Friday, December 9, 2011

France and Germany now calling the shots in Ireland

The EU's power brokers
Germany's Angela Merkel and France's Nicolas Sarkozy
They started yesterday and they're still talking in Brussels. Well, 26 European Union leaders are still talking because Britain's David Cameron sort of excused himself early this morning when he basically said, "out, out, out" to everything that was being discussed.

Of course, among the 26, two are doing nearly all the talking and each of the others is nodding vacantly or looking into their coffee cup wondering why they didn't take that university job they could have had.

Sure some of the others are less unhappy than others, but they all know they're being told to take it or leave it. That's how the European Union works. Nobody officially says that, but there's a reason why Germany's Angela Merkel and France's Nicolas Sarkozy had their own pre-summit summit earlier this week. They were hammering out what is to be done and now they're telling everyone else.

The answer to Europe's troubles, according to current rumors, is what they're calling a "fiscal compact," which is basically centralized control over each state's budgetary process. In short-hand this means each EU state remains a free country ... so long as they do exactly as the Germans and French want.
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Ireland's sovereignty is probably gone for good

Photo highlights tensions on day Michael Collins signed the Anglo-Irish treaty
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And what of Ireland? Well, to coin a phrase, we are between a rock, a hard place and the deep blue sea. All options look extremely unfavorable. Right now it looks like we'll swallow hard, look back longingly at all those nice sentiments and the long, historical struggle for independence and say good-bye to all that. Almost certainly Taoiseach (Prime Minister) Enda Kenny will come home from Brussles and try to put a brave face on what is a surrender, even if it's a surrender to reality in the eyes of many people.

The other options include turning away from the rest of the EU and asking if Britain will take us under its wing. This might be preferable to a Franco-German domination, but Irish people are not ready to accept that.

The last option is to - as much as possible - go it alone. "Ourselves alone" (Sinn Féin) again. This option will have a lot of appeal to the more hard core nationalists and could even carry the day if we get a vote on the new deal. It would mean severe financial hardship. Yet, Irish people are pretty stubborn when someone tries to tell them what to do and if we have a referendum any attempt by the Germans or French to bully us into a 'Yes' could well back-fire. We may well spurn the money if the mood is determined enough.

Oh, but that's the other rumor: we won't be getting a referendum on this new treaty to amend the rules of the European Union. We have had referendums for every EU Treaty until now, but this time, when the issue is fundamentally about Ireland remaining an independent state or becoming part of a United States of Europe we may not have a say. It's a rumor coming from Brussels.

There's a lot of gallows humor and jokes about German rule here at the moment. Irish people excel in laughing in the face of utter disaster, which is where we are now. I've indulged in it myself, calling the proposed new treaty the Anschluss Treaty.

However, a lot of the anger being directed at the Germans is not fair either. They're owed a lot of money and they want it back. They have a culture of saving and not borrowing and they're an old and aging population. They're fearful.

All of which is understandable, but that doesn't mean it's necessarily the right move for Ireland to be part of this new revised EU, this United States of Europe. In fact, with the United Kingdom outside our life inside the EU - the new tighter euro in particular - might easily leave us with the same boom/bust existence we've had since the euro was born.

Our peculiar place inside the euro, but trading mostly to non-euro countries leaves us exactly where we were before all these changes. As of now we still owe far more than we can pay back. I've seen nothing that says in exchange for agreeing to this new treaty that the EU powers will write off our over-sized debts. Without a big pay-off in terms of debt forgiveness it seems we may have opted for the worst least option available to us.

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