Ireland off EU radar screen as Spanish bailout looms
ON THE evening of October 19th, 2002, RTÉ broke into the Saturday night movie to broadcast the result from six constituencies in the second Nice referendum.
It was the first and only referendum in which votes, or at least some votes, were cast electronically. A decision to pilot electronic voting machines in six constituencies meant that their returning officers were able to upload the cartridges and announce the results within an hour of the polls closing.
By comparing the results in those constituencies with how they voted in the first Nice referendum, it was possible to assess quickly what it meant for the overall national outcome. In studio, I told Brian Dobson that there was no need to wait for the manual vote count in the other constituencies the next day.
“It’s all over,” I said. “They can open the champagne in Government Buildings. They can uncork it also in Brussels and in the capitals of the aspirant new entrants in eastern Europe. It’s yes and a big yes.”
It was a spontaneous soundbite and, as it happened, was picked up by some international news agencies and carried in newspapers across Europe and further afield where the referendum outcome was being closely followed because of its implications for European integration and enlargement.
On that particular weekend in 2002, Europe held its breath waiting for news of the Irish referendum results.
Last Friday morning, it was again clear within an hour of the ballot boxes being opened that the outcome on the fiscal treaty referendum was going to be a decisive yes. However, there was no Europe-wide celebration at the news and certainly no champagne.
The result was noted in Europe with mild relief that the Irish were not going to further complicate a bad situation. Europe’s interest in our outcome was muted in part because the fiscal compact is not contingent on Irish participation and Europe’s politicians and policymakers are absorbed in more important issues than Ireland’s ratification.
With enough on their minds worrying about Spanish banks and Greek elections, expecting them to apply themselves to a restructuring of Irish bank debt is naive. Ireland is not now high on Europe’s agenda.
The economist John FitzGerald put it best on Newstalk on Monday when he summed up the German government response to Irish demands for attention as one of “not now, we’re busy”. Well-behaved Ireland is being ignored and some may feel neglected by Angela Merkel and other European leaders who are focused instead on our more troublesome siblings in Greece and Spain.
The Spanish crisis has suddenly intensified the euro crisis. The hole in the Spanish banks could be as large as €80 billion. Spain is one of Europe’s largest economies, making a Spanish bailout and its potential for contagion a threat to the very survival of the euro. That threat is on an entirely difficult scale from even the risks associated with a Greek exit.
Addressing the Spanish component of this crisis is giving rise to shifts in approach even from the Germans, the extent of which may be seen at the summit of European leaders scheduled for the end of June.
Many fallacies were uttered in Ireland before and during the referendum campaign about what Ireland could get from Europe by voting No or should get from Europe for voting Yes.
The notion touted by some left-wing parties and independents, and even Eamon Ó Cuív, that Ireland could hold a gun to Europe’s head by threatening a No vote in the absence of concessions on the banking debt was irrational. Europe was never going to be troubled by such a threat and worry about Spain has rendered it almost indifferent on the issue. However, the implicit suggestion from Government speakers and others that Ireland would get some special reward for voting Yes was equally disingenuous.
Much of Irish political discourse over the last two years has involved politicians overstating our capacity to shape our own situation or leverage concessions or policy shifts from Europe.
Our lowly situation and dependence on European Union and European Central Bank money mean that it will be Frankfurt or Berlin’s way rather than our way. We are not in a position to blackmail or insist on debt restructuring because we have no leverage in Europe. This crisis was always bigger than us and now that it is mushrooming into an ever-bigger crisis lowly Ireland has even less control over its destiny. We are a buoy loose on Europe’s troubled waters.
We can as a member state contribute to policymaking at the euro, European Union and European Central Bank levels but, in reality, we are only one small voice. That voice can play some role with more powerful players like the new government in France in seeking to persuade Germany to accept the need for more dramatic Europe-wide interventions to tackle the banking and fiscal problems in both Spain and Greece.
We can add our voice to demands for an emphasis on stimulus and growth. If, as seems likely, the solution designed for Spain involves tackling the Spanish bank debt in a manner other than lobbing it onto the sovereign debt, that will create a political argument for Ireland’s bank debt to be treated differently.
All Ireland can do is strive to meet its obligations under the bailout, aligning ourselves with the constraints of the fiscal compact, add our voice to those seeking a more interventionist policy, and hope to collaterally benefit from the new solutions adopted for Spain. It not a pleasant position to be in.
It’s frustrating to have to just watch and wait, but it is more honest than suggesting that some dramatic concessions from Europe will come any time soon.