Ireland exits the Bailout, but not Austerity

Today Ireland has exited the EU bail-out programme - the first country to do so - but it doesn't mean an end to austerity. Appearing on TV last night in a State of the Nation Address, Taoiseach Enda Kenny praised the sacrifices of the public and said that Ireland had regained its international standing. However, "prudent budgetary policies" will continue, meaning that there will be further austerity. The transport minister has also cautioned against any "giveaway budgets" on the basis that the public will be skeptical of them.

Ireland still needs to repay the bail-out loans and reduce its debt, and monitoring of the national finances will continue at the EU level (although now it will be based on the semester system in line with other Eurozone states, rather than the more controlling Troika process). The senior coalition partner, Fine Gael (EPP), is hoping that exiting the bail-out will generate enough satisfaction that things are slowly going in the right direction, even if people aren't feeling any benefit in their lives or in their communities.

For the junior partner, Labour (PES), this strategy is unlikely to work. Having campaigned in the election on a platform of "Labour's way or Frankfurt's way", there is little gain for Labour in a slow recovery (despite its attempts to capitalise on it). And not only is the economy bad for Labour, but when it comes to popular, more liberal, stances on social policy (abortion and same sex marriage, for example), it doesn't seem to boost Labour's position.

Whatever the position of the governing parties, there is really little to be excited about on the Irish economy. The stronger export sector has been an advantage, but with the general economic malaise in Europe and high levels of private debt in Ireland, it's hard to see where the growth is coming from. The bail-out and banking debts that the public have been saddled with results in continuing austerity with Kenny aiming for 2020 as the year recovery will be complete.

Ireland may be the star pupil of austerity, but it hardly demonstrates that austerity is a star policy.

Breaking the link between Governments and the Banks: Tales from Statusquoland

The Irish Taoiseach, Enda Kenny, is in Brussels at the European Council with 2 aims: (1) ensure that Ireland has access to an emergency line of credit (the "Enhanced Conditions Credit Line") with as few conditions as possible to smooth Ireland's exit from the bailout programme, and (2) to have the European Council re-agree what they agreed back in June 2012.

That's right: a major win for Kenny would be the re-agreement of something that the European Council already agreed over a year ago! I'm not joking.

Back in June 2012, the European Council agreed that a Banking Union was the way forward (PDF). The banking debts had to be severed from sovereign debts because Member State governments cannot bear the cost of this most Europeanised of market sectors. The Banking Union should also create a way for banks to be re-capitalised or wound up on a Eurozone basis, so that the debt crisis would not happen again. The European Council even decided to review the case for breaking the link between sovereign debt and existing bank debt - something that would do wonders for the balance sheets of the Irish and Spanish governments and ease the burden on their people considerably

This outbreak of good sense didn't last very long. In September 2012, Germany, along with The Netherlands and Finland, declared that not only will past banking debt not be severed from sovereign debt, but the European Stability Mechanism would not recapitalise banks instead of governments. Instead the order for recapitalising banks in the future would be: private funds, then Member State governments, and only then would the ESM step in. So three Member States had decided to completely void European policy agreed between 27 countries just 3 months ago, and they completely ruined the idea of a Banking Union. Why should countries bankrupt themselves saving banks, for the Eurozone to help out the banks directly more than the countries? It would be pure madness.

So now Kenny wants to return to the June Agreement:

"Speaking at an event in the National Gallery in Dublin celebrating the 50th anniversary of charity group Chesire Ireland, Mr Kenny said he would again urge European leaders to fulfil their pledge to break the link between sovereign and bank debt.

“One of the failings or inadequacies of the European Council over the years has been an inability to actually complete programmes where decisions are made,” he said

“In this regard, I refer to the decisions that were made last year in respect of banking union. For Ireland and for other countries, it is absolutely critical that we follow those things through to completion before moving on to any other agendas.”"

It's a farcical position to be in and it shows how little progress is being made, and it shows that Merkel is perhaps the most conservative Chancellor ever: she literally does not want to change anything, and will only sanction limited change if its aim is to make sure things stay the same. Once, Merkel described the internet as Neuland - "New Land" - but even as  the digital agenda is being discussed in Brussels, it feels like Europe is stuck in the twilight of Statusquoland. Even the German powerhouse economy can only expect 0.5% of growth this year.

So as Ireland, the Eurozone's star pupil, is preparing to leave the bailout programme, it's hard to be optimistic. Austerity has hardly worked wonders on the Irish economy, with government debt higher than at the start of the progamme, and employment soaring after 5 years of cuts. Without even the rewards of agreed Eurozone reform, many question how worthwhile the status of "star pupil" really is.

Statusquoland: If at first you don't succeed, apply the same rules more strictly.

Axing the Upper House? Ireland votes on the Abolition of the Seanad

Voters are heading to the polls today in Ireland to vote on the abolition of the Seanad (or Senate), the upper house of the bicameral Oireachtas (parliament). It's accepted that the house has largely failed to demonstrate its relevance to Ireland today: there is little to report of changes brought about by the house, and it is not known for standing up to the government. With supporters of abolition claiming that getting rid of the Seanad would save €20 million and cut the number of politicians, it's a message that chimes with a lot of people.

The Seanad is a strange creature. It has limited powers and by and large can only delay Bills (see the Referendum Commission's website for more detail). It is elected by "vocational panels", with the aim of representing different strands of society (this was inspired by Catholic thought about society in the 1930s). However the vocational panels were never really properly set up, and 43 out of 60 of the members of the Seanad are in practice elected by local councillors. 6 Senators are elected by graduates of Trinity College and the National University of Ireland, and 11 are appointed by the Taoiseach (prime minister) to help ensure a government majority.

Claims of "jobs for the boys" and general ineffectiveness have plagued the house, with abolitionists pointing out that it didn't stand up to the government during the financial boom years. This seems a strange argument to me. The strong parliamentary whip system and the weakness of opposition on economic policy from the political parties in both the Dáil and the Seanad is more to blame than the simple institution itself. In any case the idea of an upper house should not be to build into the constitution an institution measured solely by the dissent it generates (a belated show of resistance popping up this week) or to copy the democratic mandate of the lower house, but to bring in more expert voices on specialist areas to add their knowledge and experience to the legislative process. The pros and cons of setting up a upper house that can bring in expert and minority voices into the debate, and the alternative of relying on bringing experts before Oireachtas committees is the central question. That all attempts to reform the Seanad to make it more effective have been scuppered makes a constructive alternative Seanad seem fantasy.

But when it comes down to it, I'm more in favour of keeping the Seanad than abolishing it. Getting rid of the Senate doesn't dilute the dominance of the executive in the Irish political system, or tackle the issue of the over-powerful whips. It won't save much money in the grand scheme of things either. On the other hand I can see the valuable contribution that an upper house can bring. The House of Lords in the UK has many, many flaws - you can't get much more "jobs for the boys" that the Lords! - but its active members have actually done well in generating reports and in the job of legislative scrutiny. A mix of direct elections and selection from vocational panels may be a way of strengthening the Seanad's legitimacy and expertise while keeping it in balance with the Dáil.

Frankly, I'm just being idealistic about bicameralism and what I'd like to see happening. When people go to vote today, they'll be voting against the background of decades of failed reform and ineffectiveness, and it's a tough ask for people to back vague reform. It's sad that the opportunity to refer the Seanad to the Constitutional Convention and then have a referendum was missed.


[There's also a second referendum on today, which more usefully would create a Court of Appeal to help ease the workload of the Supreme Court].

Irish President Michael D Higgin's address to the European Parliament

Today President Higgins of Ireland addressed the European Parliament on the Union and citizenship. (The President of Ireland is a ceremonial head of state that is directly elected, and, sadly, it is difficult to imagine a head of government in Europe giving such a speech today).

I recommend the speech, but to quote a few extracts:

"[T]he inspiration and the achievements of the founders of the European Union we inherit as legacy cannot be taken for granted. Today, citizens in Europe are threatened with an unconscious drift to disharmony, a loss of social cohesion, a recurrence of racism and an increasing deficit of democratic accountability in some decision making of an economic and fiscal kind. These threatening clouds hang over a Europe that in more hopeful times, chose to base its anthem, rather than on anything contemporary, on Friedrich Schiller’s poem ‘Ode to Joy’ and its musical setting by Ludwig Van Beethoven in his Ninth Symphony.

Parliaments do matter and must continue to matter. Centuries of effort have been invested by European citizens in securing the vote. It is to parliament citizens look for accountability, for strategic alternatives. If national parliaments, if the European Parliament, were to lose the capacity to deliver accountability where else might it be found? Is there an alternative that can meet the requirements of a deliberative democracy? I believe not and parliaments must draw on the resources of experience, of inherited intellectual capacity, in all its diversity and above all, from the best of contemporary intellectual work in a pluralist way.

[...]

We cannot, however, ignore the fact that European citizens are suffering the consequences of actions and opinions of bodies such as rating agencies, which, unlike Parliaments, are unaccountable. Many of our citizens in Europe regard the response to the crisis in their lives as disparate, sometimes delayed, not equal to the urgency of the task and showing insufficient solidarity with them in their threatened or actual economic circumstances.

They feel that in general terms the economic narrative of recent years has been driven by dry technical concerns; for example, by calculations that are abstract and not drawn from real problems, geared primarily by a consideration of the impact of such measures on speculative markets, rather than driven by sufficient compassion and empathy with the predicament of European citizens who are members of a union, and for whom all of the resources of Europe’s capacity, political, social, economic and intellectual might have been drawn on, driven by the binding moral spirit of a union.

[...]

Instead of any discourse that might define the European Union as simply an economic space of contestation between the strong and the weak, our citizens yearn for the language of solidarity, the commitment to cohesion, for a generous inclusive rhetoric that is appropriate to an evolving political union that is anxious to reach a future of peace, prosperity, inclusion, and in a sustainable way.

This is a serious challenge, not least because if we were to fail we run the risk of an economic crisis leading to a crisis of legitimacy for the Union. A Union that in its founding treaties is fundamentally founded on values – respect for personal dignity; freedom; democracy; equality; the rule of law and respect for human rights."

Childers resigns from the EP Irish Parliamentary Labour Party

The Irish Labour Party has had a rough few weeks. Currently in government with the centre-right Fine Gael, it had finally become the second biggest political party in Ireland after the last election (an achievement for the main centre-left party that had always been the 3rd party in Ireland). However in government the Labour party has gotten the flak for aligning itself too closely with Fine Gael's conservative policies. Labour had promised "balanced government" through moderating Fine Gael's influence, but it has little to show for its concessions in government.

The shockingly low result for Labour in the Meath East by-election at the end of March - where they only managed 4%! - is an indication of just how angry the party base is with the parliamentary party. Nationally, Labour's support is polled at between 7-13%, but a combination of low turnout and disaffected grassroots led to the collapse in the Labour vote. If it's going to mitigate the damage at the next elections, Labour in government will have to make a greater show of defending their centre-left values. Without this, it will be hard to motivate the party base or convince other voters of the value of giving their transfers to Labour candidates (votes transferred from candidates eliminated for not attracting enough votes is important in the Single Transferable Vote system). Then again, if a centre-left party doesn't fight for its centre-left values, it's hard to see the point of it in the first place...

Following this defeat, Nessa Childers, the Labour MEP resigned from the parliamentary party because of its support for the government. Childers has been at odds with the leadership of the party for some time, so the resignation is being dismissed as the loss of a semi-detached member, but her suggestion that Labour values may be more effectively expressed outside the Labour Party will probably have a ring of truth with some people.

In Brussels and Strasbourg this will not have much of an effect: Childers remains a Labour party member and will remain part of the Socialists and Democrats Group in the European Parliament. However, since she was the only Labour MEP to have been elected in the 2009 election (Labour's other two MEPs were substituted in after the resignations of the former seat-holders), it will be even more difficult for the party to retain these seats (electoral support in Ireland is more directly linked to the candidate than the party in comparison to other European electoral systems). Just a year before the 2014 European elections, it looks like the S&D Group will be lucky to retain even one seat in Ireland.

Liquidating Anglo Irish Bank

Last night the Oireachtas (Irish parliament) held an extended sitting lasting into the night to pass emergency legislation to liquidate the Irish Bank Resolution Corporation, the successor to the Anglo Irish Bank.

The legislation was sprung on lawmakers when news of a possible deal with the ECB over the billions of debt bound up in promissory notes to the bank was leaked. (You can read more on the background to the promissory notes here). The ECB board is scheduled to meet tomorrow and will decide on a deal on some of the Irish banking debt. This sparked concerns over the bank (that its assets would be at risk and that the state would be exposed at a time when creditors and debtors knew that liquidation was coming), leading to the government launching the bill through the Oireachtas under a guillotined procedure - the Irish president flew home from a visit to Italy on short notice to sign the bill into law.

The Irish Bank Resolution Corporation Bill 2013 (the Bill couldn't be amended so the wording is identical to the Act) was passed by the Dáil (lower house) by 113 votes to 35 just before 3am before going to the Seanad for approval. It empowers the Minister for Finance to order the liquidation of the IBRC, to order National Asset Management Agency (NAMA, Ireland's bad bank) to take a number of actions, including bidding for the assets of IBRC (i.e. swap assets for NAMA bonds), and to create or issue securities under a number of circumstances, including in return for release from liabilities. The Act will also fire all of the employees of the IBRC - while NAMA will rehire some of these, it will be a particularly shocking and disruptive time for them.

The deal on the promissory notes (if any) is not yet known, so the Oireachtas had to decide on half of the deal before the ECB agreed to anything. The speculation is that the promissory notes will be turned into long term government bonds by the Minister for Finance, turning the banking debt into government debt in return for the debt to be paid off over a longer period, lessening the need for budgetary cuts. The retention of responsibility for the overall debt, with no debt write-down, will be unpopular and it will be difficult for the government to present the deal as a victory in the fight for the separation of banking and sovereign debt. However there could (should) be savings when it comes to the interest on the debt. The final deal may end up having a different shape to it, but, whatever the detail, once the deal is accepted it is highly unlikely that further concessions should be negotiated.

There is no guarantee that the ECB will arrive at a decision on this today. The order of events means that it will be difficult to know whether, whatever deal is reached, a better deal could have been possible. But unless the deal includes a write-down on the debt, it will still be seen as cementing public responsibility over private debt.

February to be a big month for same sex marriage in Western Europe

French deputies voted by 249-97 in favour of redefining marriage as applying to same sex as well as opposite sex couples. The change is not law yet, but the vote represents one of the bill's main hurdles, and it has been passed in a very passionate political atmosphere, with rallies on both sides.

France 24 reports that 63% are now in favour of marriage equality, with almost 50% supporting equal adoption rights as well.

Meanwhile in Britain there will be a debate on the Marriages (Same Sex Couples) Bill in the House of Commons this week. The Conservative minister charged with steering the bill through Parliament has stressed that it's the right thing to do at a time when it looks like the Conservative party will face a large rebellion on the issue. Social conservatives within the party are feeling that they are under attack from the Prime Minister and his allies in the name of detoxifying the "Nasty Party" in order to improve the party's image. As Cameron failed to win an outright majority with his rebranded party, it seems that social conservatives are more willing to speak out against some of Cameron's key social policies. There will be a free vote on the issue so that Tory MPs are free to vote with their conscience, but a major battle in the Commons over the issue may promote the image of the Conservative party as a party more interested in fighting itself over issues that aren't salient with the public.

Neveretheless the widespread support for same sex marriage in the House of Commons means that it is likely to be passed by a broad coalition of Conservative, Labour and Liberal Democrat MPs.

In Ireland the Constitutional Convention has started its work and is scheduled to have a plenary session on same sex marriage in April (PDF). Though the Convention is mandated to look at only a few areas (and is unlikely to have much time to examine further issues on its own motion), and the Convention is not yet a major news story, attitudes in Ireland have changed considerably over same sex marriage. Civil partnerships were only brought in in 2010 (and in force from the start of 2011), but one poll in 2012 was already showing 73% of the population in favour of same sex marriage.

The Irish Presidency Work Programme

Ireland took over the presidency of the Council of the European Union at the start of the year, and last Wednesday Taoiseach Enda Kenny, leader of the Fine Gael-Labour (EPP-PES) coalition government, outlined the priorities of the presidency to the European Parliament. Sustainability, jobs and growth are the central mantra of the presidency, though the familar buzzwords didn't stop Kenny from attempting rhetorical flight in the Strasbourg chamber, enthusing about the European family.

In his speech to the European Parliament, Kenny outlined a large work programme, from CAP and CFP reform to collective copyright management and data protection. The Data Protection package is one of the biggest legislative changes and a flagship policy of the Commission. There's been worries that the law won't be passed before the parliament ends, causing the draft to lapse and the work to go to waste, so there will have to be a big push from the presidency to make progress here.

Interestingly, while he stressed the need to pass the 2-Pack of legislation (which I’ve written about here) and the importance of the European Semester, Kenny also expressed a willingness to engage with the Parliament on the democratic deficit – let’s see if any constructive measures make it to the statute books.

A major topic was, of course, breaking the link between sovereigns and banking debt, with the banking union and progress on the implementation of the Single Supervisory Mechanism. On trade, Kenny looked forward to the authorisation and opening of negotiations with the US, along with negotiations with Japan, Canada and ASEAN.

Finally, Kenny couldn't help plugging Ireland's big tourism campaign - The Gathering!

 

You can see a list of the measures behind these priorities here.

Abortion in Ireland: X Case Revisited Again

Ireland has become a much more liberal country over the last few years - for example, around 73% of people support same sex marriage - but abortion is still a bitterly fought issue. In referendums in 1992 and 2002, the Irish people voted for abortion to be permitted where the mother's life is at risk, but no such legislation has been passed in the 20 years since the X Case that prompted the debate. Tragically a woman has recently died after a miscarriage, sparking an intense debate over the law and reproductive rights in Ireland.

From the Irish Times:

"...pro-choice campaigners have called on the Government to legislate for abortion when the mother’s life is at risk, following the death of Savita Halappanavar after she miscarried at University College Galway last month.

Ms Halappanavar (31) was 17 weeks pregnant when she presented with back pain at the hospital on October 21st. Her husband Praveen Halappanavar claims she was denied a termination despite asking for one several times following her miscarriage diagnosis because the foetal heartbeat was still present.

She spent two days "in agony" until the foetal heartbeat stopped and surgery was carried out to remove the dead foetus. She died of septicaemia on the 28th."

I've blogged in 2010 about the A, B and C case decided by the ECHR in Strasbourg, which ruled that Ireland had breached the convention by not legislating to make right to abortion as described under its own laws accessible to women. Note that this ruling did not change the law on abortion in Ireland, but rather stated that not giving effect to rights decided on nationally breached the convention. The current rules on abortion are very strict, and there is a danger of a chilling affect on doctors, making them afraid of breaking a law that is uncertain, or perhaps even allowing them to refuse abortions by using the legal uncertainty as cover.

While the government has called for people not to prejudge the result of inquiries into Savita Halappanavar's death, it is clearly an on-going scandal that there is no clear law in this area despite two referendums and human rights rulings. There is no excuse for the lack of legislation on this 20 year old issue, and the government needs to act to bring clarity to the law, as voted for democratically and in compliance with the courts. There must be no more hiding behind inquiry after inquiry and report after committee report: it's long past the time for action.

The Council of Minister of the Council of Europe, which oversees compliance with ECHR rulings, will report on Ireland's compliance with the A, B and C ruling at the start of December.

European Stability Mechanism before the ECJ

Irish independent TD (MP) Thomas Pringle’s case against the European Stability Mechanism has reached the Court of Justice in Luxembourg, referred there for interpretation on 3 questions by the national court. The 3 questions, are:



(1) Whether the European Council Decision 2011/199/EU of 25th March 2011 [PDF] breaches the EU Treaties or general principles of EU law (i.e. is it valid law?);

(2) Whether Eurozone Member States are entitled to enter into extra-EU Treaties on the Euro, and if this infringes on the EU’s exclusive competence over the Euro; and

(3) If, should the European Council decision be ruled valid, Member States are only allowed to enter into (ratify) the ESM Treaty following its entry into force (1st January 2013)?


The case will be very important for 3 reasons. First, it will help decide if the stability mechanism is compatible with EU law; second, if non-EU treaties can be used to change the governance of the Eurozone or if the EU’s exclusive competence over the Euro means that the EU treaties would have to be changed; and third, the extent to which the European Council can amend the EU Treaties. All obviously important not just for solving the economic crisis, but for how the EU and the Eurozone is governed generally.


RTÉ has reported that all 27 of the court’s judges will sit on the panel for this case – an unprecedented for a case referred to the court by a national court. On the proceedings before the court, RTÉ reported:

“Michael Cush SC for Ireland said the ESM amendments were "fully compatible with the treaties".

He countered that the ESM "will not affect the union's exclusive competence regarding monetary policy for the euro area nor will it increase the limited competence that it has in respect of the coordination of the member states' economic policy."

Thomas Henze, a lawyer for the German government, said there was no indication of any infringement of EU law.

He countered Mr Rogers' assertion that the ESM should not have been ratified when the relevant treaty, the Fiscal Treaty, did not come into force until January.

[...]

After three hours and 30 minutes of questioning, the ECJ Judges asked legal representatives to stand over their statements.

Most of the questioning of the bench was focused on the oral statements from the European Commission and the European Counsel, although Mr Rogers was called to clarify and justify his arguments on several occasions.”

The ruling is expected by the end of the year in what could be a landmark judgment.

Agreement to agree on maybe agreeing. Perhaps.

The European Council once again agreed to agree on a Banking Union. It says a lot about the state of EU politics that this is a positive sign. The Guardian commented:

"What we are left with is a political fix which remains vulnerable to the fiscal equivalent of the next extreme weather event to hit the eurozone. The ESM, if it ever opens, is a cash machine. It will not solve the underlying factors that caused the mounting debt in the first place. That extreme event could come from a halting Chinese economy or double-dip US recession. Or it could come from mounting social protest. Europe-wide protests will grow because it is now clear, even to those who proposed radical cost-cutting at the G20 summit two years ago, that austerity is not working. The amputated limbs of the euro economy are not growing back of their own accord."

It's right to point out the vagueness and vulnerability of the agreement, but I'd go further: it won't take an extreme economic weather event to throw the agreement into doubt. Where was the extreme weather when Germany, Finland and the Netherlands tried to bury the June Agreement in Koenigstedt.

Yesterday the Journal.ie reported that the Irish dimension to the June Agreement may be revived:

"TAOISEACH ENDA KENNY and the German chancellor Angela Merkel have issued a joint statement affirming that Europe remains committed to splitting Ireland’s banking and sovereign debts.

[...]

The two “reaffirmed” that deal, where heads of state told the 17 Eurozone finance ministers “to examine the situation of the Irish financial sector with a view to further improving the sustainability of the well performing adjustment programme”.

The statement said Ireland was recognised as “a special case”, given the circumstances under which Ireland was frozen out of the bond markets, and said the finance ministers would take this into account when examining how to improve the terms of Ireland’s bailout deal."

While this is welcome, it still represents a regression from the deal struck in June: what is the purpose of the banking union if it doesn't divorce sovereigns from the banking debt, and how can it help in the current crisis if it doesn't affect the banking debt of Spain and Ireland? That there was a need to negotiate to return to a partial form of an earlier agreement demonstrates the farcical depths to which European politics has fallen. How can Member States progress on solving the crisis if they now have to work hard to ensure that the deals made aren't unravelled by ad hoc groups of Member States?

The European Council was hardly a shining beacon of good decision-making before, but this naked and self-defeating display of national interest politics is simply something else.

ESM to be examined by the European Court of Justice

The Irish Supreme Court, following a challenge by independent TD Thomas Pringle, has referred 3 questions on the European Stability Mechanism to the ECJ in Luxembourg to test its compatibility with the EU Treaties. Given that securing access to the permanent bail-out fund was the main reason most Irish people voted Yes to the Fiscal Compact, it has the potential to cause severe economic and political fallout.

The questions are:

"1.Is the EU Council decision of March 25th 2011 to amend article 136 of the TFEU valid and does it violate treaty or EU law principles?


2.If the decision of March 25th 2011 is valid, is a member state entitled to join the ESM before the decision comes into force?

3.Is the terms and operation of the ESM Treaty compatible with the principles and provisions of the EU Treaties?"

As far as I know, this is the first time that either the Fiscal Compact (not included in this challenge because the referendum changed the constitution to permit ratification) or the ESM Treaty will be examined by the ECJ for compliance with the EU Treaties. The Supreme Court has asked for a quick answer from the ECJ given the seriousness of the matter (The Journal.ie reports that a full panel of seven Supreme Court judges heard the case).

Even should the Treaty prove to be in compliance with the EU Treaties, it still needs to be decided by the Supreme Court whether or not it violates the Irish Constitution.

Faith schools, Groups and Plurality

BY CC Jeremy Vandel.

Tony Blair's argument for faith schools in The Irish Times yesterday was odd: "Faith schools can help bridge gaps in divided communities". Blair was quick to counter the obvious arguments against faith schools from the situation in Northern Ireland:

"Whenever the topic of faith schools came up it would not be long before Northern Ireland was mentioned. Weren’t the roots of the Troubles down to the children of different faiths being separated in different schools? There was even a claim from those who were adamant that the conflict “wasn’t really to do with religion”. Strange how many people behaved as if it was.

Schooling can divide communities. Think of the pivotal role of schools in desegregation in the US. That much of the argument is valid. But it is not the religious tradition, prioritised in affiliation of staff and students, that matters, but how each tradition is interpreted in the teaching and the life of the school.

Does it instil respect and understanding, an open mind, open to inquiry, at ease with diversity, ready to learn more about other faiths? Or does it create a closed mind, a mindset vulnerable to fear, distrust and coercion, a world where “error has no rights”? In short is it good religion or bad religion?"

Growing up in Northern Ireland, the vast majority of schools were connected with one (Christian) faith or the other - and there is often division on gender lines as well as religious ones. Together with academic selection, there's a lot of different schools in Northern Ireland, and simply not the population numbers or resources to fund it all. One thing we don't lack is division, so how can faith schools bridge these gaps?

"[On schools in Ballycastle]

On one side of the bridge lay the Cross and Passion, a Catholic school; on the other Ballycastle High, a mainly Protestant school.

Led by two outstanding religious education teachers the two schools tentatively began to get together in the late 1960s on a very informal basis. In the 1990s, through “Curriculum 2000” it became a much more formal and structured process.

Through the shared education programme funding, the collaboration has expanded beyond post-16-year-old students to include younger pupils studying for their GCSE exams. They now have a joint school choir and rugby team."

Hmm... So it was in coming together - working together, or singing together, or playing sports together - that they built bridges and overcame divisions? Well why not skip the expensive and time-consuming process of dividing people in the first place, and have them in secular integrated schools from the start?

"Many of our secular schools offer the same skills [from earlier: "instil[ing] respect and understanding, an open mind, open to inquiry, at ease with diversity, ready to learn more about other faiths?"], though I sometimes think they have a more difficult task. The gift is to help young people escape from what the American philosopher Martha Nussbaum, writing about “the new religious intolerance” – intolerance of religion – recently dubbed a world of “whatever”." (I personally would have associated "whatever" with indifference and not intolerance, but whatever...).

This is a confused piece. Cooperation between faith schools is a good thing, particularly in places like Northern Ireland where politics has made interfaith tolerance a sensitive issue, and where there is a stronger political impulse to preserve the identities of separate communities using separate institutions as far as possible. It can be difficult to overcome these divisions, and shorter-term methods of building up confidence and respect such as through cross-community or interfaith cooperation are a good thing.

It's a different matter to suggest promoting faith schools where there isn't the same level of historical and inter-community conflict, and to propose faith schools, and cooperation between faith schools, as a way of building bridges between communities. Apart from the fact that the model would encourage sharper division into group identities that may not have existed if people hadn't have been sorted into different schools, it's a mistaken approach to plurality to simply see it simply as a collection of co-existing strong groups. Real pluralism is a patchwork of groups and individuals, with many individuals caught in the overlap. Membership of a group in a pluralist society should not be something that either defines you - and being sorted into schools based on a religious or cultural group identity is a pretty strong way of defining someone early on in life.

This is not to say that group identity shouldn't be accommodated in society: it should. It is more a mark of the respect, tolerance and understanding a society has between groups in society the more they can accommodate each other in a shared space, rather than shutting each other away. Ideally we should not need faith schools to build bridges between us, but would have a common public space where we all interact as a part of life.

I am also uncomfortable with the way this brings religion closer to the state. Blair was at pains to distinguish between "good" and "bad" religion, but conferring resources and privileges equally among religious groups is not only a misguided way of looking at religious freedom, but it also draws them closer in to the state. The state has to decide what religion is deserving of resources (presumably based on numbers, which leads to the question of how far religious groups are encouraged to shout the loudest for resources and privileges), and also is drawn into questions on the role of religion in education. There's a difference between teaching children about different religious beliefs and educating children in a religious ethos so they respect religious beliefs. The classic case is science versus religion - what if religious beliefs conflict with teaching the scientific content of the curriculum? Tony Blair says that faith schools should abide by the curriculum, but it is hard to say on the one hand that a school may have a religious ethos, and then refuse it the freedom to teach its religious teachings, either instead of or along with the curriculum. The state should stay out of religion.

Sometimes it's more practical to foster understanding between groups by building bridges between their respective institutions - particularly in divided or post-conflict societies - but we should be working towards a pluralism that is a common public space for everyone, not a gangway of rickety bridges.

Mmm... Banking Flavoured Union

With Barroso calling for a banking union - and saying parts of it could be put in place in 2013 - there's wall-to-wall coverage of Banking Union in the media. There's not much I can add, except that it seems pretty clear to me that separating banking debt and the Eurozone banking system from sovereign debt is a key issue we need to gets to grips with and a Banking Union is urgently needed as part of the solution to the crisis. I've been thinking of covering Irish MEPs a bit more too, so I'll just leave you with a video I found of Marian Harkin's One Minute Speech on the subject:

Protest votes and constructive campaigns

Yesterday I voiced my reluctant support for a Yes vote in the Irish referendum over on the Guardian's Comment is Free website. Vincent Browne, an Irish journalist and broadcaster, contributed to the argument for a No vote. Perhaps it's unfair of me to go on about the referendum after the polls have closed (we should see the result later today), but this part of Vincent's argument in particular stood out for me:

"[On voting No] I will do so in awareness of the risk there is involved were a majority to do as I will do, and in disagreement with many of the claims made by the no side in the campaign."

Unfortunately this line devalues the rest of the argument, since it seems to be made from the viewpoint that he hopes that there is a Yes vote to prevent the consequences of a No vote, while at the same time being free to issue a protest vote. (But then perhaps I've misread it and he simply wants to emphasise that he is aware of the consequences). Vincent goes on to outline that he is voting No: in protest against the government, in opposition against the EU elite, in opposition against the German elite, in opposition to the neo-liberal agenda, to express indignation at the disregard for the procedures and rules of the EU, to prevent the fiscal rules from being written into the constitution, and in solidarity with those in Europe who have not had the chance to vote on it in referendum. I'm at a lost as to how a No vote could practically advance a political agenda on these fronts.

Now, it must be stressed that we wrote our arguments separately and without knowing the main arguments that the other would use, so we weren't really responding to each other. In fact, Vincent's argument is an extract of a longer article over at Politico.ie here. By coincidence, it was written on Tuesday, the same day I came out in favour of a Yes vote. In the director's cut version of his argument, Vincent admits that there will be austerity in any case and that we may have to ratify the treaty for a bail-out in the future (if we vote No now, then we would need to vote Yes in the future to get a bail-out, which he thinks will probably be necessary), but he bases his position on the need for a different kind of society:

"We need to work towards a radically different society, where people have some real control over their lives; where inequalities of wealth, income, power, influence, social capital and cultural capital are radically narrowed; where patriarchy is subverted; where respect is accorded to everyone equally, regardless of status, class, sex, wealth or position; where protections for workers are buttressed, not dismembered by “labour market reforms”.

And to achieve that those of us who believe in this kind of society have to win arguments and minds through thoughtful debate, diligent and truthful analysis expressed in accessible forms, devoid of the familiar weary clichés and bombast."

I would be interested in that debate, and in what Vincent sees as the main steps to get there. And what would be the kind of Europe that would facilitate this? What kind of Eurozone would be a more equal, just and lasting project?

I ended up siding with the Yes side this time around because I couldn't see any viable political agenda that could be pushed forward by voting No. If there was a more focused campaign, not limited to a single referendum, but on demonstrating support in Ireland and elsewhere in the Eurozone for the type of Eurozone people want to see, then it could form an effective rival vision. If Vincent - or others - are interested in promoting a vision of or a campaign for a more equal and workable Eurozone, then I would be interested in joining and supporting that.

In any case, I would like to hear what kind of Eurozone Vincent would vote for.

A very reluctant Yes on the Fiscal Stability Referendum

This is the fourth time I've written out this post. Over the last 2 months I've painfully shifted from a pretty definite No to a reluctant Yes on the Irish Fiscal Stability Treaty referendum.

I really don't like this treaty. It's clear that it will neither have prevented the crisis (if preventing excessive borrowing was the problem, the pre-crisis surpluses in Ireland and Spain would have meant those countries wouldn't be in the mess they're in), nor will it do anything to solve it. As I've pointed out before, the Treaty is 90% existing EU law, since the European Parliament has passed the "six-pack" of legislation last year. It's already mostly in force - it has caused political complaints in Belgium, and was part of the reason for the collapse of the Dutch government this year.
For these reasons I originally wanted a No vote as a political message against austerity and to promote a more balanced approach at the European level. I don't oppose some level of collective budget discipline nationally if it leads to a positive reform of the Eurozone: Eurobonds, the ECB becoming the lender of last resort, a banking union so that banking problems will not be localised and made the problem of one or two Member States, etc. But it should come as part of a grand bargain where it's not simply about the core and the periphery, but about building a working Euro-system. Suggestions that ratifying the FST would give Germany enough confidence in the Eurozone to sign up to Eurobonds "sometime in the future" did not comfort me.

So why have I moved towards a Yes? Two main reasons: the European Stability Mechanism (Treaty here: PDF) and the direction of Hollande.

Only Member States who have ratified the FST will have access to the ESM for future bail-outs. Given the extent to which the IMF has lent to Ireland more than it would have already if we hadn't have been part of a European bail-out programme, I have not been convinced by the No side's arguments that we will find another bail-out somewhere. It's argued that we'll get something from the IMF (which I doubt since we've already been lent 15 times our normal share), or that we will still be given access to the ESM despite being excluded from it since Eurozone politicians will not want to risk the stability of the Euro. I'm not convinced by these arguments: they require a political leap of faith, and for such a leap to be worthwhile, there needs to be the plan and the tactics behind it, not to mention the opportunity for it to work.

Hollande's election earlier this month may have raised the prospect that such a strategy might pay off, but it's clear from the news and the outcome of the summit on the 23rd May, that any progress on the Eurozone will be in addition to the FST, rather than going back to the drawing board - and an Irish rejection won't change that. The best we can hope for by rejecting the FST is to be faced with the FST plus some sort of growth treaty (or plus a growth protocol to the original treaty). There's little payoff for risking the uncertainty over Ireland's access to the ESM in my opinion, and I do not want to take the risk of greater austerity by Ireland being unable to access any fund. And on the "No to Austerity" platform of the No side, it doesn't really fit in with the state of existing law and Eurozone rules. The Treaty itself won't add any more to austerity in law, but it will impact on the confidence needed for any further steps in economic union.

I also can't see any Eurozone vision or strategy on the No side that could form the basis of working toward an alternative. It's very much of the "reject, and then let the rest of the Eurozone come up with a better deal to sell us" variety, and it smacks too much of populism for my political taste. So despite the almost equal bankruptcy of political vision on the Yes side, I have to reluctantly support a Yes vote.

Why isn't there a group for small states?

Yesterday I noted that in Ireland:

"All the political parties involved have trouble articulating a vision on Europe, and on making alliances to achieve their vision."

It annoys me that not only is the EU political universe centred on the Franco-German engine, but that politically, this is simply accepted. The economic crisis has made this alliance - the erstwhile "Merkozy" - even more influential than ever in recent years, and is justifiably a cause for concern in smaller states to see the EU institutions sidelined and the direction of the EU set via summitry. I'm not so well placed to talk about other small states, but in Ireland there seems to be a certain fatalism on the part of both the government and the opposition: the government never seems to think much about forming alliances or advocating at least a general vision for the EU that it wants to see, and the opposition, which often point to the similarities of self-interest between Ireland and the rest of the EU Member States/Irish people and the ordinary people of Europe, never outline a realistic political strategy for building an alliance/coalition around their ideas. (Indeed, it seems that the Governor of the Central Bank in Ireland is the only one advocating a vision of European Union - yesterday he proposed a "Banking Union").

There is an informal grouping of states called the Visegrád group - made up of Poland, Hungary, the Czech Republic and Slovakia. It may not be as visible or as influential as the Franco-German alliance, but it does have some cohesiveness on the EU stage (such as its own Battlegroup). So why, now that there are so many small states, given the number of small states and the increasing political weight of the big states?

A grouping of small states could give them a bigger voice on key issues and help ensure that the institutional balance is fair to states of all sizes. Static groupings of states might only be suitable for certain basic positions such as state equality - it would be hard to maintain coherent political positions between small states such as Finland and Portugal on the way forward in the Eurozone, for instance - but it would be a good step in securing the place of smaller countries in the political life of the Union. While Hollande's comments rejecting the Franco-German duopoly probably indicate a willingness to lead an occasional counter-German alliance rather than a complete break from the alliance, smaller Member States should be making the most of the opening to see how far a new fluidity in the politics of the Council will go.

For Ireland especially this could prove a good starting point: it's time to start thinking not just about what kind of EU we want, but how we need to work with others to achieve it. We need to have a more pro-active approach.

A referendum on political tactics

When the Fiscal Stability Treaty was agreed back in January (PDF), despite being short and to the point, it was hard to assess. First of all, the treaty is already 90% EU law, the European Parliament having passed the “six-pack” Barroso mentioned in his State of the Union speech – you can find the legislation here. The budgetary requirements have also caused a political storm in Belgium and been one of the causes (or the excuse for, on the part of the PVV) the collapse of the Dutch government.

However, though the treaty changes little in legal terms, it’s not something that could simply be voted against to force another renegotiation, as only 12 states need to ratify it before it comes into force. In addition, in the treaty for the European Stability Mechanism (PDF), it stipulates that only countries that have ratified the FST will have access to its funds for a bail-out. Despite the six-pack legislation not being subject to much debate in Ireland, the debate has so far centred around the big question of how Ireland secures its funding. The current bail-out arrangement lasts until 2013 when Ireland is supposed to return to the markets. Though there is widespread acceptance that the current austerity policy (essentially, the last 5 years) is not enough and that there should ideally be an investment and growth policy, the bail out loans cover the budget deficit for the Irish state, and without it Ireland would have to default, leading to harsher, more sudden cuts.

So far the No side has failed to come up with an alternative to the question: where would the money come from if we need a second bail out? It seems perverse, since the government line is that we won’t need one since Ireland is “on track”, but since the No side is based on the fact that the current bail-out programme won’t solve anything, it is not a question that can be ignored. One solution put forward by the No side is that Ireland could veto the ESM treaty – though this would be difficult since it can only be vetoed by states amounting to 10% of the subscriptions, of which Ireland makes up under 2%. All the political parties involved have trouble articulating a vision on Europe, and on making alliances to achieve their vision. This may partially be a result of the referendum process in Ireland and treaty structure of the EU as past referendums could block a treaty and force a renegotiation. This is not the case here, and though the quality of the debate is much higher than before (there have been no strange claims along the lines of abortion or conscription), the lack of an alternative vision is palpable. It means that the Irish government has an unimaginative and poor European policy, but in this case it helps the Yes side since the No campaign cannot rely on the “back to the drawing board” vote in the same way anymore.

But now there’s a Socialist in the Élysée talking about growth and leading the charge against austerity in Europe. The promise of Hollande to renegotiate the FST has already played a part in the campaign so far. For the No side this is the sign that a No vote would really count in the European debate on austerity. So far the messages from Hollande have been quite mixed, and there might not be a renegotiation of the FST per se:

“Hollande says he agrees with all existing provisions in the fiscal treaty, including tight limits on budget deficits and public debts.

[...]

Informal contacts have been taking place between Hollande’s camp and the authorities in Berlin, Frankfurt and Dublin, and despite Hollande’s public insistence on renegotiation, all signs suggest the ground is being prepared for a compromise.

Two of Hollande’s senior aides – policy director Michel Sapin and Europe adviser Catherine Trautmann – have indicated to The Irish Times that they may be open to a “growth pact” in the form of a protocol or a separate legal text, a fix that would leave the fiscal treaty as it stands.”

Would a No vote help bury the austerity policy, or would it leave Ireland unnecessarily politically exposed while an extra treaty is put together – or new proposals are made within the EU legislative system? With only a month left before the vote there will be no alternative treaty before the vote, so it will be down to what tactics seem most credible. Ireland will listening closely to what the Élysée says in the next few weeks.

UPDATE: Van Rompuy has called a summit for the 23rd of May, so the outcome could impact on an Irish referendum - especially if any growth pact is tied to the Fiscal Stability Treaty.

Hup Hollande Hup!

Sunday was a big election day for Europe. France elected its first Socialist President in 17 years with Francois Hollande, and the Greek electorate looks like it has given the two main parties a huge kicking.

Hollande will add to the pressure for a change in direction in the EU when it comes to austerity, and Hollande has already set himself up to be the leader of counter-austerity Europe. Though he will undoubtedly clash with Merkel, in the end they’re likely to muddle through unless Merkel sticks to an absolutist vision of austerity Europe. With austerity failing in practical terms – S&P used its report on Spain to critique the front-loaded austerity programme and the EU’s general policy – and countries like Italy voicing the need for a better approach to growth (while endorsing austerity in general), the political winds look like they will shift the continent leftwards to a degree (Europe is still dominated by the centre-right EPP political family).

Within Germany there is more debate on Eurobonds, etc, than I think outside commentators give credit for, though there is still a lack of debate. The opposition Social Democrats and Greens are more enthusiastic on Eurobonds and deeper fiscal integration, but the rise of the Pirate Party makes the German political scene more unpredictable. Germany has been caught up in a lot of comment on the rise of Die Piraten: what exactly are they about? Do they have the kind of leadership structure or policy programme that makes them a credible force? If they remain so unstructured – and wedded to “fluid democracy” (crudely put, where policy is crafted online by activists and then represented in parliament by Pirate representatives) – could they ever be capable of coalition with the other parties?

Sunday brought an election in the Northern German Land of Schleswig-Holstein, where the Pirate Party gained 8.3%, and there was little between the Christian Democrats (CDU) and the Social Democrats (SPD), even if the centre-left coalition is ahead - the rival Christian Democrats-Liberal bloc trial the Social Democratic-Green bloc 39% to 43.4%. It now looks like the Social Democrats will lead a coalition with the Greens and the Danish minority party SSW (which is not subject to the same 5% threshold as the other parties), that may have a majority of just 1. The Liberal FDP is unlikely to do as well at the federal level as in Schleswig-Holstein (honestly, after the bad year they’ve had, being kicked out of one state parliament after another, their 8.2% vote in S-H is a huge victory), but it just demonstrates how the sudden rise of the Pirates could splinter the political field further.

Muddling along will likely continue in Europe, except now the hope is that we’ll start to see a direction with more solidarity develop. The biggest shock to the system will be the Greek elections, where it could be very difficult indeed to form the next government. With the far-right getting into parliament and the collapse in the vote for the two main parties, political instability is going to dog Greece and the rest of Europe for a long time to come. France and Germany can’t afford to squabble for too long: Greece will be bursting back on to the agenda before we know it.

And the referendum in Ireland? I don’t know how much Hollande’s election will make a difference until – or if – he makes it clear if he is seeking another treaty to supplement the Fiscal Stability Treaty or a renegotiation. From what he’s said it looks like he wants an extra treaty – it’ll be easier to get this, as it will be easier for Merkel to agree to this without losing face – and Ireland might be in a difficult position if it rejects the treaty to push a joint cause with Hollande... and then have to re-run the referendum in order to get the second treaty too (though it should then be clear that enough’s changed to have a re-run at least). The vote’s not until the end of May, so there’s still some time to read the signals from the Élysée.

Fiscal Stability Treaty Referendum, bailouts and austerity

The referendum campaign on the Fiscal Stability Treaty is underway in Ireland. The main argument on the No side is that the treaty would impose endless austerity that would have to continue even after the bailout has expired, whereas the Yes side claims that if we don't ratify the treaty, we won't have access to the ESM ("Stability Mechanism") and we cannot count on the IMF for funding, meaning that a No vote leaves Ireland's means of funding itself uncertain.

It's accepted that Ireland cannot access the ESM funds if it does not ratify the treaty, but there's confusion over the level of funding the IMF can provide to Ireland. First, despite earlier Yes claims, Ireland will be able to apply to the IMF for funding. However, I'm not sure how much we can expect from the IMF. As pointed out over at Slugger O'Toole, the IMF usually lends around 3 to 5 times quote for borrowing, whereas funding has already reached 15 times of Ireland's quota. Funding has reached this level because of the certainty being part of the Eurozone bailout system has provided Ireland. If Ireland needs another bailout, could it really get the required money from the IMF? I can't see the IMF committing itself on an application that hasn't been made in circumstances that aren't fully known yet, so this uncertainty will likely dog the campaign right through to polling day. The uncertainty will benefit the Yes side if they can get these numbers across: it seems very unlikely that we will be provided with the level of funding we can avail of currently.

Depending on the IMF isn't as toxic to the Left as it might have been before in Ireland, given that the IMF seems to be making noises on the desirability of some stimulus spending, while the EU hasn't budged so far on that front. What's striking is that the Yes side have managed to determine the battleground of the referendum campaign. When it comes down to funding the state, it seems that it is no longer about avoiding bailouts, but trying to find the most advantageous bailout. To me this seems like a big change - a far cry from the general election last year when Sinn Féin was advocating leaving the bailout, spending the pension fund money for the budget and on a stimulus, and then returning to the markets in 6 months. Although I don't know if it will be picked up on much in the campaign, this shift should support the Yes side. Both sides don't have a clear vision of what a functioning Eurozone would look like, but in this case it favours the Yes side as the No side needs to actively portray a realistic alternative. If they accept that bailouts are needed to avoid immediate austerity through default, then it becomes much harder.

One option floated by the No side is that, if Ireland votes No, the government could block the ratification of the ESM Treaty (PDF), to force renegotiation of the terms of the treaty. Article 48 of the Treaty says that it will enter into force when it has been ratified by contracting parties representing 90% of the subscriptions to the ESM. Since Ireland represents less than 2%, it would need to ally with several countries in order to block it (or hope that Hollande's France takes up the tactic too). Without a common platform for an alliance to negotiate on, it's hard to see other countries going out on a limb for Ireland here (the Irish government should take note of this: if we don't have a vision for Europe, we can't complain when we can't drum up the allies to change things...). Will this be a factor in the campaign? Probably not explicitly, but the No side is weakened without a credible alternative strategy other than "vote against austerity policies".

[As an aside, the quality of this campaign so far is much better than the Lisbon campaigns. Nobody can read conscription or abortion into the Fiscal Stability Treaty, and argument have been about the substance (or at least the substance of different political tactics). However the move by the Socialist Party to link water charges with the referendum is shameful as it devalues the idea of referendums - that people are really deciding on an issue - and opens up the charge that at least some No votes are simply anti-government. It's even stranger since a No vote wouldn't affect the water charges issue. (For non-Irish readers: we don't pay for our water in Ireland apart from general taxation, and the government will eventually bring in water meters so people will have to pay water charges. Water charges will be brought in too in Northern Ireland eventually. When I've told people from different countries that we don't pay water charges, it always seems to shock them).]

I haven't yet written a post on my own stance on the Treaty - Yes or No - because I'm still undecided, and I have been considering supporting a No vote.