Labour was usually in Government in coalition with Fine The Future of EuropeEurope:: Perspectives Gael. from Ireland has been independent from the United Kingdom since 1922 and a Republic since 1949. Ireland was in a currency union with the UK until 1979. For a period of 30 years from 1969 until 1998 there was instability in Is there room for a European Northern Ireland which successive Irish Governments dream in a country captivated in worked to resolve and contain. EU entry in 1972 was the structures of IMF -EU backed by both centre right parties and opposed by adjustment programmes? Is more Labour, which however soon became converted to the European integration desired and European project. Sinn Fein and the small socialist feasible at all? parties are anti - Globalisation and anti EU. The Irish Greens formerly had an influential Eurosceptic wing

which is decreasing and many young greens are pro EU. These were among the key questions addressed Most Unions and business organisations are Pro EU. during a seminar on the future of Europe, organised by Green European Foundation with the support of Impact of the financial and economic crisis on the Heinrich Boll Foundation and Green Foundation Ireland Ireland on November 17th in Dublin. This article is a synopsis of the seminar, written by Nuala Ahern, Ireland had a booming economy and massive growth in Chair of the Green Foundation Ireland and former the 1990’s.This turned into a housing bubble, fuelled by Green MEP. low Eurozone interest rates and a global market saturated with liquidity. A comprehensive analysis of how

the Irish economy collapsed is contained in the Nyberg Report , an independent report by a Norwegian The seminar took place in Tailors’ Hall, the headquarters economist. of An Taisce, the Irish National Trust. It was attended by 74 participants. Many were Greens, some were NGO’s Nyberg states that the Irish economy collapsed because and others individual citizens. of the reckless speculation in property (housing inflated by approx. 500% in the Greater Dublin region between Speakers were from Ireland, Nuala Ahern, Eamonn Ryan, 1996 and 2006. It has fallen back by 50% since the peak). Dan O’Brien and Paul Sweeney; the UK, Jill Evans MEP, Vinay Gupta and Elizabeth Meehan; Belgium, Benoit The crisis unfolded in the week following the collapse of Lechat; and Germany, Ambassador to Ireland Eckhard Lehman Brothers in the United States in September 2008 Lubkemeier and Financial Journalist Nicola Liebert. when the Irish Government was informed of a severe

liquidity problem with Anglo Irish Bank. It was made The seminar addressed the Future of Europe not only clear by the ECB and EU Finance Ministers that no bank from the point of view of Ireland but also from that of should be allowed to fail because of the risk of Great Britain, her closest EU neighbour. contamination in the Eurozone. The Fianna Fail/ Green

Coalition Government therefore introduced a Bank Ireland: General Political Background Guarantee by way of emergency legislation. The majority of the parties supported the state guarantee in a parliamentary vote which effectively socialised private Irish Political Parties: Fianna Fail (ALDE); sector bank debt. (Christian Democrats); (Socialist Group); some small left parties - Sinn Fein (GUE); and the Subsequent refusal by the ECB to allow private Greens. Currently in government: Fine Gael and Labour. bondholders to take the hit for their investments in Irish banks has led to the belief that the ECB has pandered to Irish Governments have been dominated by two centre vested interests while forcing the common people to pay right parties, Fine Gael and Fianna Fail. Historically for debts which they did not incur. As a result there was a Fianna Fail is to the left of Fine Gael and to the right of sharp rise in anti EU sentiment. the Labour party, though this is fairly meaningless as

The Future of Europe: Perspectives from Ireland 2

A low public debt in the 1990’s turned into a massive public space. The Green European Journal and GEF exist deficit after the crash as during the boom the inflow of to create a Green public space for progressive ideas. funds was used to expand the public service, and award large pay increases at its higher levels. State spending, We need also to meet face to face to create real debate. 44 billion in 2002, rose to about 64 billion in 2006. At We need an answer to the rising sense of injustice more than 8% in 2012 Ireland continues to run the between the generations. We need to rebuild a social largest budget deficit among the 27 member states. Europe with a concrete content. We need interpersonal solidarity for example a European Citizens basic income, The economy rapidly contracted after 2008 and the so that we know we belong to the same society. private sector cut jobs and salaries acutely. In the public sector, agreements maintained wages on the promise of Dr. Elizabeth Meehan (Queen’s University Belfast) efficiencies. The social fabric held as the public sector argued that the public space in Europe is fractured and was sheltered from the worst of the recession, but divisive as a result of the crisis. Europeans need to unemployment rose to 15%. The traditional safety valve properly comprehend how they are interlinked and of large emigration of the educated young was added to interdependent. But the crisis has brought an by emigration of the older workforce in collapsed sectors overwhelming’ reversal back to the national interest as such as construction. our reference for understanding the crises. Moreover we seem to link economic performance to the general moral In late 2010 a bailout deal was agreed with the Troika, to character of entire political communities’ – the stuff of reduce the deficit, which was running at 20 billion per the North -South fracture. year. Since August 2008 Irish citizens have had a bigger austerity than any developed economy (even more than We use the language of divisiveness; member states Greece) according to the OECD. 24 billion euro in cuts build ‘firewalls’ to prevent ‘contagion’ and suggest that and new taxes have been introduced since the crisis dysfunctional economies are ‘riddled with disease’ and began, and more than 8 billion of cuts are scheduled in ‘ready to poison the lifeblood of healthy economies. The 2013-15 - a total of more than 32 billion. Irish taxpayers caricaturing of European leaders is an attempt at a deeply resent repaying the creditors of the banks which populist understanding of how Europe is governed, but were socialised, an impossible task for just fewer than we need to go beyond caricature and create an intelligent two million working population. public space in Europe.

Key issues discussediscussedddd Ireland, the UK and the EU; the English European democracy and the European public speaking European world sphere According to Jill Evans MEP the most severe calling into question of the legitimacy of the EU is within the UK, The Future of Europe seminar opened with a call from where for the first time the possibility of an exit from the GFI Chair Nuala Ahern to address the crisis urgently and EU is seriously considered possibility. A UK exit from the comprehensively; if the crisis is not resolved the EU would impact negatively on the UK, particularly in legitimacy of the EU, already being called into question, Scotland and Wales, which are much more pro EU than is may suffer a dangerous collapse in public support. England. EU budget cuts, which the UK Government is Legitimate governance in Europe must be intelligible to currently pushing in the EU budgetary framework 2014- its citizens and have clearly defined structures that 2020, would also disproportionately affect Wales and people can understand, consent to and interact with. Scotland. However, in spite of a worse banking collapse Such is scarcely the case at present. than other EU states, the fact that their own currency and the Bank of England have contained the crisis has According to Benoit Lechat, editor in chief of the Green convinced many in the UK of the benefits of remaining European Journal , the lack of a really legitimising outside the Eurozone. European democracy is also an economic problem. Where for example organise debate on the causes of the Vinay Gupta (UCL Institute for Security and Resilience crisis? A new convention to promote reform and Studies) said that the young people of the UK would not democratisation in the EU was his suggestion. No give up the freedoms that European citizenship had progress on the democratic level can happen without a brought them and which would be threatened by a UK

The Future of Europe: Perspectives from Ireland 3

exit. The elite vision of European integration had been However people are against debt relief as they see that replaced with the actual experience of the young that as spending their hard earned money on profligate Europe is their country. The European generation is at southern Europeans and their public debt. It is not home all over Europe for working and living and they will understood that hardly any German money has actually react savagely if national elites now try to take this from been paid out: 7.5 billion euro in direct loans and 10 them. billion EFSF guarantees. Nor is it realised that if any country drops out of the Eurozone that this would mean The financial crisis is also a crisis of authority and can higher losses due to non-payment of debt. become an intergenerational rift. Generation Europe is not content to allow the EU make decisions without being An alternative solution would mean: accountable for them. It is vital to prevent a catastrophic collapse in our systems of government in a greater EU. • Debt relief is necessary as the Latin American We should not allow a federal state to develop without crisis of the 1980’s shows. The solution to that real oversight, representation and accountability. Don’t crisis only came with large scale debt relief take the USA as a model; many young people perceive it as a corrupt super state where the arms industry and • Raise more Revenue - We need not only to look corporate power have a stranglehold on the political at cutting spending, but at raising revenue system. through a proper and progressive tax structure, including property taxes, in all EU member The Financial Crisis - Potential Solutions? state. Tax evasion must be fought and policy changes away from a competitive tax cutting Dr. Eckhard Lubkemeier German Ambassador to race to the bottom are needed. The EU needs a Ireland emphasised that the crisis did not arise in the fiscal union not only in the sense of Budget Eurozone but exposed colossal failures in the setting up Control, but of a common taxation policy of the euro. Resolving the crisis is an opportunity to put • the Euro on a sound basis. Germany will provide the More solidarity - we need a coherent social and needed support because Germany needs Europe. (60 % of ecological policy in the EU therefore we must German exports are to the EU and 40% to the Eurozone). seek to implement the Green New Deal; we Europe needs Germany which is the anchor of the need to prioritise an employment creating policy Eurozone and the major creditor. and we must not forget to attack inequality which has grown as a result of neoliberal Short term relief is required, but long term stability is policies. We need a basic social safety net also required: sound public finances have to be restored across the whole of the EU and banking systems rebuilt. The European Social model • is under severe strain but while globalisation causes More democracy is key - a real political and problems it also provides great opportunities. We cannot fiscal union. The EU structures must become retreat from Globalisation. EU is the way of sharing the more democratic so that we move beyond a risks and benefits. As individual countries we don’t have common on market to a true political and weight. economic union.

Nicola Liebert, German journalist and tax expert , said Dan O’Brien, economics editor at the Irish Times argued that Europe cannot be just a common market and that Europe needs Fiscal Union, Banking Union and common currency but must have a coherent social and Political Union; a degree of federalism is required ecological policy with publicly funded social security. because of the need for a monetary union to have a clear Young people do identify with Europe; Germans want enunciation of rules and allocation of competences, not their own government controlled as well as others. There just on the monetary policy side but also on the fiscal is bail -out fatigue but Germans are pro Europe and pro policy, or ‘spending’ side. Fiscal federalism’ – is required euro and there is a growing awareness that to save the for resolving the crisis, which also needs banking union. euro you need more money in the pot, and that German The EU introduced the single currency without the prosperity depends on prosperous European neighbours. necessary architecture of a fiscal union. However, Mitterrand and Kohl, the main advocates, believed that the single currency would lead to political union. This

The Future of Europe: Perspectives from Ireland 4

was a reckless strategy and it has proved its weakness in systems. Greens need to explain how ecology will light of the current crisis. become an increasing economic and political force.

The Eurozone is not an optimal currency area and has The Green New Deal requires major capital investment to fundamental weaknesses which must be addressed by a for example turn reduction of waste into economic fiscal and banking union. A banking union is essentially opportunities. The EU must turn the industrial economy regulatory; more financial regulation is needed in a badly into a resource limit economy and use resources more under regulated system. A currency union needs fiscal efficiently. Politics will need to take some power back union to deal with asymmetric shock. Greater political from the markets which are not best placed to design the union is required because fiscal union is at the core of energy, transport, food, water and waste systems we will politics in that who you pay your taxes to and how they need in a resource efficient future. Markets will still are spent impacts directly on our democracy. Therefore a build and operate those systems and the internet can fiscal and banking union means that more democracy in provide open and transparent data sets so that it is done the EU is required. It will be dangerous to have a fiscal in a new collaborative but competitive way. union without addressing the democratic deficit. Nuala Ahern concluded that all need to accept fiscal A European Social Pact is needed oversight including France, but this is problematic because of comments by prominent French public Paul Sweeney, representative of the Irish Congress of figures such as Valery Giscard d’Estaing and Jacques Trade Unions stressed that living standards in Europe Delors, that EU fiscal oversight should only be applied to have increased immeasurably under the EU but there is a the bailout states, and not to France. breakdown of the European social pact. Europe still under the influence of neoliberal philosophy which has Sustainability is important as we are also already facing destroyed financial security. Ireland’s economic collapse the effects of climate change. We need a coherent social in 2008 was precipitated by the gross irresponsibility of and ecological solution and a Green new deal. New small elite in the private sector in an ultra-liberal studies of growth show persistent low growth in spite of economic system. new technologies although others think that green technologies will drive growth. Better analysis is There is schizophrenia in The EU Council of Ministers required of what kind of growth is needed to exit the about the fact that more austerity will deaden growth crisis, particularly as economists think that without real leading to a higher debt ratio and an even deeper crisis, growth the European debt becomes alarming. therefore austerity alone cannot be the answer. We need an EU wide stimulus. The European project is still in Conclusions danger. The ECB is unpopular and its head Mario Draghi has said that Europe’s’ social model is already gone. If so Throughout the event, audience participation was lively it must be rebuilt. Globalisation is a problem for workers and tended to focus on the economic crisis and the and the middle classes and therefore for domestic socialised debt. Economics we were told is just a fancy demand. Fiscal policy is a key to reversing inequality and name for politics, therefore we need to ensure a fiscal low corporation tax in Ireland needs to be addressed. compact does not take away political choice. We cannot have a fiscal union without proper representation that Leader Eamonn Ryan said that no country in people consent to and understand. As we cannot have an Europe is big enough to influence the new economic effective democracy in Europe without a proper public order on its own. Europe needs ecological thinking in a space we need to continue and enlarge the debate. technological world. This means we need both a collaborative and competitive approach in political In order to solve the crisis Europe needs Fiscal Union, systems. Globalisation will not be reversed; the internet Banking Union and Political Union; The Eurozone is not is a fundamental shift. Global investment and global an optimal currency area and has fundamental opportunity needs global governance, rules on climate, weaknesses which must be addressed by a fiscal and migration and proper labour and environmental banking union. Greater political union is required standards. A coherent social and ecological policy is because fiscal union is at the core of politics in that who required which would create jobs and safe social security you pay your taxes to and how they are spent impacts

The Future of Europe: Perspectives from Ireland 5

directly on our democracy. Therefore we need a really legitimising EU democracy. The young European generation will not allow a federal state to develop without real oversight, representation and accountability and they do not look to the USA for a model. The EU structures must become more democratic so that we move beyond a common on market to a political and economic union that has a coherent social and ecological policy at its core.

The article was written by Nuala Ahern, the Chair of the Green Foundation Ireland.

© Green European Foundation

The views expressed in this article are those of the authors’ alone. They do not necessarily reflect the views of the Green European Foundation. With support of the .

Green European Foundation asbl 1, rue du Fort Elisabeth 1463 Luxembourg

Brussels Office: 15 rue d’Arlon, 1050 Brussels, Belgium Phone: +32 2 234 65 70 - Fax: +32 2 234 65 79 E - mail: [email protected] - Web: www.gef.eu