We’re so smug in our own euroscepticism that it is difficult to grasp why some people may share our dislike of the EU while wanting to get closer together. It’s a scary world.
The WSJ pours a bucket of cold water scepticism on the whole shoddy re-vote process
Christina Speight
TELEGRAPH
26.6.09
Why Ireland is primed to reverse its Lisbon Treaty vote
The euro has provided the former Celtic tiger with a refuge in the financial storm, writes Adrian Michaels.
By Adrian Michaels
If democracy is about listening to the people, then Iran isn't the only place where things have got a bit strained. A year ago, 53 per cent of Irish voters declined to ratify the substantial increase of the European Union's powers and reach enshrined in the Lisbon Treaty. Yet in early October, the country will be holding another referendum, in which the people will be given a chance to come up with a better answer.
This state of affairs should, you might think, be producing howls of discontent. Yet the second referendum is expected convincingly to approve the treaty, which gives the EU its own powerful president and diplomatic corps, and transfers powers to Brussels in all sorts of areas once reserved for individual nations.
From the more sceptical British perspective, it seems bizarre. The financial crisis has again demonstrated Brussels's worst tendencies: unwarranted regulatory overreach, such as the efforts to stamp on London's hedge fund industry; and a lack of dexterity for economies hamstrung by the single interest rate set by the European Central Bank.
Since the first, negative referendum result, all Ireland has to show from its membership of the eurozone is an economy that has been transformed from Celtic tiger to Hibernian stray. Deep pay cuts and tax increases have been implemented in a desperate effort to restore order to the country's finances. House prices have plummeted to a five-year low, while national income is set to fall by 15 per cent between 2008 and 2010. Elsewhere in Europe, pessimists predict the collapse of the Baltic economies that are pegged to the euro, and a consequent contagion that could threaten the single currency as it spreads to weaker members such as Greece.
So why are Irish hearts warming towards Brussels – and why are other countries throughout central and eastern Europe still queuing up to join the embattled eurozone? Call it the Chevalier Effect. It is said that Maurice Chevalier, the French singer and actor, was asked how he felt about growing old. His reply? That it was better than the alternative.
For the small nations on the periphery of Europe, better Ireland than Iceland. The Land of the Rising Cod used the unsustainable boom to transform itself into an enormous hedge fund. The country is now bust, and may take decades to recover. Ireland is also a small, open economy, highly dependent on trade – but it could rely on the credibility of the euro and the central bank as it grew and when it ran into trouble. Recently, it received a huge injection of cash as part of the ECB's staggering 600 billion euro programme to shore up the continent's economy and financial system. [News to me! Anybody know how much ? -cs]
Ask most Irish commentators about the referendum, and they will say that membership of the euro is not in dispute. Almost everyone is in favour: the debate over the treaty has been about fears that the EU will impose changes in tax, neutrality and abortion. But with confidence shaken by the recession, there is a newfound gratitude towards Brussels and an anxiousness not to annoy the rest of the EU. "Some countries, like Ireland, cannot afford to go it alone," says the country's leader, Brian Cowen. "Membership of the European Union enables us to shape issues with global impact and it provides us with stability in difficult periods."
There are many drawbacks to euro membership. [One NOT mentioned here is the problem for Ireland of going into the euro when Britain didn’t and its other big customer, USA. wasn’t -cs] The one-size-fits-all interest rate meant that the citizens of Ireland and Spain could borrow far too cheaply for their booming economies. Still, as Amelia Torres, of the European Commission's economic affairs section, observes: "There were many countries that overheated or had property or other bubbles without being in the euro."
For some, the biggest problem with the euro is the loss of control over interest and exchange rates. Ireland's recession will be deeper and last longer as a result of the country's inability to help exporters by devaluing. Restoring competitiveness must be done by wage restraint and productivity improvements alone, and that will take time. But while monetary sovereignty makes sense for larger economies such as Britain, it is largely an illusion for smaller nations, says Brian Crowley, an MEP from Ireland's governing party, Fianna Fail: Ireland's previous currency, the punt, was subject to wild speculation. "In reality, you were borne by what was happening on a wider scale."
The doomsayers still think there is a chance that strains within the eurozone could force countries to default on their debt and drop out of the currency. But the costs would outweigh any benefits from a devaluation. There would be a run on the banks as investors tried to put their money where it would maintain its value; businesses might breach debt covenants if their assets shrank in value; and the country's cost of borrowing would increase sharply.
Even though it has worsened the pain of recession, the euro has so far been a qualified success for Ireland. Also, Mr Crowley points out that the Irish have held repeat referendums not just on Lisbon's predecessor, the Nice Treaty, but on abortion, divorce and proportional representation. The second vote on the Lisbon Treaty must be seen that way: it might look like a strange way to run a democracy, but it does reflect the changed will of the people.
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WALL STREET JOURNAL 26.6.09
The EU's Latest Power Grab
From today's Wall Street Journal Europe
In some countries they rig votes, in the European Union they repeat votes to get the desired result.
After Ireland last year rejected the EU's Lisbon Treaty -- itself a rehashed carbon-copy of the EU Constitution that Dutch and French voters rebuffed in 2005 -- the Irish are being asked to reconsider. There will be another referendum in early October, Prime Minister Brian Cowen said Wednesday, and this time the Irish are expected to get it right. In Europe, they don't take "no" for an answer.
Proponents say the Lisbon Treaty is key to reforming the squeaky institutions of the 27-member union. Skeptics, including a majority in Ireland, see a significant power grab. The Treaty gives the EU a nonelected president, a quasi foreign minister, a beefier defense and foreign policy and fewer national vetoes in a number of policy areas.
To justify a revote, EU leaders put on a big show at last week's summit, giving the impression of tough negotiations in which Dublin supposedly won important concessions. The main prize Mr. Cowen took home is a protocol that claims to address Irish concerns, such as worries that the Treaty would allow the EU to meddle in Irish taxation, abortion issues, workers rights and neutrality.
Oh really? According to the EU summit's own conclusions, the protocol "will clarify but not change either the content or the application of the Treaty of Lisbon." So the Irish will vote on the same text they previously rejected by a seven-percentage-point margin despite assurances by their government as recently as last month that this would not happen.
In the year since the last vote, the Irish economy has tanked, and a pro-Brussels vote this time is possible if only because many Irish worry that the EU may abandon them in their economic hour of need. It's a fear the government knows how to exploit. A precondition for economic recovery, Mr. Cowen said Wednesday, is to "remove the doubt about where our country stands in relation to Europe."
Just a couple of weeks ago the bien pensants in Brussels bemoaned the success of euroskeptics in European Parliamentary elections. This latest run-around on the Lisbon Treaty for the purpose of boosting the power of the EU at the expense of individual states is not the way to create more europhiles.
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