Issue of deeper EU Integration Key to Irish Treaty Campaign

Ireland’s debate on the fiscal compact treaty is being filled out by wider movements in European politics which give it heightened salience and topicality. Whichever side can best claim ownership of these movements is likely to win the referendum campaign.

The French presidential election and the Dutch political crisis joined last week to put popular fears of globalisation alongside more generalised worries about economic growth on top of the political agenda in Europe. They coincide with a deeper problem of legitimacy facing governing parties at national level and their executive interlocking through the EU. Their failure to deliver social and economic security in changing times reduces public trust and opens space for alternative political forces.

“These anxieties, this suffering – I know them, I understand them,” said Nicolas Sarkozy after the first round of French voting gave the National Front nearly 20 per cent of the vote. “They are about respecting our borders, the determined fight against job relocation, controlling immigration, putting value on work, on security.” This set the scene for his determined bid for their support. Whatever happens, such issues are more firmly in the public eye, amplified by Geert Wilders’s withdrawal of support from the Dutch right-wing coalition on similar grounds.

The French National Front and the Dutch Freedom Party want to roll back European integration, withdraw from the euro, expel immigrants and close borders. Their hard Euroscepticism is increasingly expressed in a pan-European discourse for a white Christian continent which is secure from economic globalisation and freed from Islamic immigration. The Breivik trial in Oslo raises similar themes in a much more chilling setting.

They are likely to be heard increasingly as the economic and euro zone crises topple governments and dominate elections, as in Greece, Spain, Italy, Portugal, Slovakia, Ireland, France and the Netherlands. Such a surge of political change will also affect Germany next year when it too has national elections. The German political debate will have to take these issues on board, even though as yet they have had no comparable right-wing populist surge.

More vocal demands for growth and employment strategies to supplement the austere disciplines and sanctions contained in the fiscal treaty are increasingly linked to ambitious plans for saving the euro. They come from liberals such as the Italian prime minister Mario Monti, conservatives such as his Spanish counterpart Mariano Rajoy, and social democrats such as François Hollande in France. They are driven by a common interest in economic recovery and a fear of deflation and double dip recession which transcend differing political ideologies. Enda Kenny added his voice to such calls on Friday in Cork, saying: “I do share the views of François Hollande for a growth agenda and investment.”

They all have an interest in reversing the appeal of hard right populism and retrieving political legitimacy by delivering better policies. That Angela Merkel appreciates these facts was seen in her rapid endorsement of a growth call from the head of the European Central Bank (ECB), Mario Draghi, last week. But they both believe it can be delivered by budget consolidation alone. They reject plans for Eurobonds, infrastructure project investment bonds, a new mandate for the ECB, greater use of the European Investment Bank or a European banking resolution regime put forward by liberals and Keynesians.

This is a very important emerging agenda, made increasingly relevant by refusal of the euro crisis to go away. The ECB’s €1 trillion banking liquidity initiative bought time, but not a resolution. This means the next period of European politics will be dominated by how to find one, whether Merkel likes it or not. That will involve deepening existing integration if the euro is to be saved by installing some such measures and agreeing ways to govern them. It could involve another treaty to supplement this one, and at the very least a transitional protocol to inscribe the politically necessary emphasis on growth and employment.

Ireland’s positioning in light of these developments will be deeply affected by the referendum result and should be discussed prominently in the campaign. If such a deepening is likely, where is it better to be while it is being negotiated – in the developing system, or semi-detached from it? If we vote No, we will stay in the euro but be suspended between a deepening inner core and an increasingly reluctant and sceptical United Kingdom. Non-euro members such as Sweden and Denmark, assuming they ratify the treaty, would be in a better position to influence the direction of policy than Ireland.

This issue of positioning is as critical as the debate on whether Ireland would be able to avail of the bailout mechanisms if the treaty is rejected on May 31st. It poses hard questions for those like Sinn Féin, whose policies on the euro are evolving away from British-influenced Euroscepticism towards a more engaged, if critical, stance. And it challenges Labour and Fine Gael to articulate their preferences for growth and deeper integration as part of their campaigning. That would give their supporters better perspectives – and more hope for change.

This column was first published by the Irish Times