New coalition to face shift in Europe's power balance


Move to bypass established process over euro zone reform is bad for small states

GROSS EXAGGERATIONS of our debt obligations by some observers and exaggerated campaign claims about post-electoral bailout renegotiation possibilities are creating considerable public confusion. As a result, the task that Opposition politicians will face in government in a month’s time is being unnecessarily complicated.

This is a unique election in which, given the massive electoral support for a Fine Gael/Labour coalition, it should have been clear to Opposition politicians that their best hope of success in government would lie in promising little, so as to be able to outperform damped-down expectations when in power.

Unhappily, such a scenario has been undermined by intense competition between the two main Opposition parties for their respective shares of the 100-plus seats they are jointly likely to secure. At the time of its earlier experience of briefly running ahead of Fine Gael in the polls, Labour seems to have become fixated on the theme of “Gilmore for taoiseach”, and it failed to adjust to a more realistic stance where it subsequently found itself running one-third behind Fine Gael in the polls

This seems to have tempted some in Fine Gael to respond by directing their campaign primarily against Labour. Within both parties wiser and more experienced heads such as Michael Noonan and Ruairí Quinn have been trying to rein in more extreme voices.

Arousing unrealistic expectations of European easement of our financial crisis also carries with it a danger of evoking further domestic hostility towards our EU partners, and towards the European Commission, which could become highly dangerous.

In this connection it is important that we become aware of an aspect of the German-French proposals for euro zone reform that has received almost no publicity here – namely their idea of employing for this purpose an intergovernmental reform process, outside the EU’s normal decision-making structure.

The decision-making system (known as the “community method”) is one that precludes member states, regardless of their size and importance, from pushing their own interests by proposing new EU laws. Only the independent commission may propose such laws, which, subject to agreed amendments, are then adopted by the Council of Ministers, nowadays jointly with the European Parliament.

The importance to us of this decision-making structure has never been well understood in Ireland outside of official circles, but its preservation has been Ireland’s most vital national interest within the EU.

For this unique decision-making system has most effectively protected the interests of Europe as a whole, and in particular smaller countries, including Ireland, from possible abuses of power by larger states.

France was never very happy with this arrangement, and after his election as French president in 1974, Valery Giscard d’Estaing invited his fellow heads of government to a dinner, where he proposed a radical change in this established community method of taking European-level decisions.

This change would have involved the heads of government regularly participating in decision-making meetings of the Council of Foreign Ministers – these joint meetings were to become known as European Council meetings, and to be prepared by a separate secretariat outside the community structure.

At these meetings the leaders of the three larger countries hoped to act as a European directory, dominating proceedings.

Ireland, (then in very good standing in the community), together with the Benelux countries, and backed by the president of the commission, successfully opposed this dangerous move. The big three eventually climbed down and, apparently feeling that their dignity as leaders of important states would be compromised by having to confine their involvement in decision-making to proposals made by the commission, decided to abandon actual decision-making at these European Council meetings. Instead, they would use these occasions to offer “orientations”.

The current ill-prepared German-French proposal for euro zone reform represents a new attempt to bypass the union’s tried and tested decision-making system. This is doubly dangerous, both because in preparing their euro zone reform proposals they have failed to draw on the commission’s technical skills, but also because their intergovernmental approach on such a key issue represents a fresh threat to the established principle of community decision-making.

A number of states oppose various aspects of this euro zone restructuring proposal, but thus far only two western European states – Luxembourg and Belgium (the latter of which has had no government for many months) – together with the eastern European states including Poland, seem to have opposed this proposed erosion of the union’s decision-making system.

The Netherlands, traditionally a strong supporter of the union’s constitution, seems at present to be too committed to the German economic proposals to take a stand on this key issue, and the Germans seem to have persuaded Spain not to challenge the bypassing of the European Union’s decision-making system. Greece and Portugal, as well as Ireland, have marginalised themselves by their economic incompetence – in our case also because our ministers appear for some years past to have effectively opted out of any active role in relation to the future evolution of the EU.

Finally, Sweden and Denmark are not in the euro zone and seem also to have opted out of this whole debate – mistakenly, I believe, in view of their long-term interest in the union’s decision-making system. And Britain has never been a friend of the commission or of the union’s unique decision-making system.

Thus for Europe two very different sets of problems lie immediately ahead.

First of all there is a danger that a euro zone reform cobbled together by the heads of government of Germany and France without the benefit of the technical skills of the commission may be a mess.

Second, there is a new danger that the decision-making system that for over half a century has sustained and kept in balance an inherently cumbersome union, incorporating some very large and also many small states may lose its hitherto carefully preserved cohesion, and for the first time become dominated by some larger states.