A lament for Irish Independence

Last week I attended an event in Strasbourg organised by my good colleague Nirj Deva MEP (SE).  Nirj is a good Catholic gentleman, and he had invited the Irish Ambassador to the Holy See to come and address us.  The meeting was well attended, especially by Irish MEPs.

I listened carefully to what the Ambassador had to say (I may have appeared to be doing the Telegraph crossword at the same time, but I find this an aid to concentration), and I was especially struck by his passing reference to the legal guarantees which were attached to the Treaty of Lisbon ahead of the second Irish referendum, which he said “ensured Ireland’s independence”.  He said this, I noted, with a straight face and without any obvious hint of irony.  Indeed he said it with a casual fluency which suggested that he had used the phrase often before, that he took it for granted, that he had never thought to question it.

Where has he been for the last few months?  In a monastery on Mount Athos?  On a Trappist retreat?  In Shangri-La?  Wherever he’s been, the rest of the world has looked on aghast as Ireland has been stripped of its fiscal and monetary independence, and has been forced into the humiliation of accepting, like it or not (and it was clear that Irish ministers didn’t like it at all), a refinancing package cobbled together in Brussels, and designed not only to restore confidence in the Irish economy, but to create a firewall against contagion throughout the euro-zone.

Adding insult to injury, the initiative appears to have failed in its primary objective.  Despite the refinancing, Moody’s have just down-graded Irish sovereign debt, and the interest rate that the Irish government has to pay on its borrowings has reached eye-watering levels.  Ireland has major debt-rollover issues in 2011, and it is by no means clear that it will be able to finance them.  (See note below on credit rating agencies).

Legal guarantees to protect Irish independence?  When Ireland has, in fiscal terms, just been declared a protectorate of Brussels?  I don’t think so.

But the Ambassador might argue that he particularly had in mind those guarantees which apply not to fiscal policy, but to Ireland’s distinctively Catholic stand on moral and ethical issues, like its position on abortion, where its restrictive laws force pregnant Irish women seeking a termination to go abroad.  But sadly the news here is no better.  We heard only yesterday that the European Court of Human Rights has ruled that Ireland’s abortion laws breach the human rights of its citizens, and Ireland will be forced to change the law.

Now a purist might argue that the ECHR is not an institution of the EU, but of the Council of Europe, and thus that “clarifications” of the Lisbon Treaty could not have been expected to apply.  But accepting the European Convention of Human Rights is a condition of EU membership, and the EU and the ECHR are now so intertwined that the distinction is (may I say?) Jesuitical.

So Ireland can no longer control its fiscal policy, nor manage its sovereign debt, nor even legislate for Catholic moral and ethical values.  How much were those guarantees attached to Lisbon worth?  Not a lot.

Some on this side of the Irish Sea may take a jaundiced view of Ireland’s long struggle for independence from England, but it is a history which is woven into the fabric and the identity of Ireland, and in which (or at least in parts of which) the Irish people can take great and justifiable pride.  Yet those who fought and died in that struggle must surely be turning in their graves as they see, after less than a century, the hegemony of London replaced by the hegemony of Brussels.  Farewell Irish independence.  Today, Ireland is merely a remote off-shore province of Europe.

There are lessons here for the UK.  David Cameron has just achieved in Brussels a political declaration, along with France and Germany, that the EU’s “natural disasters” clause will never be invoked to require the UK to join in future euro-zone bailouts.  This is a worthwhile achievement, and I would not denigrate it for a moment.  But a political declaration carries less force than a legal guarantee, and we see how quickly Ireland’s legal guarantees unravelled.  I doubt that this reassurance carries any more weight than, for example, John Major’s Maastricht opt-out on the Working Time Directive – and we saw how easily the Commission by-passed that one.


Don’t shoot the messenger!

Brussels bureaucrats are furious with the rating agencies, because their downgrades of EU member-state sovereign debt are adding to the woes of the euro-zone, threatening to spread contagion, and making the task of Ecofin much more difficult.  They’ve proposed a solution: tighter regulation for independent credit rating agencies, and a new official EU rating agency designed to give a “fair” view of these matters.  The extraordinary folly of this proposal starkly illustrates the failure of the EU institutions to understand and respect markets.

Moody’s and Standard and Poor’s are not on a mission to undermine the EU, nor to destroy the euro.  They’re just trying to give fair advice to the markets.  They’re not perfect, and they make mistakes, but their mistakes are errors of judgement, not malice aforethought, and you cannot regulate for better judgement and more accurate forecasting.  They have no percentage in rocking the boat or breaking the single currency.

And how much credibility would attach to an official EU ratings agency born out of a desire to protect the euro by presenting a positive, rose-tinted view of sovereign debt?  About as much as the EU’s recent “stress-testing” of the banks, which unravelled within months.  The markets would not believe it, so there’d be no point in having it.  I can see that.  You can see that.  The markets can see that.  So why can’t the Eurocrats see it as well?

This entry was posted in Uncategorized. Bookmark the permalink.

2 Responses to A lament for Irish Independence

  1. Andrew Shakespeare says:

    The EU’s proposal to set up an official ratings agency to give a “fair” view of the markets is reminiscent of Robert Mugabe’s finance ministry declaring official exchange rates for the Zimbabwean dollar when everybody knew the street traders were offering many times that.

    The markets are hardly going to take seriously some official rate that will almost inevitably have been manipulated to reflect political goals. It’s difficult to imagine the world taking much notice even if the EU had a reputation for impartiality and integrity, which it certainly does not.

    One wonders whether the EU has completely lost touch with reality and dispeeared entirely into a fantasy world; an extension probably of the one in which the EU is a dyunamic force for good, enjoying the popular support — nay, gratitude — of the humble citizens of Europe

  2. To some extent, pro-EU organisations in the media (such as the BBC) make it far more difficult for key facts of the current crisis to impact upon a large proportion of the UK listening audience (and beyond). Of course, David Cameron’s political declaration is likely to be useless in practical terms and – the EU is evidently more than capable of ignoring or re-interpreting just about any legal arrangement which clashes with an EU policy. As the debt crisis grows and spreads throughout the EU, could there be a better time for member states to reconsider their position and start taking steps to leave this socialist grouping?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s