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A History of Iniquity, I: The EU & Eurozone Assault on National Democracy
international | eu | feature Wednesday January 16, 2013 20:28 by OO'C - National Platform EU Research & Information Centre 24 Crawford Avenue, Dublin 9 +353 (0)1-830-5792
Where we are on the 40th anniversary of joining the EEC.
The Political Basis of the EU:
The EU Treaties prevent voters at national level, their Parliaments and Governments from abolishing or amending a single one of these legal measures.
Why National Politicians Surrender Powers to the EU:
Every time new EU treaties abolish further national vetoes and shift law-making for new policy areas from the national to the supranational level, national Parliaments and citizens lose power correspondingly, for they no longer have the final say in the areas concerned.
Simultaneously individual Government Ministers, who are members of the executive arm of government at national level and must have a national parliamentary majority behind them for their policies, are turned into legislators for 500 million Europeans as members of the 27-person Council of Ministers which makes EU laws and rules. This body constitutes a committee of legislators, which is the classical definition of an oligarchy.
National politicians thereby obtain an intoxicating increase of personal power for themselves at the expense of their national Parliaments and voters, even though they may be open to being outvoted by a qualified majority on the EU Council. This is the reason Government Ministers tend to be so Europhile and to cooperate so willingly in denuding their own Parliaments and peoples of power.
The more policy areas shift from the national level to Brussels, the more power shifts simultaneously from national legislatures to national executives, and the more the power of individual Ministers and bureaucrats increases. Keeping on good terms with their fellow members of the exclusive Council of Ministers "club" of EU lawmakers becomes more important for national Ministers at EU level than being awkward in defence of their own peoples' interests. Increasingly they have come to see their function vis-a-vis one another as delivering their national electorates in support of further EU or Eurozone integration.
The EU's Assault on National Democracy:
A Member State on its own cannot decide a single European law. Its people, parliament and government may be opposed to an EU law, its government representative on the Council of Ministers may vote against it, but they are bound to obey it nonetheless once it is adopted by qualified majority Council vote. This devalues the vote of every individual citizen. Each policy area that is transferred from the national level to the supranational level devalues it further.
This reduces the political ability of citizens to decide what is the national common good and deprives them of the most fundamental right of membership of a democracy, the right to make their own laws, to elect their representatives to make them, and to change those representatives if they dislike the laws they make.
European integration is therefore not just a process of depriving Europe's Nation States and peoples of their national democracy and independence, within each Member State it represents a gradual coup by government executives against legislatures and by politicians against the citizens who elect them.
What was once national politics becomes provincial politics. Citizens more and more sense this and it depoliticizes them in turn. The EU has hollowed out the Nation States of the EU, leaving their traditional institutions formally in place but with their most important functions transferred outside, to the external EU level. It turns the State itself into an enemy of its own people, while clamping a form of financial feudalism on Europe.
From EU to Eurozone:
Seventeen of the 27 EU Member States in 2012 have adopted the euro. Ten EU Members retain their national currencies. The Eurozone rather than the overall EU is now the main terrain of Franco-German ambitions to establish a European superpower with themselves in the driving seat although, as stated above, it is increasingly obvious that Germany is the real driver, with France occasionally helping with the steering. Their leaders are frank in stating their ambitions:-
Here is Germany’s Chancellor Merkel on the current debt crisis:
"We have a shared currency but no real economic or political union. This must change. If we were to achieve this, therein lies the opportunity of the crisis… And beyond the economic, after the shared currency, we will perhaps dare to take further steps, for example for a European army" (Karlspreis speech, May 2010).
Here is French President Sarkozy a year later:
“By the end of the summer Angela Merkel and I will be making joint proposals on economic government in the eurozone. We will give a clearer vision of the way we see the Eurozone evolving. Our ambition is to seize the Greek crisis to make a quantum leap in Eurozone government…The very words were once taboo. (Now) it has entered the European vocabulary” (Irish Times, 23 July 2011).
And Sarkozy again in November 2011:
“There are 27 of us. Clearly, down the line, we will have to include the Balkans. There will be 32, 33 or 34 of us. No one thinks that federalism, total integration, will be possible with 33, 34 or 35 states. Clearly there will be a two-speed Europe: one speed that moves towards a Federation for the Eurozone and one speed for a Confederation within the European Union.”
Chancellor Merkel backed him up the same month:
“The debt crisis is a decisive moment, a chance to go a new way. The time and opportunity is there for a breakthrough to a new Europe … That will mean more Europe, not less Europe” (10-11-2011).
No EU "Demos" Which Could Democratise the EU:
There is no example in history of a lasting monetary union which was not part of one State, and therefore also a fiscal union. And there are of course many examples of States that were at once monetary unions, fiscal unions and political unions, which existed for long periods and which have disappeared into history. Where now is the USSR rouble, the Czechoslovak crown, the Yugoslav dinar or the Austro-Hungarian thaler?
A fiscal union means that a State has common taxes and public spending programmes whereby the richer areas and social groups within that State transfer resources to the poorer on the basis of a sense of common citizenship and an accompanying national solidarity. The Eurozone is a monetary union but not a fiscal union. It has no income transfer system comparable to that which exists within national States.
Within the monetary union there are big gaps in living standards, public sector deficits, balance of payments positions and competitiveness levels between the North European Eurozone countries and the so-called PIIGS countries – Portugal, Ireland, Italy, Greece and Spain. It was always economic folly to try to establish one interest rate and exchange rate for such diverse national economies, political cultures and institutional traditions, but that is what the political project of “Union-building” requires.
Yet it is obvious that there is no underlying EU or Eurozone “demos” or people, no sense among voters of a common European “We” which would make citizens in richer Eurozone countries willing to bear higher taxes to finance resource transfers to poorer ones in the name of a pan-EU or cross-Eurozone solidarity. The mutual identification and fellow-feeling among citizens which exists at national level and gives democratic legitimacy to National States, does not exist supranationally. Democratising the EU in the absence of a European people or "demos" is impossible. And such a demos cannot be artificially created.
This has always been the fundamental flaw in the European integration project. That however does not stop the EU elite, and particularly the Germans and French, the Brussels bureaucracy and their acolytes in the different Member States, from frantically seeking to get the peoples of the Eurozone countries to give up what is left of their democracy at national level in order to “save” the euro-currency.
Hence the current calls for direct EU supervision of national budgets and for a Eurozone Banking Union, Fiscal Union, Tax Union and Political Union, to take advantage of the current financial crisis to centralise more power in Brussels, Frankfurt and Berlin.
The more European integration is pushed ahead and the more the national democracy of the EU member states is undermined in the process, the more the EU loses legitimacy and authority in the eyes of ordinary citizens.
Consequently the greater and more certain the eventual popular reaction against it. To align oneself with such a misguided, inevitably doomed project is to be out of tune with history. It is to side with a supranational elite against the democracy of one's own people, to spurn genuine internationalism for the heady illusion of building a superpower.
Adopting the Euro the Biggest Mistake Ever Made by the Irish State:
The value of an independent currency for Ireland was shown clearly in the years 1993-2000. This was the only period in the history of the Irish State that it followed an independent exchange rate policy and let the currency effectively float while it gave priority to the real economy of maximising output and employment rather than maintaining a particular exchange rate.
The highly competitive exchange rate of those years was the principal factor underlying the 7% average annual growth rates of the “Celtic Tiger” period, although supporters of the euro project rarely mention this for obvious reasons.
In 1999 Ireland’s ultra-Europhile politicians decided to join the Eurozone on the assumption that the British would shortly do the same, which they did not and will not. In a step of utterly irresponsible folly the State’s main political parties decided to adopt the currency of an area with which Ireland does just one-third of its trade (40% of exports, 25% of imports).
At the time the State needed higher interest rates to restrain the “Celtic Tiger“ boom. But Eurozone interest rates in the early 2000s, which were now decided by the European Central Bank, were low to suit Germany and France, then in recession. This made the Irish boom “boomier”, as Taoiseach Bertie Ahern put it. The ECB looked on with blithe indifference. Unsuitably low interest rates stoked the Irish property bubble of those years, as they did also in Spain.
When the bubble burst in 2008 and Anglo-Irish Bank and other Irish banks became effectively insolvent, the ECB and the Brussels Commission forbade the Irish Government from letting them go bust, thereby imposing the burden of paying their bad debts on the Irish State and on Irish taxpayers who were not responsible for them. In that way the German, French, British and other banks which were the principal creditors of the Irish banks were assured of getting their money back.
Preventing bust Irish banks from suffering the consequences of their foolish borrowing would not therefore be copied by the other PIIGS countries and the “contagion” of putting national interests first in face of the debt crisis would not spread to them, thereby putting the very survival of the euro-currency in question.
In 2010 when the Irish Government’s burgeoning public sector deficit consequent on taking on this private bank debt threatened to shut it out of the international bond markets, the ECB pressurized Dublin into a Eurozone bailout programme. A foreign Troika representing the ECB, the Commission and the IMF took over the effective economic running of the Irish State to enforce that programme.
After ninety years existence of the Irish State the bankruptcy of its party political elite stemming from their uncritical Europhilia could not be more obvious. In May 2012 the State’s main political parties pushed through the Fiscal Treaty referendum to meet Germany’s demand that basic fiscal deficits for Eurozone countries should never henceforth be greater than 0.5% of GDP.
Later that year the Irish Supreme Court established retrospectively that the Government had in effect used unconstitutional means to do this by financing a partisan referendum information campaign out of public funds to secure a Yes result. This had happened likewise in the two Lisbon Treaty referendums.
One important effect of Irish Eurozone membership is that as Germany and France push for more integration to “save the euro”, the UK, including Northern Ireland, has no intention of joining the Eurozone and may well move towards a looser relation with the EU as a whole. This must lead to the political-economic divide between the North and South of Ireland growing deeper and a new dimension being added to Partition.
The above are some of the pleasures of “our currency the euro”, to use a favourite phrase of Europe Minister Lucinda Creighton. Yet in 2016 these same Irish politicians will seek to identify themselves with the men and women of the 1916 Rising who set out to achieve “the unfettered control of Irish destinies” and establish a State which would be “a beacon-light to the oppressed of every land” !
How the Eurozone Prevents Us Dealing Sensibly With Our Debt Crisis:
Logically there are only three ways of dealing with the immense burden of debt which now rests on the governments, private citizens and business firms in the PIIGS countries:
(a) to pay off the debt out of real economic growth;
(b) to forgive it or remit it or restructure it wholly or in part - these are all euphemisms for the same thing; or
(c) to inflate it away by printing money and depreciating the currency in which debtors pay back creditors. In practice the best course may be a mixture of the three.
But Eurozone membership is a major obstacle to each one. The austerity measures insisted on by the ECB, the Germans, Finns, Dutch and Austrians are causing recession throughout the Eurozone, so there is virtually no economic growth. Debt forgiveness means that Governments and taxpayers in the creditor countries pay the bills of the PIIGS countries, but the pan-EU solidarity and fellow-feeling which would be required for that to happen does not exist. Inflating the euro-currency would require the ECB to do the opposite of what it is charged with doing under the Maastricht Treaty and would outrage opinion in Germany and elsewhere.
So Eurozone membership rules out all sensible ways out of the crisis. Consequently the prospect ahead is one of years of stagnation as long as the Eurozone holds together.
Contrast Iceland, a small country which Ireland and the other PIIGS countries should take as exemplar. Iceland’s debt crisis in proportion to its population was much worse than Ireland's. Its banks had borrowed much more abroad than the Irish ones had. Iceland let its insolvent banks go bust and set up new clean banks to keep credit flowing.
It forced its foreign creditors to take a €60 billion loss on their improvident loans and came to an agreement with them on longterm repayment of the remainder. Iceland kept its own currency and restored its economic competitiveness by allowing its value to fall, imposing capital controls to assist it in the process.
Since the crisis broke in 2008 Iceland has entered and exited an IMF lending programme and returned to borrowing on the international bond markets. Instead of the Icelandic State taking on past private bank losses as the ECB pressurized Ireland into doing, foreign investors see Iceland as facing the future rather than the past and the State there as being in a much better position to repay future borrowings.
Iceland's economic growth in 2012 is estimated to be 3% - Ireland's being virtually zero.
Iceland’s unemployment rate is now 5%, one-third of Ireland's near 15%, which would be 20% but for heavy emigration - over 80,000, mainly young people, in the year to April 2011 alone. Compare Portugal's 16% unemployment rate, Spain.s 20% and Greece's 25%.
In the initial panic in 2008 Iceland’s Government applied to join the EU in the hope of a quick fix, but Icelandic public opinion has now turned strongly against that course. Back in autumn 2008 the joke used be that the only difference between Ireland and Iceland was one letter and six months, but that joke is now on us. The economic experts who predicted doom for Iceland and salvation for Ireland by following their very differen courses, have proved catastrophically wrong.
Tackling the EU/Eurozone Leviathan:
The project of EU/Eurozone integration is at bottom an attempt to overturn the democratic heritage of the French Revolution, the right of nations to self-determination, national independence and national democracy, across much of Europe in the interest of powerful political and economic elites.
As the world moves towards 200 States and more, this collective right to democracy within a State is now accepted as a basic principle of international law and the foundational value of democratic States and democratic politics within them - but not by the elites of the EU, who have subverted their own national democracies.
The Euro-integration project therefore makes the classical “national question”, the issue of national independence, of who makes the laws and rules of a society, whether the elected representatives of Europe’s different national communities, or unelected rulers and elites from outside, the key issue of European politics in our time. This is true even for countries like France, Germany, Britain, Spain etc. which were imperial powers themselves not long ago, with centuries of history behind them in which they dominated and laid down the law for others.
At year’s end 2012 Mr Dan O’Brien, Economics Editor of the Irish Times, a paper which editorially has for decades been a missionary for Euro-federalism, wrote:
"A banking union for the Eurozone has been agreed in mid-summer and it became increasingly obvious that the next change to the EU treaties will have to create something akin to a united states of Europe if the euro is to last" (28-12-2012).
Of course people were not told this when they agreed to adopt the euro in the first place.
So the vision of the Eurocrats is that the 17 peoples of the Eurozone must completely abandon their national independence and democracy, reversing centuries of European history in the process, in order to save the ill-starred euro-currency.
And assuming that that objective is attained, what happens then? Does European history come to a halt? Will the European Army of Chancellor Angela Merkel’s Karlspreis speech hold the resultant rickety edifice together? Can anyone seriously imagine that the PIIGS countries will rest content with being turned into the collective Mezzogiorno of a fully federal Eurozone?
The more the EU-elites and bureaucracy push ahead with the integration project, the more national voters everywhere dislike it and resent it. The more hostile will be popular reactions against its proponents when it implodes, as eventually it must. The ever-growing numbers of opponents of EU-integration across Europe now constitute an international movement in defence of national democracy and the Nation State as the locus of that democracy.
That is why genuine democrats everywhere who wish to advance the common good of their respective peoples, need to oppose every step towards further EU integration and to have as their objective the winning back of the State powers their governing elites have cooperated to take from them. This holds whether people are on the political Right or Left or Centre on other issues. This is now the guiding principle of progressive national and international politics for our time whether in Ireland or the other EU countries.
Good Sources of Information on the EU:
This document has been drafted for public information by Anthony Coughlan, Director of the National Platform EU Research and Information Centre, 24 Crawford Avenue, Dublin 9; Tel.: 01-8305792; Web-site: nationalplatform.org It is issued to mark the 40th anniversary of Ireland joining the then EEC in January 2013. Please feel free to adapt it wholly or or in part and circulate it to others if one wishes without need of reference to or acknowledgement of its source.