The crisis that has dominated the EU has polarised opinion among the citizens of it’s member states and the latest drama is set to continue the debates. Britain’s decision to abstain from the recently proposed treaty change is another example of the rock or hard place decisions that must be made by member states.
From the information that has been made available, it appears that this treaty is a fiscal union deal which will apply strict budget and debt rules on members and penalties on those in breach of these rules.
British Prime Minister David Cameron decided that Britain could not agree to the proposal in it’s agreed form as certain exemptions he was seeking for the UK were not granted. He believed that in it’s current state the new treaty may be harmful to Britain, it’s independence and it’s financial sector; London being one of the World’s major financial centres.
On one hand, Mr. Cameron should be applauded for not being afraid to back his own beliefs, stand up to the powers-that-be and show that his country can make their own decisions without being bullied into agreeing with other EU powers.
On the other hand, the precarious situation the EU and euro zone countries find themselves in now is one that cannot be allowed to happen again. reckless management of finances by member states has lead to not only their own near collapse (such as with Greece) but each individual collapse would have the knock on effect of bringing down most around it. A Greek collapse would have greatly damaged the EU and other member states, especially France whose banks had invested the most in Greek national bonds.
A Greek collapse would also have exacerbated the fear in financial markets that many other EU countries were on the precipice, staring into the abyss (such as Italy). With all the states linked and invested in each other and with other countries and world financial markets also naturally invested in Europe this was a fear on a global scale, as witnessed by Americas constant public statements urging EU leaders to solve the issue.
It seems logical to place restrictions on member countries and monitor them more tightly to ensure countries are not over-spending and leading us again into the disaster in which we have found ourselves.
Although the UK is not a euro zone country it is in the EU, and granted it’s economy has not put the EU under any strain but should it get into difficulty the EU will still have to assist it financially. Therefore should it too, not have to abide by these latest rules. It would appear that in not agreeing to them, Britain is running the risk of isolating itself should it need future assistance.
Furthermore, earlier in the week Britain refused to contribute €30 bn to the IMF as was requested of them by their European counterparts. The British chancellor reiterated the Government’s position that the IMF’s purpose is to protect “countries – not currencies” and said Britain believes eurozone members should take more decisive action to tackle the problems among themselves.
An issue for Ireland is the possibility of being asked to vote in another referendum on treaty change. There is some very real talk of this latest treaty change being attached to a reduction in the repayment terms of Ireland’s debt, which gives the country quite a difficult decision to make.
All are well aware that our national debt is crippling the country and any additional reduction offered on this debt would have to be seriously considered. However, sentiment in the country appears to indicate that another EU treaty amendment would not be welcome should it go to referendum. This feeling is given further weight by the statements coming from government a few weeks back that any resolution to the EU problem should be found without changes to the treaty thus requiring a referendum. Given the country’s record of rejecting treaties in the past the government clearly want to avoid this step, however the spin has already begun with sounds coming from the Dáil that any rejection of this EU treaty amendment would mean our having to exit the EU and certainly the Euro.
Whether a rejection would mean this is difficult to know yet. Certainly our relationship with Europe would be severely damaged. Furthermore, it would also leave Ireland in a dire position should our country veer towards bankruptcy again. Without signing up to the current changes and abiding by it’s financial regulations we would be like a vehicle on a long road journey without AA membership – it would be hard to see anyone coming to help us. The AA (EU) certainly would not have to help if we are not fully paid up members. Would a rejection of the treaty mean having to leave the Euro? Quite possibly. If we are not willing to be bound by the new rules of the Euro then we will hardly be allowed to be left in a position to possibly take down the Euro in the future.
No longer being in the Euro could be damaging to Ireland. As a tiny island nation Ireland marketed itself to foreign investors as having a lower corporate tax rate than other EU states, highly educated workforce and being in the Euro and EU thus providing access to the European market.
Yet being a part of the Euro has been a contributing factor of many of the problems we now have, cheap easy credit, tighter connection to other Euro banks. We gorged on the money, squandered and gambled it, bought into all the complex derivatives. Now we find ourselves paying back not only our gambles but the gambles of these other nations and banks because we are part of the reckless collective.
These are the big decisions to be made. Do we acquiesce to the bully tactics of Europe and accept whatever treaty is thrown our way under threat of expulsion? Or do we accept the carrot approach and agree to a treaty we are quite sceptical of in exchange for less crippling debt? Do we take the moral high ground, say no to further relinquishing national sovereignty to Europe and especially the powers of France and Germany, and then go our own way – even if our own way may be fatal.
Should the government leave these decisions to the people or simply use it’s mandate to govern, and with all the inside information made available to it make the best decision for the country on our behalf.
I have a great deal of sympathy for the current government. It has found itself in a truly unenviable position. A position not of it’s own making! It is stuck between a rock and a hard place where every possible turn and decision, with regard to Europe, has as many negatives as positives and is likely to rankle the population and leave some sort of lasting sour taste. It would appear that one way or another this country is going to become weaker and more subordinate to someone before it can become stronger.
King Solomon the wise would struggle with some of these decisions.