Referendum would be our chance to express our outrage

A referendum this year on either the intergovernmental agreement on fiscal union or on amendments to existing EU treaties would offer the Irish people a welcome chance to express their outrage. By Vincent Browne.

There is the prospect for the Irish people of a welcome opportunity this year to express their rage at the EU, which has inflicted €100 billion of debt on this country to safeguard financial institutions in Germany, France, Belgium and elsewhere.

And to rage against this Government which has conspired with this iniquity and, in the process, dishonoured the promises it made to the electorate last February. The opportunity will come about in a referendum likely to take place in the first half of this year.

The referendum will happen either because of the intergovernmental agreement, which requires the disciplines of the proposed fiscal union to be incorporated into member state constitutions, or by way of an amendment to the existing EU treaties which would achieve the same outcome. The reason for the latter arrangement – ie a treaty change rather than this new intergovernmental agreement – is because the proposed agreement is suspect legally.

Whichever it is will afford the Irish people a chance to put a spoke in the wheels of a rampant faction of the EU led by Angela Merkel and Nicolas Sarkozy, and also a spoke in the wheels of the Fine Gael-Labour Government that has offered almost precisely the same austerity and socially regressive prescriptions of its predecessor, which was ignominiously defeated in the election last February.

The thrust of the European project since the outset in 1957 was to create a single market. This, inexorably, was going to favour those most able to compete in markets, primarily because of their financial clout, over those whose aptitudes and resources were not market-oriented.

Along the way it absorbed the neoliberal agenda of privatisation, deregulation, “reforms” of labour markets (wage-cutting), tax “reforms” (broadening of the tax base to capture revenue from those previously deemed too poor to pay more tax) and “reforms” of social protections (the prioritising of agendas, ahead of the promotion of equality).

And now this neoliberal agenda is to be institutionalised either by way of this cumbersome and questionable intergovernmental agreement or by way of EU treaty changes.

It was precisely this neoliberal mindset that insisted that the welfare of bankers, financiers and bondholders be prioritised over the welfare of ordinary Irish people which led to the catastrophic bank guarantee of September 2008. This guarantee was influenced in the first instance (in September 2008) by the ECB’s insistence that no bank be allowed to fail in the EU – the scale of the guarantee was Ireland’s own doing, an act of special deference to the financial powers.

The continued support for the banks, including two institutions that are now effectively defunct (the former Anglo Irish Bank and Irish Nationwide Building Society), plus the payment of unguaranteed bondholders, is being done at the insistence of the ECB again. The weight of this debt burden forced Ireland into the humiliating EU-IMF “rescue” deal and that, in turn, has forced the austerity programme we are now enduring.

What is now planned is that we sign up, indefinitely, to what will amount to an austerity programme for a great many people here, way beyond the time when Ireland will emerge from its present travails. This will be enforced through fiscal parameters that will always prioritise fiscal rectitude over social need. But, more than that, there will be a requirement to comply with economic and budgetary policy guidelines that will prioritise markets, especially labour markets, which means wage and job “flexibility” (wage and job insecurity).

This fiscal union, however contrived, will include penal sanctions for member states that fail to meet its strictures and will come into effect (via the intergovernmental agreement) once nine states sign up to it. I assume there will be a rethinking on this one, for why would any state sign up to a penal arrangement, when not doing so makes no difference. There is no question of any state being removed, against its will, either from the euro zone or from the EU itself.

Voting against this intergovernmental agreement would make no difference to anyone, although we will be told and retold the lie that doing so would mean we leave the euro. It won’t and can’t.

But it would annoy the Government, and especially those who have been most deferential and subservient to our euro masters, which is something to be welcomed in itself. More than that it would represent a defeat of considerable significance to the Government, it would destabilise a few more Labour backbenchers, although not enough, and would be a signal to Europe that we, the Irish people, have had enough.

If, however, this comes to us as an amendment to the EU treaties, Ireland voting against it would stop it in its tracks completely, which would be a service to all the people of Europe. There would be the usual threats and maybe even a few carrots, but surely we have been through that before not to be deflected.

This is predicated on Europe getting to June without meltdown.


Image top: alphalim.