Article | Our status as a republic is in danger (published in the Sunday Independent)

Our status as a republic is in danger as we cede ever more power to the EU, writes Stephen Donnelly in the Sunday Independent, December 4, 2011.

Last Wednesday morning, Enda Kenny made a short statement to a largely empty Dail on next Friday’s meeting in Europe. His statement appeared to mark a fundamental change in government policy on European integration.

The Government’s policy, other than that of simply obeying the troika’s orders, has been difficult to discern at the best of times. But the Taoiseach had appeared to put it on firmer ground during his recent visit to Germany. Then, he was widely reported as ruling out change in the European treaties.

“We should work to maximise the effectiveness of the instruments available to us under the current treaties,” he said. “We should concentrate on what we can do now.”

At a time when Merkel, Sarkozy and Draghi, the new president of the ECB, are clearly indicating moves towards greater union, and even federalism, Kenny’s remarks seemed to be a clear statement that this small nation, at least, would resist. (Le Monde recently editorialised: “Setting reticence aside, what we are talking of is a further step towards Federalism.” Nicolas Sarkozy has said: “Our ambition is to seize the Greek crisis to make a qualitative jump in the construction of a system of economic governance of the eurozone.”)

Last Wednesday morning, that all appeared to change.

Kenny started safely enough: “We need to reach agreement on immediate steps to overcome the current crisis.” But then he called for “strong rules to ensure fiscal discipline”. The six opposition TDs in the Chamber sat a little straighter at this. And then he raised the stakes.

“Let me be clear,” he said. “Ireland supports the creation of stronger economic governance throughout Europe and especially throughout the eurozone. The people are paying the price now for the absence of such rules in the past. I am determined that we will never go back to the practices that drove our economy off a cliff, including reckless spending, poor oversight of banks and an over-reliance on property-related tax revenues.”

The potential implications of Kenny’s statement are profound. Ultimately, they lay the foundation for the end of the Republic. With talk of burning bondholders and standing up to European powers safely in the file of history marked ‘Meaningless election promises 2011’, government TDs have begun to pepper the Dail and the airwaves with phrases like ‘financial co-ordination’ and ‘fiscal discipline’.

Shortly, government TDs will begin to explain to us that, really, we’re only talking about giving existing treaties some teeth. Sure, haven’t we already signed up to financial rules? Sure, isn’t the reason we’re in this mess because we didn’t obey the rules in the first place? Sure, doesn’t this just make Ireland stronger and protect jobs?

The answer to these soundbites is ‘No’. The most obvious set of economic rules comes from the Maastricht Treaty. By signing this in 1992, we and others agreed that our debt to GDP ratio would not be higher than 60 per cent, and that our budget deficit would not be more than three per cent of GDP. By 2010, every signatory country bar two had broken these rules, including France and Germany. So would letting Germany sue us for breaking those rules (as Merkel advocated last Friday) save us from ourselves? It would not — during the bubble, when the foundations of the current crisis were being laid, Ireland was running a huge budget surplus. In 2006, our debt to GDP ratio was less than 25 per cent.

So, simple guidelines like those in Maastricht will not achieve the Taoiseach’s stated objective of ensuring we never repeat the mistakes of the past. If stronger eurozone governance were to be able to tackle “reckless spending”, regulatory failures and tax imbalances, it would have to be highly invasive.

Ultimately, it would need the ability to determine, or at least veto, changes to income tax, corporate tax, spending on infrastructure, social welfare, education, and so on. And make no mistake — taxation and spending rules forced on Ireland from Europe would be done in the best interests of Europe, not of Ireland.

In this context, the logic I heard the Taoiseach spell out last Wednesday is this: The previous government made horrendous mistakes. It seems that we in Ireland are not capable of governing ourselves. As such, in order to avoid such mistakes in the future, we should give away our decision-making powers in these areas to someone else. In short, rather than taking our sovereignty back from the IMF, we should pass it over to the ECB, permanently.

It is shocking an Irish government might voluntarily agree to a permanent ceding of that degree of sovereignty. If it succeeds, then it would not be credible to describe ourselves as a republic.

Last Wednesday morning, the Taoiseach continued: “Ireland should not fear this process, we should welcome and embrace it.” Let us be clear — the ECB and the European political powers have spectacularly mismanaged this crisis from the start. Ireland was forced into an IMF bailout at the insistence of Europe. We are paying tens of billions of euro to speculators on secondary bond markets at the insistence of Europe. Sarkozy is out to change our corporate tax rate. We had to deal with cheap money during the bubble because it suited Germany and France. I for one do not ‘welcome and embrace’ a process that could cede permanent control of our taxation and spending policies to these same people.

The German philosopher Jurgen Habermas has warned Europe is becoming a “post-democracy”. “The European project can no longer continue in elite modus,” he says, criticising Angela Merkel’s government for its policies of short-termist self-interest.

Our countries may still, individually, be democracies, but power is quickly slipping from those democracies to a European centre that appears to be less democratic. As Irish economist Stephen Kinsella has pointed out, there are now three technocratic governments in Europe: Italy, Greece, and Ireland, where the IMF’s Ajai Chopra is the key decision-maker in economic governance. In none of those countries has there been any significant protest at the imposition of these unelected authorities.

Do we value democracy so lightly? And if so, why? Habermas suggests an answer, in the German context: “Our politicians have long been incapable of aspiring to anything whatsoever other than being re-elected. They have no political substance whatsoever, no convictions. The political elite have actually no interest in explaining to the people that important decisions are made in Strasbourg; they are only afraid of losing their own power.”

In Ireland, many people are deeply cynical about politicians. The ever increasing list of election U-turns by the new Government is simply adding fuel to this particular fire. People think everything that comes from the Government is spin, and everything that comes from the opposition is just partisan positioning. In Ireland, Italy and Greece, at least, they no longer trust us to run the country, and so they’re partly relieved when supposed “technocrats” take charge.

So what happens next? Well, if the Taoiseach’s Dail speech is an accurate statement of policy, our Government will acquiesce to whatever proposal for greater centralisation gathers support in Europe. That could be minimal — a combination of euro bonds with limited fiscal constraints, which, if broken, would lead to fines rather than intervention — or it could, as some of the rhetoric emerging from Paris and Berlin has suggested, seek to take a quantum leap along the path to a federal Europe.

That may help address the economic crisis, at least in the short term. But if we take that quantum leap, in a situation where we have been motivated not by ideals, but by fear and threats, in a situation where the political leadership has made no attempt to engage citizens in debates about the options facing them, we will be attempting to prop up the European economy at the expense of European democracy.

The tools required to solve the European economic crisis are already available. If the leaders of the biggest European nations are unwilling to wield them, the answer is not to grant them even greater power.


  • Brilliant. EK is a coward.

    As far as I can see, the Government should attempt to combine with Italy, Greece, Spain, Portugal to negotiate as a bloc. Germany cannot afford for us to all to collectively default and leave the Euro. Our demands should therefore be for eurobonds. With almost every european country suffering in the bond markets, the problem is clearly not entirely due to fiscal incompetence as we are led to believe. The introduction of so-called safe pairs of hands in Italy and Greece has failed to change anything other than jeopardise the ability of the periphery countries to combine as a bloc. A far scarier prospect is losing the ability to take command of our own affairs. Does Enda think Padraig Pearse checked the markets when he stormed the GPO? Just because our past politicans have been useless does not mean that this generation will be quite as incapable. Such deference to the EU and IMF is incredulous and fails to acknowledge the idiotic policies these institutions have already imposed/recommended. The idea that the EU will ensure that Ireland stays on an even keel is just not true. Take for example our experiences in the 1800s under the British Empire (two famines) or that of the Ukraine under the USSR (another major, unnecessary famine).

  • Suomotu1

    Ha ha.” Our status as a
    republic is in danger.” We haven’t been a republic since 1973 for feck
    sake and to insure that, we invited the raping, pillaging and
    bankrupting IMF in to “Help” us. 540 billion of our off shore resources
    now signed away to foreign corps royalty free. No wonder the Norwegians
    are laughing at us. One of those corps is Statoil. The republic of
    Ireland is long dead. What’s in danger is the people not bothering to
    stand up, and defend what belongs to them instead of saying “Ah sure
    it’s grand take all our wealth, our children will deal with it.”
    Disgusting Irish attitude. SELL OUTS Everyone of us! We could have been
    the Saudis of europe but we will remain the so called Mexicans of
    Europe. Why? Because it’s all we deserve as a measure of our resistance
    to being occupied not by an invading army but by an invading bunch of
    bankers via the pen. Withdraw from Europe, kick out the IMF and print
    punts if you want to restore the so called Irish Republic! And in the
    meantime, get educated as to what IS happening around you as you sit on
    your lazy Irish arse reading this!!!

  • guest

    Well put, Stephen.  What is most remarkable about this government and its defenders is how they conflate the mature and necessary notion of fiscal discipline with the abject and odious notion of fiscal and political submission.  It is one thing for me to put myself on a diet, it is another to allow a neighbor to strap me to a table and, at their discretion, force feed or starve me… or worse.