with Germany in the driving seat, and I think that's the agenda we're seeing being driven on, under the cover of the fiscal crisis that's been affecting the whole of Europe.'

And so it began, with the next panellist babbling about 'the first step in the destruction of the Common Market', misrepresenting the statement as a 'diktat' with 'conditions set in stone', and a third panellist saying 'this has been about the United States of Germany for a very long time'.

Suffice to say the show was more polemic than discussion, with only the most tentative attempt at balance, and all the while with the Twittersphere muttering darkly about spiked helmets and a 'Franco-German Empire'. Given his record with Libertas and its lies about the Lisbon Treaty, Ganley shouldn't have been allowed chair a discussion such as this.

We can all see that the Euro's in dire trouble. Even the British Conservatives think that its collapse would be disastrous for everybody, such that George Osborne's been advocating the raising of Eurobonds for the Eurozone countries based on a common -- or at least a co-ordinated -- fiscal policy, arguing that greater Eurozone integration is necessary if the single currency is to continue to work. Some degree of fiscal co-ordination had been foreseen when the common currency was first proposed forty years ago, but for whatever reason when the currency was being forged the countries that embarked on the project disregarded that economic reality. It's time now to face facts.

A More Sober Analysis...

Jason O'Mahony puts the Irish dilemma in starkly accurate terms on his blog:

'But now we have to confront the reality of a higher standard of living through cheaper Eurobonds and German supervision, or a lower standard of living, exclusion from the bond markets for the short to medium term, but keeping total control over our very modest resources. What will we do?

[...]

We need to be cool and calm about this. There is an argument that we would be better off staying out, keeping our fiscal sovereignty, and if we are willing to pay the price of having far less money to spend on public services, then it’s a strong one. But one thing is certain. Indignant guff ain’t gonna buy us any chips at this table.'

That's the option, and in considering it we need to think about why we joined the EEC in first place back in the day, signing up to a process of 'ever closer union'.

... In the Best Traditions of Realpolitik

Though I'm sure there's been some great work done since on the topic, it's well worth taking a look at what Joe Lee says about the Irish accession process in his Ireland 1912-1985: Politics and Society. Lee quotes with approval those hard-headed diplomats and civil servants in the Department of Foreign Affairs who took the view that those who banged on most loudly about our sovereignty being a pearl of incalculable price didn't have a clue what they were talking about.

True independence, in international affairs, is defined by freedom of movement, and the more options a country has, the more free it can be said to be. Arthur Griffith argued more than a hundred years ago that political sovereignty is meaningless without economic sovereignty, and the Department of Foreign Affairs at the time of accession to the EEC took that ball and ran with it. Lee says:

'Defining sovereignty as "the freedom to take autonomous decisions and actions in domestic and foreign affairs" the White Paper asserted that "as a very small country independent but with little or no capacity to influence events abroad that significantly affect us", Ireland enjoyed very little effective economic sovereignty.'

Our economy was in thrall to the British one, and dependent to a lesser degree on the decisions made by other European countries. Our only hope was to take our place at the European table and to have some say -- however small -- in the collective European decision-making process. What's more, by doing this we could diversify our trade, weaning ourself of our dependency on the UK, thereby increasing our range of options. By surrendering a small amount of nominal sovereignty, we would in practice hugely increase our sovereignty.

And so it proved, until Irish banks borrowed far too much money, and the Irish government guaranteed all money that had been loaned to those banks, not realising that by doing so -- and by not reneging on this arrangement once the reality of what it entailed became clear -- it was condemning Ireland to a condition not a million miles away from indentured servitude.

What Are They Talking About?

So, what have Sarkozy and Merkel said? Well, in truth, they haven't said a huge amount, and you'd never think, to hear the hyperbole and screeching from some of Ireland's more europhobic commentators, that Merkel had to be dragged to this position, as further European fiscal integration isn't exactly a vote-winner in Germany!

They've proposed that economic and fiscal policies in the Eurozone should be coordinated more than hitherto, that serious efforts should be made to facilitate this through twice-yearly meetings of the European heads of government, these meetings being chaired by the president of the European Council, that Eurozone countries should institute constituitional limitations on deficits into their constitutions, and that a pan-European tax should be introduced on financial transactions. They've resisted the idea of introducing Eurobonds just yet, though they remaining open to the idea in the long run, and they intend to work together to coordinate their own national tax policies.

That's all.

Firstly, I don't think anyone should be getting upset about two countries agreeing to work towards harmonising their own taxes. If we believe in our own sovereignty, it seems unfair to deny Germany and France the same thing; we can hardly object to countries deciding on their own tax policies. Will this make it harder for Ireland to resist pressure to join in this harmonised tax arrangement? Maybe, but what kind of an objection is that? Is it really tenable to say that Germany and France shouldn't be allowed to harmonise their taxes unless Ireland says they can do so? Can a government representing 4.5 million people really dictate the domestic policies of two other governments representing 145 million people?

Second, why all the screaming about a European Economic Government under a European President? Well, the clue here lies in the translation, which is why I got rather frustrated when the press conference was on; I wanted to read official transcipts not listen to immediate and perhaps innaccurate interpretations.

The word 'government' can mean either an institution or an activity; sometimes the word 'governance's is preferred in reference to the activity, as this is clearer. It's striking that while Google throws up about 35,500 results for the phrase '"true economic government"',  it throws up almost as many -- 31,000 -- for the far more precise phrase '"true economic governance"'. It's clear that what Sarkozy and Merkel were suggesting was not a new institution, but simply a meaningful activity, and one coordinated to some degree by elected heads of government rather than by unelected bankers. Indeed, this should be common sense: surely we can all see that while two meetings a year would hardly constitute an institutional government, it might at least suggest some effort to steer things. 

As for Van Rompuy's presiding over these meetings, well, doesn't this make sense? The President of the European Council is really only a chairman -- the French word Presidente in this context really just means that, in that he presides over meetings. It's been Europhobic propaganda that's established the position in the popular mind as an 'unelected President of Europe'. Having Van Rompuy chair the meeting would free the heads of government from that deliberately neutral role and allow them to focus on arguing their countries' cases.

And finally, don't forget too that these are just proposals. There's nothing to stop -- say -- Italy, Spain, and Portugal from getting together to put forward their own ideas for how things should be handled, or even Ireland announcing its own plans. There's nothing to stop countries working together in the Council to block proposals they don't like. There's nothing to stop countries from using their veto if need be. And, at least in the case of Ireland, there's nothing to stop us from refusing to amend our Constitution in accord with other people's wishes, unless they're our own too; we might, after all,  think it a good idea to live within our means.

This is a negotiating position, nothing more. No need to panic.