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How long before the people of Europe wake up to the fact that they are not living in a democracy?
Guardian – Comment is free
2 June 2012
The IMF’s Christine Lagarde: no friend of the Greeks. (Photo: Nicholas Kamm/AFP/Getty)
The European crisis is as much political as economic. It raises fundamental democratic questions. By what right do you govern us? How can we control you while you are in power and how can we remove you if your governance fails? Last week, Michael Ignatieff, former columnist on this newspaper and former leader of the Canadian Liberal party, came to London from a country where politicians can tell the electorate that they have limited powers to remedy their grievances and gazed on Europe with horror. “What,” he asked, “is a working stiff in Piraeus meant to make of Christine Lagarde?”
His question answered itself. Madame Lagarde told Greek parents who were scrambling through rubbish tips to find food for their families that she had more sympathy for the children of sub-Saharan Africa. Having unburdened herself of the oafish thought that suffering is a competition in which the poorest can be used as a weapon against the poor, the managing director of the International Monetary Fund added: “I think they should also help themselves collectively. By all paying their tax.” The knowledge that she does not pay tax herself in no way restrained her.
The better sort of journalist and, naturally, diplomats are appalled by the Greek charges of hypocrisy that followed. The world has tolerated an over-generous clause in the 1961 Vienna Convention that exempted “diplomatic agents” from tax for more than 60 years. In any case, they added, whether IMF officials and other diplomats pay tax has nothing to do with the eurozone’s breakdown. They forgot that perks that no one notices in ordinary times can in crises become as intolerable as the tax exemptions of the aristocrats and clerics were to the French revolutionaries of 1789. In a crisis, the elite has to convince the masses that there is a rough equality of sacrifice – a connection between them and us – or lose legitimacy.
British Conservatives ought to know that by now. If they are defeated at the next election, historians will be able to say that their fall from power began on 21 March 2012, when George Osborne gave the super-rich a tax cut. Tories can argue that allowing the wealthy to keep more of their money will enhance growth, although there is precious little evidence of that to date. They can say that a 50% tax rate encourages tax avoidance and evasion. But whatever they say, no one is listening. By favouring the wealthy, the coalition has gone from being a national government to an alliance of public-school boys that looks after its own. From the moment Osborne finished his budget speech, “we” were no longer “in this together”.
“God help me, I can perceive nothing but a certain conspiracy of rich men procuring their own commodities under the name and title of the commonwealth,” wrote Thomas More in his Utopia of 1516. Too many voters for ministers’ comfort now look at the coalition and see the same.
At least MPs retain the power to pass a motion of no confidence in Osborne. Alternatively, David Cameron can move him from the Treasury or the electorate can throw out the coalition at the next election. Limited democratic action remains possible despite all the constraints globalisation, bond markets and treaties enforce.
In the eurozone, there is no “we” capable of exercising control. The absence of a “demos”, of a legitimate political community able to act collectively, explains why the richest, most educated region on the planet is paralysed – to the undisguised amazement of the rest of the world. The walls of the prison in which the eurozone has incarcerated southern Europe and Ireland have been described often enough. National governments can no longer tell central banks to print money to pay off debt. They have no control over interest rates or exchange rates. Their currencies are as fixed as if they were in the gold standard and set at a permanent competitive disadvantage against Germany. Decisions are taken by the IMF, Brussels and Germany rather than sovereign electorates. As we know, power has passed beyond national control.
The European elite’s bovine response can still generate incredulity, however. “I can say the medicine is beginning to work,” announced José Manuel Barroso, the European Commission president, last month, as youth unemployment in Spain passed 50% and the Greek and Spanish banking systems careered towards a crash.
The EU left attacks Barosso and his kind for his complacency and callousness and every insult they deliver is deserved. But all the left’s options come down to Germany, the Netherlands and Finland bailing out the south. Either the north accepts the inflation that will come from the European Central Bank becoming a lender of last resort or the north transfers tax revenues south.
German society is furious. Publishers have rushed out books with self-explanatory titles such as Save Our Money! and The Illegality of the euro-Rescue. The working stiff in Dusseldorf isn’t being selfish, or no more selfish than the working stiff in Piraeus who wants his money. He, too, can ask a hard democratic question. How far down the line do north European governments go in giving Brussels budget-making powers before the connection between taxation and representation snaps?
Raoul Ruparel, of the sceptical Open Europe thinktank, told me that if a new European treasury was run by representatives of national governments, it would have democratic legitimacy but would merely reproduce today’s impasse between north and south. It could be run by bureaucrats, who could send southern Europe the help it needs. But then it would have no electoral mandate.
Speaking of Utopia, Immanuel Kant imagined in 1795 a world of republics living in perpetual peace. He was not being wholly idealistic. For decades, the European Union fulfilled the prediction of Kant’s successors that free, democratic countries could enjoy harmonious co-operation. But the EU has developed into something Kant could not imagine. It is neither a state drawing legitimacy from the loyalty of its citizens nor a free association of sovereign republics, but something in between.
Michael Ignatieff worried that if the lumbering hybrid collapses, nationalist and fascistic forces will once again rise. It’s a reasonable fear, as recent European elections show. But I worry more about what will happen if the euro stays and Europeans realise that their elections are shams, their votes count for nothing and the decisions that affect their lives are taken elsewhere.
By Tom Stokes – Republic Day Ireland
30 May 2012
From British Empire to EU Empire
–There are fools who decry history as if it was irrelevant to the present or the future. Here is an extract from a piece my late father wrote in 1969 on the subject of the drive towards membership of the EEC, now the EU. Relevant? I certainly think it is, in the context of the vote we are going to cast, or not cast, or cast unwisely, on May 31st.
“In the Ireland of the sixties, things matter more than people. Christian and human values are uneconomic, and may as well be scrapped. The heroes now are the cranes, bulldozers and automated production lines. They enable labour forces to be reduced dramatically, cutting costs to the minimum. Those displaced may emigrate, or just stagnate – it’s not important. We are in with the big boys now, and they are playing for keeps.
To get into the Common Market we are willing to barter our sovereignty. We hadn’t got it long enough to get used to it anyway, but the fools who won it for us would have expected us to put a bit more value on it. They could have saved their lives if only they had a working knowledge of economics. We have put a price-tag on everything, now.
The French, who resist our entry into Europe must be mad. Our country is ripe for exploitation – our Government ready to stand down as an effective authority, so that big business can take over, or so it seems. Our mobile labour force is ready to be sent, as they’ve always been sent, wherever there’s hewing of wood, or drawing of water to be done. The common bond is dissolved to prove how European we are. If we had any pride left, we’d swallow it, and yet the French still don’t want us. What are we to do?
We must push harder. Tell them this is the Ireland of the soft sell, land of the evergreen sucker, The Misty Isle where fools are born one-a-minute ready to trade with all comers on any terms. We love glass beads, mirrors and cheap gold bricks, south-sea bubbles, bubble-car factories, aeroplane shadow-factories, Singer stamps, trading stamps, Free Trade Agreements, the lot.
This is a fair land, flowing with milk, and milk products. It’s a con-man’s paradise – we’re dying to be taken in. This land was our land, it’s going cheap.
Our economists are sporting types who go their way, casting our salmon to catch someone else’s sprat, not without some little success. Our chaps land a big one sometimes, providing an occasion for backslapping and bouquet-tossing. Bouquet-tossing is becoming something of a national art-form, and it takes the harm out of long trips to distant sunny seminars where economists go to lecture and recuperate.” Etc…
–Pearse Stokes 1918-1987
If a Yes vote is our only option, let’s make the most of the only thing we’ve got left: haggling about the price
DURING THE Northern Ireland conflict, the IRA trained its members to withstand heavy interrogation. Pick a spot on the wall, stare at it and keep your mouth shut.
For Irish and European leaders, the spot on the wall is the fiscal treaty. Insistent questions – about democracy and justice, society and sustainability – are screaming out for answers.
But the eyes are fixed on a single spot and the mouths are firmly shut to everything but empty blandishments. The point is the same: to resist all efforts at the interrogation of current strategies and their consequences.
The rest of us, however, should be asking the questions. Let’s begin with what should be the simplest: who is to vote on the treaty? Answer: the sovereign Irish people.
But no such people exists. Scarcely a week goes by without one Minister or another on the radio, explaining the cut du jour, usually to something that makes the lives of vulnerable children or adults a little more bearable, by saying that he/she has no choice, that we have lost our sovereignty.
And they’re not lying. Ireland is no longer a self-governing nation – the most important economic and fiscal decisions are taken elsewhere.
The notion of a “sovereign people” exercising that sovereignty in a referendum is a fiction. Our feet have been cut off but we’re told to perform Riverdance for Nicolas and Angela’s euro-vision show.
Which brings us to the second question: do we actually have a choice?
If there is no choice, the act of voting is a charade. If they take the exercise at all seriously, both the Taoiseach and our rulers in Frankfurt and Brussels have an obligation to spell out for us what the consequences of a No vote will be.
Will the ECB pull the plug on its financing of the Irish banks? Will we be barred from further recourse to the European rescue funds?
Would the International Monetary Fund, which is outside of the treaty’s frame of reference, help us if our gallant allies in Europe will not?
To even begin to debate the treaty, we need this information and it’s the Government’s job to supply it.
Is there a gun to our heads or is there not? If we are facing the economic equivalent of “immediate and terrible war”, there’s nothing to debate. The vote is not Yes but Yes, Sir.
Or, if in fact there are no dire consequences to flow from a rejection of the treaty, we need to know that, too, because we could then discuss the treaty on its (in my view rather meagre) merits.
But the line from both our domestic and European leaders is that they don’t have to talk about the consequences of a No, because a No vote is unthinkable – literally.
European Central Bank boss Mario Draghi said last week that “I just don’t want to think” about the possibility of a No vote. The corollary is that the only “thinkable” vote is Yes.
In which case, why bother to hold a referendum at all? Because the Constitution requires it.
But which Constitution would that be? The one that states unequivocally that the only body allowed to make governmental decisions is the Cabinet acting collectively? That Constitution is in silent suspension.
It is a simple matter of fact that one of the most momentous decisions in the history of the State, the bank guarantee, was not made by the Cabinet collectively.
It is also a matter of fact that the 2012 budget was sent for scrutiny and approval to the Bundestag in Berlin before it was presented to the Cabinet in Dublin.
Coming over all precious now about our sacred Constitution is like having everybody rush to fix a minor technical fault in the steering mechanism while ignoring the fact the ship has just been holed below the waterline.
So, if we’re not a sovereign people, we don’t have a choice, and piety about the Constitution is just another exercise in denial, what are we left with?
If this is all really just a ritual dance we have to perform for our masters, we may as well let it be known that the enthusiasm with which we perform the necessary gyrations will be determined by the colour of the client’s money.
Perhaps the most fatuous thing Enda Kenny has ever said was his claim, “The Irish people will not be bribed.”
The image it conjured was of a proud, haughty Cathleen Ní Houlihan contemptuously dismissing the offer of a bung from a shower of vulgar foreign parvenus.
The idea that Cathleen wouldn’t find a proposition immensely more attractive if it were accompanied by a fistful of euros tucked into her threadbare garter scores high on black comedy. But abysmally low on realism.
If we’re supposed to be a free people, we should act like one and insist on our right to be fully informed about the consequences of our choices.
And if we’re not, we should make the most of the only thing we’ve got left: the whore’s prerogative of haggling about the price.
The Central Bank ‘created’ the money needed to keep banks solvent, writes Peter Mathews
26 February 2012
The last government agreed that the State should pay €31bn to IBRC (formerly Anglo and Irish Nationwide) over a 13-year schedule ending in 2025. The first payment of €3.1bn was made in March 2011. The next payment is due on March 31.
If the European Union and the European Central Bank force us to make this payment, it would amount to increasing the totally unjustified, odious debt burden on the people of Ireland.
How is it unjustified? How is it odious?
Loan losses that occurred in the Irish banks following the financial collapse in 2008 were calculated in March 2011 at €75bn. In the 12 months since then it is becoming increasingly apparent that mortgage loan losses will get progressively worse.
Evidence is mounting that the total loan losses in Ireland could rise towards €100bn.
Throughout 2008 and 2009 there was a slow motion run and controlled implosion of the Irish banking system. In response, the ECB advanced massive loans to the Irish banks and in turn the Central Bank of Ireland responded by providing Exceptional Liquidity Assistance (ELA) to the Irish banks.
Professors Karl Whelan, Brian Lucey and Dr Stephen Kinsella recently made excellent presentations to the Oireachtas Committee on the issue of the promissory notes and ELA.
They showed how the Central Bank of Ireland effectively created €45bn ELA money “out of thin air”. The Central Bank of Ireland doesn’t owe any of this money to the ECB, they said.
On a once-off basis, money was created and pumped into the Irish banks to keep them solvent.
When the Irish banks repay these ELA loans, the Central Bank of Ireland simply retires them. The money literally disappears.
Therefore, the €31bn ELA money created by the Central Bank of Ireland, and advanced to IBRC to cover promissory notes, can and should be written off.
Specifically, on March 31 next, the write-off by the Central Bank of Ireland of €3.1bn ELA would mean that the Government wouldn’t have to borrow that money to pay the €3.1bn promissory note.
That promissory note could literally be torn up.
The same applies to all the remaining €25bn ELA loans to IBRC and the remaining €25bn promissory notes on IBRC’s balance sheet.
There is nothing dubious or wrong about doing this.
Losses which should have been borne by bondholders have, wrongly, been dumped on the people of Ireland.
Normally, when banks collapse, their funders do not get all their money back. In Ireland, bondholders were redeemed all their money with interest at the insistence of the ECB.
Since the end of 2008, as payments to bondholders fell due, neither the banks nor the State had the resources to pay them.
That is where the ECB stepped in. It lent approximately €135bn to our banks to enable them to repay the bondholders and also to replace lost deposits.
The ECB became fully complicit in dumping this bill onto the people of Ireland.
Under normal capitalist principles, the ECB would not have shielded bond- holders from the consequences of their investments. They would have to accept that Ireland is “taking one for the team”.
Taking all this into account, again under normal capitalist principles, the ECB could not object to writing off up to €75bn of the loans it advanced to the Irish banks.
If the ECB is unwilling to do this, then the Central Bank of Ireland should top up its Exceptional Liquidity Assistance loans to the Irish banks to €75bn (in the case of AIB and Bank of Ireland substituting ELA for ECB loans) and then write it off.
The ECB has a limited ability to prevent the Central Bank of Ireland from doing this. It can only veto a proposal by the Irish Central Bank with a two-thirds majority of its governing council.
There are 23 members of the governing council, including Ireland’s representative, Governor Patrick Honohan.
So, if he and seven other members of the governing council support the proposal to write off the ELA money there is nothing Ms Merkel, Mr Sarkozy, Mr Draghi or anybody else can do about it.
But has Mr Honohan held discussions with ECB President Mario Draghi regarding writing off the ELA money? Has he lobbied other Central Bank governors? Has he lobbied the other eurozone countries in trouble so we can take a joint approach towards debt restructuring?
Writing off that €75bn would have a massive positive impact on Ireland.
Firstly, this would allow AIB and Bank of Ireland to pass on these write-downs to mortgage holders and struggling businesses, providing a much needed stimulus to the Irish economy.
Secondly, it would allow us to ‘tear up’ our obligation to redeem the €31bn promissory notes.
Overnight, our national debt would fall towards the Eurozone average and substantially improve our prospects of leaving the EU-IMF bailout programme.
We have been damned with faint praise from the troika. But the current EU policy of ‘kicking the can down the road’ just prolongs the crisis.
Our Government has shown willingness and fortitude in taking tough, necessary and often deeply unpopular decisions. It’s now time for the ECB to establish fairness within the eurozone.
If the European political establishment really believes we’re doing such a good job, the best way to show it is to agree to lighten the debt load on the people of Ireland by €75bn.
Peter Mathews is a chartered accountant and Fine Gael TD for Dublin South
Even so, there are still reasons to believe in the EU. Without it, Ireland would be in the Dark Ages, says Gene Kerrigan
February 19 2012
HERE’S the number to remember when we talk about Greece: 2,109. And here’s another, to keep things in perspective: 1,419. And here’s a word that’s supposed to mean something: solidarity.
Over the past week, we watched the bullying of a country that’s already on the rack. One demand following another. And as each demand was reluctantly agreed to, a new demand or two was unveiled. The Greek politicians twist and turn and try to meet the ultimatums of the EU bureaucrats, while at the same time trying to calm their angry, frustrated people. Stay calm, please, they beg. Please pretend the bastards are being reasonable.
And, just as financial support is dangled before them, so is the threat of utter chaos. You think this is bad, they are taunted. Wait until we kick you out of the eurozone.
What do our leaders in this country have to say about this bullying? Nothing. Heads down, lips zipped. It’s like you’re in the playground and some thug is tormenting a lad he’s never much liked, and now he’s got an excuse to thump him. Do you try to rally the rest of the class to stop this, or do you avert your gaze, thankful you’re not the victim?
A lot of dodgy stuff went on in Greece. There was the massive tax evasion by the comfortable classes. And the authorities looked on complacently — indeed, it was the country’s wealthiest, most powerful people who indulged in criminality.
In this country in the Eighties and Nineties, our own comfortable classes did the same, at the expense of the rest of us. It was known about at a political level, from Taoiseach Haughey downwards. It was known in Revenue, in boardrooms and in the banks — hell, the banks arranged it, the largest example of organised crime in the history of the State.
Of course, the Greek government deliberately misled the EU about its finances. Quite wrong of them. We can be sure that our government would never deceive its EU masters. But again and again our leaders have been caught misleading us.
That number at the beginning, 2,109 — that’s the average number of hours Greeks worked in 2010. And 1,419 — that’s the Germans. We in Ireland clocked up an average of 1,664 hours. So, the accusations that the Greeks are lazy, that they’ve been swaying in a hammock while the rest of us sweated in a workshop, are just not true.
OECD figures say they work the longest hours per week, apart from the Koreans. Other countries are richer because of historical accumulation and technology.
Greece alone didn’t cause the crisis, nor did Germany alone, or anyone else. It erupted from a kamikaze policy based around the euro, a collective miscalculation by the EU bureaucrats and political leaders.
Either they fix it together, placing the burden on those who benefited most from the bubble, or they hunt scapegoats and stumble through one financial skirmish after another until the whole thing fragments. They’ve chosen the latter course.
Here’s the BBC’s Paul Mason, reporting from Greece: “It looks like something changed, tangibly, in the past 10 days. The established parties lost belief in what the EU is forcing them to do; parts of the EU lost belief in it too; and the people — quite wide layers of society — lost belief in the political class.”
There are reasons to believe in the EU, despite the dominance of destructive, antiquated ideologies. Without its pressure on some social issues, Ireland would still be in the dark ages.
There were romantic notions of overcoming the nationalism that again and again made a charnel house of Europe.
But the pretence of a European identity has been shattered over the past year. The right-wing triumphalism that bankrupted Europe now offers only knee-jerk recipes for austerity. So, Greece is flayed, in a mixture of contempt and perverse moralising.
Here, we search for weaker countries with which to compare ourselves and suck up to the bureaucrats. Our leaders first picked on Iceland. We’re not like Iceland, they trumpeted. We’re not militant like those silly Icelanders who voted to reject a deal that would have forced them to pay the debts of reckless bankers.
Tell us what to do and we’ll do it, our leaders said. We’re submissive Ireland, not aggressive Iceland. To austerity and beyond!
How did that work out? Both countries took a hiding, as they were bound to in a world dominated by bankers and their political friends.
But here’s another couple of numbers. End of 2010, unemployment in Ireland, 13.9 per cent. And in Iceland, 7.7 per cent.
Then our leaders joined in mocking Greece. Michael Noonan wandered around America threatening to get a T-shirt made that said: “We’re not Greece.” A gas character, Michael. The people who told us we must be “at the heart of Europe” are now bent over and puckered up, kissing the backside of Europe. Our deference is so creepy that we dare not — in the miserable years to come — ask for the solidarity of any other country.
Manolis Glezos is an iconic Greek figure. In May 1941, aged 19, he climbed the Acropolis with a friend and pulled down the Nazi swastika, inspiring the growth of resistance. He was tortured by the Gestapo. When the Greek colonels took over at gunpoint in 1967 he was jailed. Last week, marching in protest at the pain heaped on his fellow citizens, he was gassed. Such things are never forgotten.
The grim-faced robots enforcing mindless austerity seem unaware that with every stroke of their pens they damage the institution they allegedly venerate.
By Bruce Arnold
Monday January 23 2012
Public recognition that a national debate is needed on Ireland’s future in Europe is growing despite attempts to throttle or pre-empt it. Last Friday, in the Dail, at a meeting of former Oireachtas members attending a seminar on Ireland and Europe, there were references to the growing dissatisfaction felt about bad leadership or no leadership or secretive leadership. A tide of public reaction is building.
Notable contributors included Alan Dukes, who heads what was once Anglo Irish Bank, and Geraldine Kennedy, former editor of the ‘Irish Times’. Alan Dukes made a statement about us being ‘led by the nose’, notably by Angela Merkel and Nicolas Sarkozy, referring to the former as “a very substantial lady who knows what she is doing”.
Apart from the word “substantial”, this is complete nonsense. Ms Merkel has led Europe throughout the euro crisis and has repeatedly failed to find a workable solution. She clearly does not know what she is doing for Europe, only Germany. If she does, it is not enough to get us out of the mess. As Wolfgang Munchau said last Monday in the ‘Financial Times’: “Now that she has got everything she wanted, the system continues to unravel.”
Lucinda Creighton, Minister of State for European Affairs, claimed: “We need the big member states to show leadership.” That is more nonsense. They are telling us what to do, in their own interest. That is not European leadership.
More interesting was Ms Kennedy’s line that there was a political and moral imperative for the Government to put before the people the question of whether we should support the new European fiscal treaty. She saw the referendum prevarication by the Government as immoral and lacking fundamental democracy involving “faith in the good sense of the electorate to recognise our long-term economic interest with Europe and with the euro”, and remain part of Europe as 10 other states are doing. By the same token, she means the democratic right to make other choices.
Ms Kennedy was ‘Irish Times’ editor during the two referendums on the Lisbon Treaty, steering the paper’s readers towards a ‘Yes’ vote both in 2008 and 2009. She lost on the first and only won on the second after a campaign based on dubious persuasions and even more dubious threats that instilled a degree of national fear that led to the biased outcome. The ‘Irish Times’ contributed to that one-sided approach as did RTE.
I suspect Ms Kennedy is revising views once held, despite faith in the electorate’s ‘good sense’, favouring the euro. What is not in doubt is her belief that there should be debate. She added a very strong statement about the massive effect on the Irish psyche of our loss of sovereignty together with rapidly growing debt. This weighs in favour of an open debate.
One government member agrees. Brian Hayes, in an article in the Irish Independent, took David McWilliams and myself to task for our views on the euro, characterising them as ‘car-crash economics’. He misrepresented our positions. He seriously misrepresented the eurozone when he said it was our most important trading area. It is not. We do the greater part of our trade outside it. But he made important points, raising questions about the banks, unfair debt, our competitiveness and possible future relationship with the sterling area.
The mantra: how good Europe has been for us and how good it can be, overshadowed his article.
I was encouraged to read the next day in Stephen Collins’s column in the ‘Irish Times’, approving references to Brian Hayes. Mr Collins commented on “the shallow level of so much of the debate on the EU-IMF bailout and our membership of the eurozone”.
But instead of helping that debate forward, he hindered it mightily by concealing the names of the two journalists Mr Hayes had quite specifically, and by name, taken to task. He substituted for Mr McWilliams and myself the description of us as “a coterie of prominent media figures who have argued consistently that the solution to Ireland’s problems is to leave the euro and establish our own currency”. His use of the word ‘coterie’ was pejorative. The OED definition of a coterie is “a select association of people with exclusive interests”. This is hardly an appropriate description of two working journalists who rarely see each other or discuss what they write.
By not naming us, he made debate more difficult. At the same time he criticised members of the Government for not coming out “with a clear and consistent message on the core problems facing the country”. So where does he stand? (My letter to the ‘Irish Times’, pointing out all this confusion and reinforced by one sent to the paper’s editor, did not appear.)
IN conclusion, I will turn to another dismal area of misrepresentation concerning Sean Lemass. Ronan Fanning suggests (Irish Independent, January 19) that my arguments about Sean Lemass are unsupported by evidence. He must know, as a historian, that evidence of negatives is very hard to find or manufacture.
It is much easier to say, as he does, that “Lemass … was an original thinker” and to interpolate from this his “support for the membership of the European Union, as it would become”. (My italics.) It did not become anything for us until after Mr Lemass’s death. And the EU has changed radically since then. What it has now become would horrify Mr Lemass. As to Europe becoming “a central tenet” of party policy, this was Jack Lynch’s doing between the commencement of his leadership in 1966 and our EEC entry in 1973. I forgive Professor Fanning his snide reference to my hero worship of Mr Lynch and his misrepresentation of the book’s title. If he ever read it, he would know that ‘Jack Lynch: Hero in Crisis’ referred to Mr Lynch’s proper demolition of Charles Haughey for his treachery over Northern Ireland. This was the crisis in which he played the title role.
Brendan Halligan’s essay on Mr Lemass (‘Irish Times’, January 18) is important for raising the unattractive status of Ireland as a potential member of the EEC in 1961. But he omits reference to OECD misgivings, at the time, over educational shortcomings, including the lamentable neglect of the education of children in the so-called ‘care’ of the Irish industrial school system. We were seen in the early 1960s as a benighted country, dominated by the church, making us an unattractive EEC candidate with poor levels of democracy. Mr Lemass knew about that and did nothing; his tour of capitals was a weak response to our exclusion.
However, we were not isolated. Relations with Britain were energetically sustained by Mr Lemass. Always the pragmatist, he saw the continuing and still relevant reality of the UK as a market for Irish goods. Mr Halligan completely ignores this aspect of Mr Lemass. He should read Bryce Evans’s new biography of Mr Lemass. The book washes all the other ones into the sea.
Taoiseach Enda Kenny has been accused of ceding more economic sovereignty at last week’s European summit deal.
Sinn Féin president Gerry Adams said the so-called fiscal compact agreed by every country in the EU, except Britain, includes a “golden rule on austerity”.
The commitment to a 0.5% deficit ceiling would be enshrined at constitutional or its equivalent level in the Irish legal system under the agreement, he said.
“There’s a huge contradiction between your assertion about restoring our economic sovereignty, and then at the same time signing up to giving away more of our economic sovereignty in this fiscal compact,” Mr Adams claimed in the Dáil.
This year’s deficit is expected to be just over 10% of the value of the economy, and Ireland is already bound to cut that to 3% within three years under the terms of the EU/IMF bailout.
The Sinn Féin leader asked if the commitment to go even further would go into the constitution, if a referendum would be held and how many more years of austerity would be needed to bring the deficit down to 0.5%.
But Mr Kenny said the political agreement in Brussels still had no legal standing and there was a great deal of technical work and analysis to go into it before it would be ratified.
“It’s in everybody’s interests that there be fiscal discipline and there be fiscal control by countries in the way that they draft their budgets,” he said.
“But don’t get the impression that we have a philosophy here of having a generation of austerity before us, because if we don’t fix the engine of our economy then we are not going to have a country.”
Separately, Fianna Fáil leader Micheál Martin said he “can’t get over” social welfare cuts in the Budget.
Mr Martin said changes in the way people are means tested meant low-income families in receipt of carers’ allowance are having their family income supplement slashed.
One such family, who had four children under 11 and only one parent at work, had their income supplement cut by 139 euro, he told the Dáil.
“That represents a savage cut for a family of six on one income,” he said.
“I can’t get over that any Budget would impose that size of an income reduction to families on very low incomes,” he said.
Mr Kenny said all the Budget cuts had to be made and that Fianna Fáil’s calls to reverse them were not possible or credible.
“The choices here are never easy and they are all unpalatable,” he said.
Tuesday 13 December 2011
NORTHERN Ireland’s two largest parties, the DUP and Sinn Fein, were last night both arguing in favour of a referendum on EU issues.
However, while the DUP backed David Cameron’s veto last week of a new EU-wide austerity package, Sinn Fein said he had done “the right thing for the wrong reasons”.
And while the DUP is arguing for a referendum on EU membership, Sinn Fein has argued for one on EU planned austerity measures.
Speaking in the Commons yesterday, Mr Cameron defended his decision to veto a new European Union treaty and insisted he was taking the “right course for this country”.
The prime minister was greeted by cheers from the Tory benches yesterday as he made a Commons statement, but Labour MPs drew attention to the absence of Deputy Prime Minister and Liberal Democrat leader Nick Clegg, who described the outcome of last week’s summit as a “bitter disappointment”.
Mr Cameron told MPs: “I went to Brussels with one objective: to protect Britain’s national interest and that is what I did.”
But Labour leader Ed Miliband said Mr Cameron had “given up our seat at the table” in Europe.
Mr Cameron said: “We went seeking a deal at 27 (member states) and I responded to the German and French proposal for treaty change in good faith, genuinely looking to reach an agreement at the level of the whole of the European Union with the necessary safeguards for Britain. Those safeguards, on the single market and on financial services, were modest, reasonable and relevant. We were not trying to create an unfair advantage for Britain.”
Speaking after the debate at Westminster, DUP deputy leader Nigel Dodds said the people of Northern Ireland “will have been pleased to see David Cameron prove that he is willing to take a stand for the benefit of our nation”.
He added: “The reaction by some, however, to this stand has been notable. It is clear that some groups see no greater crime than an elected representative standing up the pro-Euro steamroller and acting in the interests of a sovereign nation. These issues will have an impact right across the United Kingdom and as Northern Ireland’s reputation as a centre for financial services grows, we may increasingly see the importance of the decision locally.
“No doubt the prime minister will have been aware of his promise to grant a referendum on any treaty changes which would see further powers handed to Brussels and the strong likelihood that no referendum could pass the vote of the British public.
“Whilst that may have served as at least a partial motivation to the prime minister’s stance, we must now also look to the future and to what the United Kingdom’s relationship with the European Union will be. Whilst the United Kingdom is not part of the Eurozone it would seem even that the idea of a two-speed Europe has faded.
“There is still the possibility that those whose clear desire is to press ahead with ever deeper fiscal and economic union may outvote the United Kingdom in the future as a sign of their vengeful attitude towards those who will not comply. It is clear that the British public are supportive of the stance taken by the prime minister, but unfortunately a very large section of the public have never had a chance to have a direct say on our relationship with Europe.
“Whilst a recent call for a referendum on Europe was rejected, it has become increasingly clear that this issue will not fade away.”
He said the momentum will continue to grow for “a proper assessment of our future relationship with the EU”.
Sinn Fein were also suggesting a referundum yesterday, but only on the issue of EU austerity measures. Mitchel McLaughlin MLA told the News Letter the proposed EU austerity measures defy logic and cannot work.
“We need a real solution to the Eurozone crisis based on investment in growth and debt write-downs,” he said. “Failing that, people north and south need to have their say on a deal that is bad for all.”
Mr Clegg yesterday failed to attend the House of Commons to hear Mr Cameron defend his decision to veto last week’s proposed EU treaty.
The Liberal Democrat leader said that he did not want to provide a “distraction” by appearing in his usual place at the prime minister’s side.
But his absence was branded “cowardice” by one Conservative MP and Mr Cameron’s statement was repeatedly interrupted by Labour shouts of “Where’s Nick?”
Mr Clegg was later forced to insist that the coalition was “here to stay” until 2015, despite confirming that he and the Conservative prime minister “clearly do not agree on the outcome of the summit”.
A senior Labour source branded the Lib Dem leader’s no-show “spineless”, telling reporters: “The Commons chamber is the place where you debate issues and air your differences – you don’t hide outside.”
And Labour’s foreign affairs spokesman Douglas Alexander issued an appeal to disgruntled Lib Dem MPs to join the opposition party in trying to win back friends and allies in Europe.
Mr Cameron was given a rousing reception by eurosceptics on his own benches, who hailed him for standing up for UK interests at last week’s European Council meeting in Brussels.
He told MPs that he had negotiated in “good faith”, but was forced to block a treaty of all 27 member states after other EU countries refused to agree to “modest, reasonable and relevant” safeguards for the City of London.
“We went seeking a deal at 27 and I responded to the German and French proposal for treaty change in good faith, genuinely looking to reach agreement at the level of the whole of the European Union,” he said.
“The choice was a treaty without proper safeguards or no treaty and the right answer was no treaty. It was not an easy thing to do, but it was the right thing to do.”
But Labour leader Ed Miliband accused Mr Cameron of neglecting the national interest in order to appease Conservative eurosceptics with a result that was “bad for business, bad for jobs, bad for Britain”.
In noisy exchanges which required several interventions from the Speaker, Mr Miliband quoted Mr Clegg several times in his dismissal of the prime minister’s claims for the summit.
“How can you expect to persuade anyone else it’s a good outcome when you can’t persuade your own deputy?” he said.
It was not a veto “when the thing you wanted to stop goes ahead without you”, he added. “That’s called losing, that’s called being defeated, that’s called letting Britain down.”
Branding the outcome of the summit a “diplomatic disaster” for the UK, Mr Miliband accused Mr Cameron of “walking away” from talks instead of negotiating a better deal for Britain.
But the prime minister responded by demanding whether Mr Miliband would have signed up to the proposed treaty, which was designed to provide a new “fiscal compact” to impose budgetary discipline on the 17 eurozone states.
l The Alliance Party was asked for its views on the EU crisis yesterday but was unable to comment.
Monday December 12 2011
IRELAND has closer connections with Britain than with any other European country. We do more trade with Britain. We speak the same language. We have, or had, the same democratic standards, our own emerging, with independence, from the British model. The same applies to our laws and a good deal of our legislation.
There are few men and women of even moderate means who do not rely on the British financial markets and hold investments. These are quoted on the London Stock Exchange, the affairs of which are closely followed. Share prices, comment on the market and practical advice are all part of the reporting in the main Irish daily and Sunday newspapers.
Investment, and other involvements, by no means end there. Despite the growth in second homes in other parts of Europe, it is probable that English property owned or invested in by Irish people is on a larger scale than it is with any other country.
A significant number of Irish people, some not aware that it is entirely legal, hold sterling bank accounts, and in the last two years it is undoubtedly the case that relatively huge sums, in euros, have been transferred out of the euro currency held by private citizens in Ireland and moved into British bank accounts or other financial depositories for savings.
It is therefore a matter to be questioned why our Government seems anxious to maintain, at all costs, the link with the euro, still under threat despite the best efforts of the euro states, backed by the balance of non-euro states, leaving our closest neighbour — in every sense of the word — isolated.
Not alone does the Government persist in this view — supported it would seem by a significant part of the electorate — but it refuses to have any debate about the matter or misrepresents what is at stake. We do not examine the technical and fiscal problems of making a change, nor discuss it with our nearest overseas neighbour, nor, most importantly of all, consider collectively with the people of Northern Ireland what we all, as a people fighting to survive, should do.
In addition, the Irish Government seems to be frightened out of its collective wits by the idea of a referendum. All of this is entirely nonsensical, its irrelevance emphasised by the fact that, instead of such inverted hysteria driving us into panic and alarm, it is looked upon urbanely, something that will right itself in due course.
This is where the danger lies. We could be taken short by the private interest forces to which all of us are vulnerable, the banks and the markets. But that is now overshadowed by the darker figures of Angela Merkel protecting German interests, Sarkozy protecting French interests, and doing so with greater skill and duplicity than we have seen before. David Cameron has seen what this would do to British interests and backed away. We should do the same.
The banks put us into huge debt because of the modern economic fallacy that they should not be allowed to fail, backed up by the greed factor, which was that huge Irish bank debts had been created within the much wider international banking system. So we were made to take on that debt and to be controlled from outside this country, not for our own benefit, but to bear an unfair share of the burden that the irresponsible and unregulated European banking system had placed on us with the connivance of the EU. Nothing that we have seen up to now will compare with the strict controls that lie ahead if we complete the inter-governmental agreement.
Shamefully, we played our part. We were led into absurd levels of prodigality, unregulated by the State and virtually ignored by an equally irresponsible Europe. We are being led now into absurd levels of restraint that will cripple us.
The markets were not and are not taken in by this completely undemocratic sleight-of-hand. They know fiscal instability since they profit by it throughout their working lives and profit from the misjudgments of bureaucrats. Their naked desire for power distorts their judgment on the more ferocious desire for profit within the markets.
Roughly 14 times in as many months Brussels has got it wrong. The markets have been briefly persuaded but have then lost confidence again. The threat has grown, creating panic, and though new solutions were promised, they were not new but the same.
The latest development of a firewall protection by means of a new international treaty, described as ‘inter-governmental’, is a different approach altogether. Not surprisingly, it ran into immediate trouble with the United Kingdom, isolating Mr Cameron, who has since been the recipient of an unwarranted hysteria throughout Europe and in this country.
This firewall approach and the ‘inter-governmental treaty’, which we have already signed up to in all but name, brings us to the present, and brings us to the biggest crisis of all. The supposed referendum is a red herring. It will not be needed to complete the EU takeover of all our economic and fiscal discretion, making us a slave nation to European power. That was achieved last week. It was urgently needed because neither the markets nor the banks, nor the EU nor the ECB, nor Mr Sarkozy and Ms Merkel, can wait for a EU Treaty.
Instead, Ms Merkel, backed by Mr Sarkozy, have their own inter-governmental mechanism. Referendums are history.
This is a deal that requires the surrender theoretically of all eurozone member states of their powers to run their own national budgets — in practice, of the 11 weak states to be governed by the seven strong ones, led by France and Germany, operating through Brussels.
That is what ‘intergovernmental’ means. And if that puzzles anyone, then the meaning is what Ms Merkel and Mr Sarkozy say it is.
Moreover, they will direct the process. The EU Treaty may follow. Who cares? What’s a referendum more or less? It won’t mean anything. The deed has been done.
This will almost certainly threaten to diminish the UK financial market. It will also lead to the equalising of EU taxes. We could well find ourselves on the wrong side of controls between the eurozone and non-euro countries, notably the UK.
Full fiscal union as defined by Germany will mark the final days of any of the safeguards through veto or simply through non-approval that we trusted in as the EU was built up with our participation. Apart from appearing in photographs, attending at dinners, signing papers and saying yes, and smiling all the time, our leaders will have turned into wooden puppets, their noses growing longer and longer as they tell their own people more and more lies.