Two big problems with Lisbon the voters may have missed…

The fear, loathing and grief over the lost referendum has been palpable, both in some of the commentators on the pages of Irish newspapers, and in the news emanating from that peculiarly small bubble, call it a cocoon, around Leinster House. John Waters this morning for instance, blames the voters for voting on an issue they didn’t understand. Of his father voting for the 1937 Consitution, he notes: “the idea of voting against a proposal because he did not grasp its implications would for him have amounted to sacrilege.” Hmmm… yes, well, except that that’s tantamount to the salesman blaming the customer for not buying the goods. Over in the FT, Martin Wolf thinks the Irish people were right to send the Treaty back to the manufacturers. On two counts:

The first is the notorious passerelle clause, which provides for unanimous agreement to extend majority voting to new areas. But once that happens can individual governments ever reclaim jurisdiction? These are among the many matters left open for decision by the federalist-inclined European Court of Justice. The BMDF publication recalls Sir John Major’s boast when he was British prime minister that the subsidiarity provisions of Maastricht would enable perhaps 25 per cent of EU regulations to be repatriated to member states. Not one has been.

This was an important part of the Libertas pitch. But he notes something else that was perhaps of less concern to the Republic, but is likely to be more important in the UK and other countries:

…the so-called Charter of Fundamental Rights which, unlike the much earlier pre-EU European Convention on the Protection of Human Rights, enshrines collective bargaining and union privileges, is to have the same legal value as the treaties. The UK and Poland have a protocol stating that no extension of EU competence over national labour law is intended But how safe is this exemption?

This brings me to the second eurocrat ambition: to entrench the so-called “European social model”. One aspect of this is that economic policy should more and more reflect the outcome of negotiations between employer and union bodies, preferably at the EU level. If you do not believe me you should look at a study by Deutsche Bank Research of EU labour market policy (May 21 2008). The authors are concerned to shift policy in a more market-friendly direction but have no doubt that this will have to be done in the framework of the “social partnership”.

The old-fashioned name for this process is corporatism, which is often confused with democracy. When, a few years ago, I asked at a Commission-sponsored meeting in Brussels whether we could have the EU without the social partners, I was assailed for being anti-democratic and never invited to these meetings again.

This is one reason why the mainstream left in Ireland, ie Labour and the Unions were broadly in favour of the YES campaign. Locking social partnerships into the European social model may have far reaching consequences in the long term. In the Republic it has put severe limits on the freedom of movement for governments in meeting with the dynamic of change of the last twenty years. Brittan lodges a classic objection to the implementation of the corporatist model on an EU wide basis:

There are dangers in policies determined by producer bodies selected neither by the market nor by a recognised political process. They tend to squeeze out the individual citizen, such as the unemployed worker priced out of a job or the unorthodox craftsman without credentials who could find work in a freer labour market. There are countries such as Austria that, for a time at least, had more success with this model than the UK had with its attempts in the 1970s. These are matters best decided at national level.

He concludes:

The best case that the supporters of Lisbon can make is that this latest treaty is a fairly minor step compared with previous agreements. But if I were in charge of language tuition in Brussels I should require all beginners there to find idiomatic translations into all the 23 official languages for the English saying: “It is the last straw that breaks the camel’s back.”

If some European countries such as Germany and France and a few others want to develop the centralist and corporatist model further, I do not see the objection. Indeed we are likely to see not a two-speed but a multi-speed Europe, even though the British Foreign Office will worry that the UK might not be absolutely sure of a seat at an imaginary top table. Too bad.

However it looks like the European noises off are becoming more conciliatory and the tough talk from the beginning of the week is hushng down. And the EU have now admitted that it has two problem countries not just one.

The full shape and extent of this ‘crisis’ is, even a full week later, is not yet entirely clear.