Wednesday 17 November 2010

Ireland the Symbol and Sovereignty the Ideal

For a small country, Ireland has been a very symbollic country in the world. As an oppressed nation under an empire, as a rebellious and feircely independent people, as an example of the terrible consequences of famine, as one of the "angelic states" (very supportive of the UN & UN missions), as what a small country could achieve in the EU, and as a model for how to deal with the economic crisis. It seems we've been good at promoting our own version of history, but Ireland the symbol has become internationalised, and - especially now - Ireland is an example to be held up in argument.

To the left in the UK, Ireland is an example of the dangers of austerity; to Eurosceptics the example of a loss of sovereignty.

I think both are crude uses of the Irish situation. Though I oppose severe austerity measures, and feel the UK government is going too far, the Irish case cannot be compared so easily with the British: in Ireland we've continued borrowing because of the banks, so the deficit is still growing. Similarly, I think any IMF-EU bail-out would be incredibly tough and would entail the loss of some decision-making powers. Ideally it will never happen, but it appears more and more certain with each passing day. However, Ireland is in this mess because of the choices Ireland made.

Sovereignty is...

Increasingly it appears to me that sovereignty is touted as a panacea that ignores the globalised world, as if countries can act like the characters in spagetti Westerns. Van Rompuy's attack on Eurosceptism and nationalism (which I felt was directed more at the increasing popularity of Geert Wilders-like figures and parties when I read it), may have struck people as an out-of-touch thing to say about nationalism, and some have described it as defeatist, but we do live in a globalised world. Sovereignty cannot mean freedom from responsibility. Whether you've signed treaties, joined the EU or just have a bad banking system with international links, you have taken on duties and your room for manuever is limited. In a global villiage with a global market place, we can't all be cowboys.

Countries have to deal with the circumstances they find themselves in, and, particularly for small countries, pooling sovereignty can mean gaining the ability to really influence outcomes, rather than merely being the subject of them. As was said of the Dutch central bank before the Euro: the job's easy; just do what the Bundesbank does.

Now, most people do not have the narrow, populist view of sovereignty, but it is important to note how arguments are being made on the basis of what are essentially buzzwords. Sovereignty, democracy, etc. These words are invoked in political debate increasingly to tar actions and events as illegitimate. But legitimacy, like justice, is a complex concept that depends on several factors. The buzzword arguments are not really how most people see the world, but as simplistic arguments they seem to spread very easily and quickly.

And Ireland? Irish traditions and threads of identity are not a simple as the stories that we tell ourselves, never mind the stories we tell others about ourselves. We may be famous for being rebels, but our rebellions were small and largely ill-prepared and unpopular: constitutional nationalism dominates the span of Irish history. We did not protest like the Greeks nor cheer like Tory backbenchers when austerity came. The "ourselves alone" movement - Sinn Féin - is one aspect of the story. [Interestingly the old Sinn Féin party (not to be confused with the current one) was based on German ideas of autarky and Hungarian ideas of parliamentary absention (which resulted in the Ausgleich)]. Other threads include a certain idea of neutrality (inspired by WWII experience and the US refusing a post-war bilateral alliance), and an internationalist thread, which admires the ideals and goals of international co-operation and community. It's a complex mix of admiration of autonomy and of a true, working, international community in which Ireland should be embedded. (And, of course, that's simplistically put as well).

Given the economic dependence on Britain in the period after independence, and the freedom of movement and empowerment European integration has brought Ireland, there is something distasteful about British politicians and commentators holding up Irish struggle against British rule as a rallying image for rejecting the EU.

So beware of simple answers and symbols. In my opinion - and, judging from the papers and letters to the editor, this seems to be broadly in line with the current mood - the vast majority of the fault lies with the Irish government. (Though for the boom we all share blame for taking part). The Irish place the blame for our current crisis at the door of, well, Ireland. And the blame will be with the Irish government, not Europe, if the bail-out takes place. Accepting and needing any bail-out, after all, would be a consequence of the decisions we made in the running of our economy.

If the IMF-EU fund steps in, then we'll blame them for the mistakes they make.

UPDATE: See today's [Thursday, 18/11/2010] Irish Times editorial here. Emotive over the loss of sovereignty, yet clear that it was ours to squander.


  1. Public opinion in Ireland is actually crying out for international powers to step in. The people do not trust the government as they see them as too involved with the curent crisis to form a credible solution and the opposition is a poor alternative.

  2. Thanks for the comment!

    There's definitely an anger and suspicion of the government - the feeling that they've mismanaged the economy so badly and lied about the true extent throughout (even as we accepted the cuts and the justifications), that they've effectively proven themselves unfit to govern. In such a situation, international intervention is the logical outcome. There's plenty of outcry about sovereignty - but people don't really blame Europe.

    (So I guess I'm essentially repeating myself :) ).

  3. “There is something distasteful about British... commentators holding up Irish struggle against British rule as a rallying image for rejecting the EU.”
    I think your squeamishness is a little chauvinistic. My comments about Ireland, which you kindly linked to, are motivated by an internationalist defence of sovereignty. It was not simply bashing the EU, especially not on eurosceptic or nationalistic grounds that I do not share.
    The issue of Irish freedom has been part of the warp and weft of British politics during most of my life. Where people stood on Britain’s war in the six countries of Northern Ireland was a defining one, for me certainly.
    On wider points, of course all nations operate in a world market, where some are powerful and others less so, but that does not mean that countries should become subject to external political intervention or that elected governments are subordinated.
    One of the very disturbing things about the last week, despite all the consensual language about a request from Ireland, was how countries, including Germany, used the ECB to stir up markets against Ireland. This has dangerous implications and added a nasty element of force majeure to the situation – I’ve spoken to diplomats/officials who have been deeply disturbed by it.
    My argument is not that countries or people are isolated islands but is that global affairs, including international crises, cannot, must not assume the role that fate once played in pre-modern times in terms of naturalising, fixing or excusing inequality between nations or people.
    I am an internationalist and do believe in cooperation, alliances and federations to increase the sovereignty of all peoples over their circumstances. The ideas and principles that I adhere to are far, far bigger than nation states, or the EU.
    Notwithstanding the politicking, undoubtedly justified (not that Fine Gael have much to brag about) against Fianna Fail, the Irish Times made a wider point that, “squandered” or not, Ireland was given the freedom to determine its own affairs in this regard.
    “The Irish people do not need to be told that, especially for small nations, there is no such thing as absolute sovereignty. We know very well that we have made our independence more meaningful by sharing it with our European neighbours. We are not naive enough to think that this State ever can, or ever could, take large decisions in isolation from the rest of the world. What we do expect, however, is that those decisions will still be our own. A nation’s independence is defined by the choices it can make for itself.”
    I agree.

  4. @ Bruno

    Thanks for the comment.

    I'm sorry if my comment came across a chauvanistic: I wrote the post in a rush, and as I was responding to how the crisis was being protrayed in the British media (sovereignty doesn't seem to have been given such an airing as an issue in the other media I'd seen), I described it as "British". However, I'm also deeply uncomfortable about the way some Irish people invoke the past in such simplistic terms, and how people sometimes capture the identity politics to promote their own vision in emotive terms, rather than going through the principles and policies they wish to promote, and explaining what that should mean in practice, in what is a very complex situation featuring competing rights and claims. It's that style of politics which I find distasteful.

    With this post I didn't mean for it to be exclusively about your article (again, the lack of links is an indication that more time should have been spent on it).

    Your article was an attack on Van Rompuy's disparaging of a "go-it-alone" mindset, and expanded on it to asserting that the elites of Europe were dead set against sovereignty. It would be great to hear a fuller explanation of what your position is as a supporter of the "internationalist defence of sovereignty" entails, since in your blog articles so far I haven't really read much about what you think Ireland and Europe should do about the situation.

    The way the ECB has acted has been unsettling, and it highlights how divided things can be between the institutions as the Commission (including Rehn, who has been in Ireland) was caught on the hop. Still, it sounds like the ECB was loaning between 1/10 and 1/5 of its reserves to Ireland, and had decided that it couldn't continue. Any involvement that Germany may have had I'm unaware of.

    This raises two interesting questions:

    1. how far should the ECB, and thus the rest of the Eurozone, have been willing to lend Ireland (a sort of pre-bail-out bail-out, considering that any bail-out of Ireland will be loans), before the bail-out facility should have been activated? This relates to how bail-outs should work in general: do you think that countries lending other countries money should insist on conditions, or just lend the money and respect what policies are drawn up? Should the ECB be subject to some political control (to make it more transparent and to keep it from making such decisions so unexpectedly)?

    2. If Ireland doesn't take the bail-out, it will hurt Portugal: what about the implications for Portugese sovereignty and decision-making? Ireland currently doesn't need to borrow, but Portugal will need to soon, and damage to the Eurozone will negatively affect Ireland. So it's not just Ireland's sovereignty and position is at stake, but it must consider the best course of action to ensure the stability of the Eurozone, which is in line with its own interests. Portugal cannot make this decision, only Ireland can. Likewise, other Eurozone countries have an interest in the currency's stability and have sovereign rights and interests at stake as well.

    What I'm trying to get at (in an ineffectual, long-winded way), is how should the situation be dealt with according to your understanding of sovereignty and of sovereignty being increased through alliances and sharing?

    Should Ireland refuse? What does that mean for other countries and their sovereignty? How do you balance the rights of the bail-outers and bailees? (Should the scared independence of the ECB be diluted so countries [and perhaps the EP] can review its decisions to prevent unilateralism?).

    You've assertively defended the "sovereignty" part of your beliefs. I look forward to seeing the developing of the "internationalist" part.

  5. Good points.
    Yes you are right that the ECB has put €130bn around a fifth of its reserves into Ireland’s banks and it’s not surprising that it would be worried about where the money had gone.
    Talks had been ongoing with the Irish since October, following the Sep 30 bank restructuring announcemnt. The European Commission was, or seemed to be, content to let the question whether Ireland needed outside help ride until December’s 2011 budget.
    But the ECB wanted to go faster and push Ireland to go into EU-IMF receivership before then, the Irish resisted. What we know is that on Nov 12, the ECB started briefing against Ireland. The resulting market turmoil effectively put a gun to Dublin’s head and, important, made its resistance even harder because the cost of borrowing increased and few 10s of billions of bank deposits were lost.
    Germany was involved because the ECB is very close to Berlin and such a coordinated campaign, culminating in the Irish central banker accepting a bailout in Frankfurt as Dublin denied, must have come from the top. The ECB was right, in its own terms, to insist on security for its money but not right to use force majeure. The market turmoil meant that the decision was the beyond argument for the eurogroup/Ecofin, effectively depriving Ireland of a chance to have a proper political discussion.
    When you borrow other people’s money you do become beholden to them but should institution’s act in this rather hostile way to debtors? I think not. The ECB should probably have insisted on bank restructuring as a condition for liquidity. There is a certain double standard, in the sense that other banks, in Germany for one, are also in a mess.
    I tend, rather idealistically, to think that aid should not be too conditional in imposing economic policies (which is politics) on countries, especially when it is a question of powerful countries handing down monetarist dogma to small, weaker nations.
    I don’t think any country, let alone the euro zone, should hand over monetary policy to unelected central bankers (bureaucrats). But the problem is more structural (I have written about it a lot on the blog) in the response of the elites to the financial crisis, broadly speaking they have looked for bureaucratic fixes that are just displacement for the real problems, economic and political. Evading political accountability, bailing out banks and blind, mindless austerity seem to me to be about the worst possible response. We have whether the euro zone/EU/G20 route is tenable rather than just asking how Ireland is going to obey orders.
    What all European countries have to do is manage a default - the global imbalance that overvalues Europe against Asia where value production has shifted is going to have some form of correction it might as well be managed. More importantly European countries need to work together, sharing sovereignty, to transform their economies by increasing productivity.
    This fundamental problem of dealing with economic imbalances and Europe’s risk averse rentier culture means that the euro zone has to rethink itself (or it will break into a more or less formal core and periphery). Ireland and other euro zone countries need to have a public debate about what has happened and what it means.
    On your points about Portugal, they’re fair enough when you are in a club, but cooperation should not mean that the powerful bounce you by getting markets to move against you. The Irish Times point is very valid here. Choices must remain with peoples, the EU has a structural problem with that.
    I really think – and it’s a view expressed on the blog – that the crisis does mean more Europe but not as the EU is presently constituted. It is a much wider project and problem of political renewal.
    Are you based in Dublin?

  6. I think that some debt restructuring will have to take place, and I agree that mindless austerity is a very flawed policy. While I think that the ECB needs to be more politically accountable on some decisions, on balance I think its independence is good (just that it should have employment as well as price stability as its goals).

    I was based in Ireland, but I've recently moved to the Netherlands (for education). I'll be at the Bloggingportal Conference in London.

  7. I think the biggest problem in Europe right now is too much sovereignty as each country tries to outpace the country in a negative sum manner. The perfect example of that is the differing corporate tax rates in each EU country. If the EU held a standard corporate tax rate, there would be no jockeying by countries in the EU to see how much of their social welfare they could diminish to bring in a couple of corporate headquarters, so that they can now cut education spending. This is precisely the negative sum game being played by "sovereign" nations in the EU. This is also a result of a poor distribution of wealth in the EU allows for these jockeying for corporations to occur. The EU could play a positive sum game here, but that would require a lot more centralization and most importantly political will for European social welfare.