Referendum straitjacket on State over EU treaty changes

Fri, Sep 14, 2012, 01:00

OPINION:THE EUROPEAN Central Bank and German constitutional court have calmed the waters in relation to the euro crisis for now. Such calm though will not persist for long unless very significant action is taken at a political level to deal with the longer-term issues that the crisis has thrown up.

In particular many EU treaty changes are very likely in the coming years.

It is opportune, therefore, to ask is Ireland ready to cope with such an eventuality. The answer in my opinion is in the negative. At the core of my concerns are the so-called Crotty (1987), McKenna (1995) and Coughlan (2000) Supreme Court judgments.

These judgments relate to when, if at all, a referendum on an EU treaty change should be held (Crotty) and then, once called, how it should be conducted (McKenna and Coughlan). It is the collective impact of these judgments that is so worrying if Ireland wants to remain part of the evolving project that is the euro zone.

The first part of Crotty takes outside the control of the democratically elected government of the day whether to call a referendum on an EU treaty change.

More seriously, the concept of economic “sovereignty” adopted in the second part of the Crotty judgment is so restrictive it could be argued that an Irish government would need to hold a referendum say to remain a member of the United Nations.

Almost every transaction with an external body in fact means some loss of freedom of action which, it could be argued, then would require a referendum to proceed.

The concept of economic sovereignty, though, is extraordinarily difficult to define, in a world of such economic integration, where every nation is subject to the pressures of financial markets, migration of people, and free trade and investment flows.

There is an increasing number of areas in economics where only collective action, not self-government, is appropriate in achieving again some level of control.

And there is a growing body of legal literature arguing this very case, namely that state sovereignty is in many cases not ceded, but rather strengthened or instantiated, through collective action via international organisations such as the EU.

The McKenna judgment related to severe restrictions being placed on expenditure by the State on referendums but had nothing to say on private funding. As such, it could be that a private individual or organisation, not necessarily representing anyone, can through large financial outlays impact hugely the outcome of an EU referendum, while the elected government of the day is prevented from so doing.

The possibility of this has been already clearly evident, on both sides of the debate, in relation to the Lisbon referendums.

This undesirable outcome is compounded further by aspects of the Coughlan judgment. The judgment seems in effect to have required that the broadcast media give exactly the same broadcast time to each side of the debate, regardless of the level of electoral support of the parties on either side.

It is hard to decipher on what measure of “fairness” or social justice this is might be based.

Is it fair that a private wealthy individual can spend large sums of private money on a referendum campaign and, at the same time, if he/she belongs to a side representing say the views of just 10 per cent of the population, get up to 50 per cent of broadcast media coverage?

This outcome, perhaps not possible to foresee at the time of the ruling, for many people is an affront to the concepts both of democracy and fair play.

Besides, the judgment did not apply to the print and electronic media, which means for example that British-based tabloids, often with a very strong stance on EU issues, face no such restrictions.

There have been repeated criticisms of the EU in the international media for not responding quickly enough to the banking and debt crises in the euro zone.

But how can such a response be effected when you have so many political blockages, the most serious of all being perhaps in Ireland?

Here a treaty change supported by the vast majority of the democratically elected representatives can be rejected via the vagaries of a referendum.

This is particularly worrying when many may have voted in the referendum on some aspect of Irish government policy totally unrelated to the EU issue on the ballot paper.

Given the extreme seriousness of the present euro zone banking and sovereign debt crisis, it seems extraordinary that the democratically elected government of the day is so constrained in responding to the crisis in a timely and effective way.

The case for parliamentary democracy, as opposed to that of direct democracy via plebiscite, needs to be reasserted, especially in relation to the complex and urgent financial issues associated with the current euro zone crisis.

It is possible that the forthcoming Supreme Court judgment on the Pringle case will revisit the very restrictive interpretation of sovereignty in the Crotty case.

If so, it could take account of the much more nuanced concept of economic sovereignty emerging in recent years in the international economic law literature, in response to the surge in economic globalisation.

This though would not address the concerns with regard to McKenna and Couglan, especially as they apply to non-EU issues. Besides, what if the Pringle judgment does not revisit the concept of economic sovereignty but sticks with that articulated in the Crotty case?

If the latter were to happen then an insertion to the Constitution would have to be seriously and urgently considered.

The purpose of this insertion would be to allow the democratically elected Irish parliament decide in a timely way whether or not to participate in any new urgent euro zone measures required to prevent the return of financial turmoil.

John O’Hagan is professor of economics at Trinity College Dublin

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