EU political union 'inevitable', claims Noonan

Sat, Nov 24, 2012, 00:00

Political union in Europe, involving a more centralised EU, is “inevitable”, according to Minister for Finance Michael Noonan. Speaking yesterday at a conference on the Government’s objectives for Ireland’s presidency of the EU, Mr Noonan also criticised “large countries” for their role in causing the euro crisis.

The Minister said that, as the debate develops on democratic control of new euro area governance structures, “it seems inevitable that there is going to be movement towards a more centralised political Europe”.

“All the building blocks that are being put in place, in my view, inevitably lead to some form of political union.”

He added that, in his view, it will be difficult to bring the peoples of Europe along with such a deepening of integration.

Speaking on the origins of the crisis, Mr Noonan said that when “the big countries broke the [budget] rules, those rules didn’t apply as far as the rest of the union was concerned”.

This criticism, which Mr Noonan made on two separate occasions during his speech, was a reference to the breaching by France and Germany of EU budget rules in 2004.

Mr Noonan rejected any suggestion that more centralisation of the EU in the future would limit the exercise of budgetary sovereignty for participating countries.

“The deficit limits are decided jointly – but what each member state spends and how they spend is a matter for them individually. The decisions we make at national level still matter and will continue to do so,” he told attendees.

Mr Noonan stressed the need for theses changes to be bolstered by “democratic legitimacy”.

“Any agreed changes require democratic debate and agreement. The role of our own parliament and the European Parliament is central to this debate.”

Mr Noonan went on to warn against misconstruing the nature of tighter budgetary rules. “Fiscal discipline is not the same as austerity,” he said.

On needed reforms of economic governance in the euro area, he said that he favoured a “big bang” approach , but he added that “change has to be agreed – it cannot be imposed and implementation takes time”.

He also rejected criticisms of the speed with which euro zone governments are implementing needed changes.

“Contrary to the criticisms of many, Europe is acting across a number of fronts in response to the crisis. We need to deliver on what has been committed to – to break the vicious cycle between banking and sovereign debt. Our focus continues to be on delivering what was agreed by the heads of state and government, including those of June 29th, 2012.

“These commitments were vital in giving certainty to the markets and are important for the credibility of Europe as a whole.”

Yesterday’s event was organised by the Institute of International and European Affairs and the Trans-European Policy Studies Association.