Where now for the evolving EU system?

WORLD VIEW:VISIONS OF Europe were in short supply during the referendum campaign, which is a pity given that the pace of European events is now so fast.

Strategic thinking about the direction of change and its desired destination is therefore all the more necessary. Ireland’s decision to accept the fiscal treaty means this State remains fully within the EU decision-making process as choices are made about deeper fiscal and political union. That will require paying much more attention to discussion on where the system should end up.

Minister for Transport Leo Varadkar denied on RTÉ that the EU does grand bargains, but rather that it proceeds incrementally and reactively. This may be true of routine politics but not of critical junctures, which demand a more coherent and holistic response. Those who frame and communicate alternative visions are better placed to benefit from events.

If the euro is to survive, radical steps to federalise banking practices, budgetary policies and state indebtedness will be needed within the euro zone. So will more determined and resourced means to stimulate economic growth, employment and social protection if it is to have political legitimacy.

Ireland can benefit more from these multilateral moves within the euro zone than from unilateral ones outside it – but only if we bargain smart and hard. Debt relief will come more from following up on what has to be done to rescue Spanish banks or mutualise government bonds than from opting out of the euro.

Writing this column on Buyukada, one of the Princes’ Islands in the Sea of Marmara off the vast Asian side of Istanbul, gives a distinctive perspective on the wider European consequences of such decisions.

Turkey trades extensively with the EU and has revived its accession negotiations since former French president Nicolas Sarkozy’s departure. Its astonishing economic and regional vitality is immediately apparent.

Leon Trotsky spent four years from 1929 to 1933 on this island in exile from the Soviet Union, before moving to Mexico. Here he observed the 1929 crash, the efforts of European governments to respond by budgetary retrenchment, and the dramatic political fallout in the radicalisation and polarisation of European politics.

The eruption of Nazism in Germany and the disastrous Stalinist policy of refusing co-operation with the Social Democrats in opposing it opened up the way to the Nazis’ victory in 1933. Looking out on the sea from a lovely airy villa, which is now sadly decayed and overgrown, Trotsky wrote his autobiography and his masterly History of the Russian Revolution.

Parallels between that period and this are plain to see. Generalised retrenchment can turn recession into depression and transform political forces and events. Trotsky’s vision of a socialist united states of Europe survived that catastrophic defeat until his assassination ordered by Stalin six years later. He always took seriously the Austro-Marxist slogan from the early 1900s: “federalism is democracy’s answer to empire”.

That remains true in the current setting, even though it is far less intense than the early 1930s. It might be amended for the EU to read: “federalisation is democracy’s answer to intergovernmentalism”.

Federalisation does not mean creating a federal superstate but using such methods to ensure a fairer balance between different states and interests.

Intergovernmentalism as practised by German chancellor Angela Merkel and Sarkozy involved a raw exercise of power that is unsustainable in the longer term, however understandable it is in a crisis. An increasingly common perception of the EU as an unaccountable empire flows from that.

Such distinctions help us to interpret Irish party and voter attitudes towards the EU. In the campaigning on the fiscal treaty, the Europeanisation of the political frames and contexts of events elsewhere occurred by incorporating them into the Irish arguments and colouring them with left/right differences or more and less favourable approaches to integration.

Fine Gael supports federalisation and argues that Ireland will benefit from it, but it has been reluctant to spell this out fully. The party’s literature revealed a marked dependency on foreign investment as the primary driver of Ireland’s economy and a fear of alienating it by voting No.

Labour was less forthcoming about its preferences but strongly associated with François Hollande’s victory in France as a new force in European politics.

Fianna Fáil was characteristically pragmatic.

Sinn Féin displays a tension between its older sovereigntism and its newer desire to see the euro survive with different priorities. The radical left finds renewed inspiration for an alternative Europe in protest movements elsewhere, but has offered little substance on how it should be organised.

The right-wing No was mostly silent in this campaign. Declan Ganley’s new-found federalism failed to convince why voting No would better achieve that objective than pushing for further change within the developing system.

These arguments will not go away and nor will voters’ anxiety to see better outcomes at European level. That could make the campaign both a learning exercise for Ireland’s democratic participation in the EU and a stepping stone towards the next referendum on the larger questions thrown up in this one.