Choice should be restored to democracy

Sat, Mar 3, 2012, 00:00

WORLDVIEW:THE BATTLE to frame issues in the Irish referendum on the EU fiscal compact treaty began as soon as it was announced. How it plays out will have a crucial bearing on the vote, so close attention should be paid to the perspectives on offer.

Although simpler and shorter than previous EU treaties, much in this one has to be taken on trust. The wider policy context in which it is set and the other measures necessary to tackle the financial and economic crisis of the euro zone are not yet firmly in place.

Despite intense media coverage, the political process involved remains opaque. Political leaders here and elsewhere are unwilling or unable to fill in the gaps about the wider bargaining involved.

This leaves a more attentive and better informed Irish public unclear on what is at stake. They are entitled to better-argued political positions on which to make up their minds, rather than being forced back into the usual straitjackets of EU referendum rhetoric.

Eurobarometer surveys show a falling away of trust in EU institutions among smaller member states and those in rescue programmes since 2008, contributing to a deeper loss of legitimacy. There is a contradiction between the velocity of capitalist markets and the ability of democratic politics at national level to govern them.

A similar malaise pits responsible governments adhering to international regulatory and rescue agreements against their task as democratic representatives to deliver on voter preferences. Insofar as they systematically opt for the first over the second, this amounts to what the late Peter Mair referred to as a “democracy without choice”.

It will continue in the EU in the absence of a more effective common politics. Speaking at a conference at NUI Maynooth this week, Pascal Donohoe, Fine Gael chairman of the Oireachtas committee on European affairs, acknowledged such changing realities.

We have made a strategic choice to share sovereignty within the EU but political practice and voter perceptions have yet to come to terms with it fully. The period of credit expanding, cheap borrowing and globalisation is at an end and now has to be paid for. But by whom?

Solidarity is costly, but Donohoe believes a sound European economy based on the fiscal compact is a vast prize worth paying for. The velocity of economic recovery flowing from it could also be a great surprise.

Other speakers elaborated on these themes. Discipline rather than austerity is the preferred keyword in Germany and the high-spend, high-tax Nordic states, which have avoided debt crises. But we hear too little in the Anglo-American world of how they balance it with high private investment, social partnership and protection, and high spending on the knowledge economy. Fiscal and social compacts go together, and this needs to be made more visible for voters and citizens here.

Germany will not allow the euro to fail, we were told, and German chancellor Angela Merkel stands ready to make the necessary commitments. She has her own political difficulties in bringing voters along with her and therefore proceeds incrementally and pragmatically.

But that visibility gap erodes hope and trust. It is up to political leadership to fill it in with an alternative narrative enabling a vision of recovery at European level.

This could include much larger budgets for investment, structural funding and a euro bond system of mutualised risk that could simultaneously write down debt and fund sustainable economic expansion and employment.

Such European-level projects need to be argued for politically throughout the EU by stronger political parties offering alternatives to voters. This can best begin at national level, since it is plausibly argued that making the EU more democratic means primarily to politicise its affairs at home and integrate them into domestic politics. At European level that will need a more federal politics too, as Declan Ganley argued – by writing off bank debt as part of such a political compact.

Ireland could use its referendum experience to begin this debate, but existing political representation and parliamentary institutions – including the Oireachtas committee – are exceptionally weak and the executive exceptionally strong here compared to Germany or Denmark.

The row over the leak of the troika’s economic report to the German Bundestag overlooks precisely this fact, since its parliamentary committee was strongly empowered by a recent decision of the German constitutional court. A Supreme Court ruling on the treaty here would at least have given it a chance to review the juridical status of relevant EU law, which it has not done since 1987.

Linking debt relief to a Yes vote is one thing, political context and argument quite another. Even though a No vote would not derail this treaty – and would position Ireland outside the developing euro zone alongside an even more outside UK – political leaders elsewhere should pay close heed to the Irish public debate.

If they want to encourage Irish voters to accept it, they should be willing to bargain on debt and clarify their political and economic objectives in the coming months. That is how choice can be restored to democracy.