Irish Times: “For Ireland’s political class the prospect of another [EU] treaty referendum is nightmarish”

Whether the European Commission succeeds in introducing its proposed directly levied EU taxes, including a possible EU-wide value-added tax (VAT), in the face of opposition from a number of national governments, remains to be seen.

But we’re still looking at interesting EU times ahead…

In agreeing new sanctions for countries in breach of EU budgetary rules, France and Germany are now calling for a permanent bail-out facility for Eurozone countries, before the current one expires in 2013.

As the Irish Times reports

EU OFFICIALS are making tentative plans for a “convention” next spring to draw up changes to the Lisbon Treaty to establish permanent measures to settle sovereign debt crises in euro-zone countries.

The development, which could lead to another referendum in Ireland, follows the decision of French president Nicolas Sarkozy to back a push by German chancellor Angela Merkel for new legal powers to fortify the EU’s economic system.

There’s also an Irish Times editorial, and the paper’s European Correspondent, Arthur Beesley, gets an op-ed.

There are two strands to their plan, each of them far-reaching.

First, Merkel and Sarkozy want to allow the suspension of EU voting rights from governments that break budget rules. Such a penalty would amount to a political sanction from a country’s European peers, something with inevitable implications for the government concerned in their domestic affairs and European politics generally.

Second, they want to establish on a permanent footing the ad-hoc bailout scheme set up after the Greek rescue for any other distressed euro member. Furthermore, this would include procedures for “orderly” renegotiation of sovereign debt.

Given the upheavals seen in the euro zone this year, there’s nothing intrinsic to either proposal that goes so far beyond the bounds of current practice as to be unacceptable. What is particularly knotty, however, is the fact that they cannot be executed without reopening the treaties.

This presents a host of dilemmas, not least the likely requirement for a referendum in Ireland and constitutional limitations in Austria and Denmark over their governments’ scope for manoeuvre.

While only euro members would be affected by the legal measures themselves, in all likelihood the treaty change would have to be enacted in each of the 27 member states. This means British prime minister David Cameron, whose resistance to any increased powers for Brussels is clear, would be drawn into the debate.

And the BBC’s Gavin Hewitt adds

The euro is now like a heart patient. It has had the big scare. Now it will be subject to scans and stress tests. There will be much closer surveillance. Other countries will be able to insist on healthy behaviour. The eurozone will be monitored like never before.

What is not getting so much attention are the causes of this crisis. Countries with very different economies are harnessed together in a monetary union. Some of those countries used low borrowing costs to finance a boom. Unit labour costs grew. In order to regain competitiveness years of wage and spending cuts lie ahead. And where will growth come from? And how will jobs be found for the 23 million out of work? That is Europe’s real crisis.

To paraphrase Stephanie Flanders, it’s getting even closer to a fiscal union…

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  • Nordie Northsider

    Just a few months ago I had a man from that nice Labour Party at my door explaining to me that I should vote Yes in the Lisbon referendum re-run because the EU has always been a bulwark of social solidarity against right-wing monetarist thought. Today, with the Commission beating down reasonable appeals to put back the 2014 deadline for debt reduction, I don’t think they would get far with that line.

  • George

    “First, Merkel and Sarkozy want to allow the suspension of EU voting rights from governments that break budget rules.”

    Even “Vote Yes for Jobs” won’t wash for that one. That would be one hell of a referendum campaign.

  • Seymour Major

    This comes at a time when the Conservative led coalition Government is about to put a constitutional locking mechanism on Treaties which cede more power to Brussells.

    If Europe needs a new treaty, this is leverage for the Government. What can we extract from Europe? Perhaps we might get a bigger rebate? Whatever happens, a certain amount of political Eurosquirming lies ahead.

  • Expect the Eurotrons in the Irish Times and Establishment parties to roll over as usual. In that context, it is critical that 50:50 airtime is restored as constitutionally-required from state-broadcasters under the Coughlan Judgement. The last referendum was won primarily because of the economic-situation, but also because of blanket pro-Lisbon coverage including at the taxpayer’s expense through RTE’s circumvention of the Coughlan Judgement. This judgement – and the McKenna Judgement requiring equal public funding – are based on the Constitution’s requirement of ‘equal treatment’ before the law. A McKenna-style test-case is needed to establish an opinion from the Supreme Court on whether the State abided by those provisions. The flood of money from the EPP, PES, ALDE and other European Parliament groups needs to be investigated as it too seems constitutionally-suspected in the context of the McKenna Judgement.

    The EU has no right to take away all our voting-rights in the EU institutions. They are hunter turned gamekeeper. Despite the tired “Yes for Jobs – Yes for Lisbon” slogans of last year, unemployment has continued to soar and in fact, the media has largely swept the role of Europe in creating the crisis under the carpet e.g. the ECB’s interest rates of 2-5% during Irish economic annual growth of 10%, together with mass-immigration of cheap labour after the 2004 EU Enlargement (as acknowledged by Brian Lenihan on Newstalk interviews in the case of the latter) were largely responsible for the housing-crash. Essentially, we are being asked to swallow more of the medicine of centralisation that landed us in this mess in the first place. Methinks the UK, Denmark etc. would have to be mad to sign up to the Euro or this Treaty.