Small country can clarify direction of EU integration

ONCE upon a time it was customary to lament that Ireland was mainly a taker from the European Union, brazenly frolicking in subsidies which the feckless natives filched from the earnest Germans, too busy earning an honest living to realise the tricks their poor Hibernian cousins were playing on them. But Ireland's role in the Union is changing. It is not only that our economic growth rate has far surpassed the Union average. It is also that we have raised our game in the area in which small countries can make a contribution far beyond their size, in the market place for ideas.

We didn't lack people with ideas at the time of entry to the EC in 1973. What we lacked, as in so many other areas of Irish life, was the organisational structure to enable them mobilise and co ordinate their talents. We managed our intellectual resources so badly that many of our best thinkers could not reach their full potential within the existing intellectual infrastructure.

That it would take nearly 20 years after entry for an institution specifically devoted to European affairs to emerge offers an eloquent commentary on the way we used to do things. But the establishment of the Institute of European Affairs in 1991 dramatically changed that.

The latest publication under the auspices of the IEA, Constitution Building in the European Union, edited by Brigid Laffan, the Jean Monnet Professor of European Politics at UCD, provides a significant Irish contribution to thinking about European affairs. Instead of asking, in familiar fashion, what we can get out of Europe this week, it reflects the maturing perspective of a confident member of the Union, anxious and able to make its own contribution, increasingly aware that the main economic advantages of membership in the future will come less from short term coups than from the general development of the Union.

While the contributors are committed to some version of European integration, they do not fall into the trap of uncritical partisanship.

Rarely indeed can the inadequacies of models of integration have been so persuasively exposed as in Paul Gillespie's superb critique.

So much writing on the European Union is dominated by economic values that it is a relief to find authors who are concerned mainly with issues of identity, of culture, of who Europeans are - indeed if there are Europeans. But it is impossible to get away from economics.

EMU hovers over constitutional no less than economic issues. As Laffan notes, "EMU goes to the heart of economic governance in the member states". This means that it goes to the heart of government in general, given the centrality of economics to all policy nowadays. The present IGC will miss a historic opportunity if it fails to grapple with the central long term issue facing the Union - whatever its size, whatever the voting procedures, whatever the composition of the Commission - the implications of economic unity for cultural diversity and political participation.

This is why the consequences of Maastricht are not simply technical matters to be decided by experts over the heads of citizens. Control of economic policy will exert a significant influence not only on the type of economy, but on the type of society, and of polity, that Europe becomes. Given the intensity of the immediate manoeuvring inevitably involved in the IGC, one can only hope that the question of what all the proposed institutional changes are for, will not be forgotten.

The central issue, for democrats, is not mainly one of national versus supranational control of policy. It is the more fundamental question of ensuring the reasonably effective functioning of democratic decision making at any level, local and national as much as supranational.

What the Maastricht process exposed was a democratic deficit not only at European level, but at national level. It was, after all, national governments which signed up for Maastricht. If citizens were conned about the true implications, they were conned by their own representatives in the first instance, not by the allegedly faceless bureaucrats of Brussels.

Governments took the decisions without, for the most part, any real public consultation. On what bases were the Maastricht guidelines determined? Who decided that the target national debt level ought to be 60 per cent, or that the budget deficit should not exceed 3 per cent of GDP?

Above all, what mandate had governments for deciding that unemployment was so irrelevant that it should not even count as a criterion of economic performance? These are essentially ideological issues, however much they may masquerade behind the facade of technocracy.

The most neglected Maastricht implications of all are those arising from the independent status of the proposed European Central Bank. How many citizens of Europe realise that their governments are handing over control of monetary policy, particularly the fixing of interest rates, to a committee of central bankers subject to no effective democratic control? What mandate did the men of Maastricht have for this decision?

This is the most serious "democratic deficit" of all. Supporters may invoke the American analogy, pointing to the independence of the Federal Reserve Board in the US. And has not the Bundesbank been independent of the German government since its foundation? Isn't that recommendation enough for the system? But the Federal Reserve and the Bundesbank operate in countries, with powerful political centres.

Europe has no President, no Chancellor, no Congress. What we are having imposed on us is a powerful, effectively unaccountable, central bank, for an entity with no corresponding political centre. This is not so much a division of powers, as a stark imbalance of powers.

Paul Gillespie rightly dismisses the US political analogy, showing just how false are the alleged American precedents for European integration. At the same time, much of the thrust behind Maastricht seems to be obsessed by the American economic analogy, without any adequate analysis of the issues involved.

It seems doubtful if the politicians have pondered the political implications of an unaccountable central bank. What happens if EMU is followed shortly by even higher unemployment due to an inappropriate policy pursued by the central bank? What will be the implications for political stability, or the opportunities for a right wing reaction, if there was a backlash from workers who would take their resentment out on immigrants?

The lack of linkage between economic and political thought bodes ill for the future of the European project. Gillespie rightly laments the baleful influence of academic specialisation on the way we think about the future of Europe. There is, ironically, little integrated thinking about European integration. At the very least, one needs to resurrect the old discipline of political economy, largely abandoned since economics chose to go in a mainly quantitative direction a generation ago.

The fundamental issue now concerns the way we think about the future of Europe. Shall we choose to think in mainly sectoral terms, or shall we try to develop integrated thought processes? This is a longterm challenge, and would require basic reconsideration of the role of education in fostering a capacity for integrated as distinct from fragmented thinking.

We rejoice in the celebrated brokerage skills of Irish politicians and diplomats in European affairs. But what are they brokering for? As Kieran Brady puts it in his incisive survey, The Union and its Institutions", in the Laffan volume: Some clear thinking about the raison d'etre of the European Union and of the future of European integration will be necessary for future institutional reforms to have a realistic chance of success." Wouldn't it be nice if the Irish presidency came to be seen as the one which sowed the seeds of such "clear thinking"? That would be a big idea from a small country!