John Bruton

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PETER BARRY

peter barryThe loss of Peter Barry will be felt deeply throughout Ireland, but particularly in the city of Cork to which he devoted a life of public service.

Peter represented all that is best in Cork, its culture, its pride and its intimacy as a city. He knew, and was loved and respected, by his neighbours in Blackrock.

Just as I never heard Peter Barry say a bad word about another person, I never heard anyone ever say a bad word about him. This was perhaps the key to his success  as international diplomat on behalf of Ireland. He won respect without ever needing to command it. The inherent dignity of his personality sufficed to ensure that he always got a fair hearing for his views.

He was a crucial figure in the history of Fine Gael. At a time when Jack Lynch was dominant in Munster politics, Peter Barry’s election to the Dail in 1969 reminded the people of his province that there was an alternative, ready to govern.

That alternative government came to office in  March 1973, under the leadership of Liam Cosgrave, and Peter Barry was among its senior cabinet members. Serving in the portfolios of Transport and Power and in Education, he held his own in a government of many talents.

Among the practical matters he promoted as Minister for Transport and Power, was the completion of rural electrification. Even then, there were places in Ireland, like the Black Valley in Kerry and Ballycroy in Mayo that, because of their remoteness, did not have a supply. In 1976 put through the legislation to ensure that those remote areas at last got that requisite of a modern life, an electricity supply.

He was briefly Minister for Education, and in that capacity, I was his parliamentary Secretary (Minister of State).

In Education,he continued the implementation of the important reforms of his predecessor Dick Burke, establishing management boards for schools and the Transition Year.

He was deeply committed to the Irish Language and to all aspects of Irish culture.

But he also had an interest in the development of the European Union. He supported the late professor Jim Dooge, who chaired the committee at EU level that lead to Single European Act, which was the reform of the EU treaties that created a genuine single EU market for goods and services.

As has been pointed out by others in the last two days, his central achievement as Foreign Minister was the negotiation of the Anglo Irish agreement.

This agreement ended the international isolation of the nationalist minority in Northern Ireland. It created an institution, the Anglo Irish Conference, that ensured the governments in London and Dublin were required to work on ongoing basis to ensure fair treatment of both communities.

The very existence of the Conference, created by the Agreement, provided a safety valve for the discussion of differences that inevitably arose, from time to time, between the two governments. Rather than these differences becoming the subject of megaphone diplomacy, discussion of them could  be referred to the next meeting of the Conference. This allowed time for things to cool down. In a sense, this typified Peter Barry’s approach to politics. He combined conciliation with firmness and his calm demeanour lowered the temperature and allowed others to take the time to find a more constructive way forward.

Looking back over his early contributions in the Dail debates. I am struck by the number of occasions of which he raised the issue of unemployment, particularly the level of unemployment in Cork.

During our time together in cabinet in the 1980s, there were a number of major setbacks to employment in Cork, notably the closure of Dunlops and Fords. As the Minister responsible for employment at the time, I remember well the persistence of Peter Barry’s representations to preserve employment in Cork. It was partly as a result of his efforts that an Employment Task Force for Cork was set up at that time, and I believe some of the initiatives taken by that Task Force laid the foundation the tremendous industrial renaissance that took place in Cork and around Cork Harbour.

Peter Barry was immensely loyal to his friends. He was loyal, in every possible way, to each of the Fine Gael leaders under whom he served. I have particular reason to remember that deep appreciation.

 I believe that the loss of his wife, Margaret, was felt very deeply by Peter. They were an exemplary couple in every way, and Margaret’s support of Peter in his political life was vital to him. They inculcated in their children a deep sense of public service.

Peter Barry was a credit to Ireland and to Cork.

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THE IRISH PARTY RESPONSE TO THE RISING

Thomas DArcy McGee Summer SchoolHistory does not repeat itself, but it can teach us lessons.

Theresa May will face a similar problem in 2017, to the one faced by John Redmond and the Irish Party in the 1910 to 1918 period.

Theresa May is trying to gain independence for her country from a bigger Union. But a geographically concentrated minority of her people want to stay in that Union, in this case, the people of Scotland and Northern Ireland.

John Redmond wanted independence for Ireland from another Union. In his case, a resolute, and also geographically concentrated, minority wanted to stay in that Union. They were a majority in Down, Antrim, Derry and Armagh.

Similar problem, 100 years later.

Theresa May wants access to the market of the Union she is leaving, and to get it she may have to continue to accept some of the rules of the Union.

John Redmond had to do likewise, although he, unlike Theresa May, under the deal he won would have continued to have some input to those rules.

Each represent, or represented, smaller entity seeking separation from a larger one.

So, to get a good deal for exit, both need, or  needed, to know, understand, and work the politics of the Union they wanted to leave.  In this task, The Irish Parliamentary Party, of 100 years ago, did a markedly better job, than the British Conservative Party has done so far.

As the Brexit negotiation continues, Theresa May even may have to contemplate a partition of the UK.

This partition might exclude Scotland from some, or all aspects of UK law, if Scotland insists on remaining in the EU. This could be a price Theresa May might have to pay for willing consent by Scotland to the rest of the UK leaving the EU. Again similar to the problem John Redmond faced.

But, all in all, Theresa May’s challenge is the easier one.

Hers is a purely political problem. Her country is at peace, and the possibility of consent to Scotland going its own way has been conceded by her predecessor.

John Redmond had to contend, on the other hand, with the existence of two private armies in Ireland on either side of the debate.

He had to contend with a wider world in the midst of a World War.

He also had the difficulty that the principle of consent (the legacy of a more recent peace process) had not yet been invented.

I will explore these parallels further in this paper.

WHAT SHOULD WE COMMEMORATE?

Turning back to our own decade of centenary commemorations, we should reflect on something President John Kennedy once said.

He said a “nation reveals itself” by the events it chooses to commemorate.

This state is a rule of law based, parliamentary democracy, which has integrated itself with its European neighbours by peaceful negotiation and compromise. It is militarily neutral, and the military power is subordinate to the civil power.

 If we decide that we were to pick from our history a “foundation event”, and choose as that foundation event the 1916 Rebellion and Proclamation, does that accurately reflect, or reveal, who we really are today in 2016?

 Is the 1916 story a practical inspiration for Irish people as we navigate a process of reconciliation within Ireland, and of shared sovereignty, within Europe?

SHOULD WE NOT PRIORITIZE PARLIAMENTARY AND PEACEFUL ACHIEVEMENTS?

 Perhaps we should instead seek inspiration from the non violent achievements of a century ago,

  •  the enactment of Home Rule,
  • the ending of landlordism,
  • the establishment of the National University
  • the introduction of old age pensions and
  • National Insurance….

all parliamentary, and non violent  achievements, in which the Irish Parliamentary Party of John Redmond, John Dillon,  Joe Devlin, and, at times, of the North Louth MP, Tim Healy played a big part.

If one scrutinises the record of debates in the House of Commons, now available on line, one gets a sense of the practical patriotism of the (unpaid) Irish MPs who travelled to London to represent their constituents and their country.

Tim Healy’s successor as North Louth MP, Augustine Roche, was particularly busy on the land question, seeking new holdings for those who had lost their farms, and looking for a larger grant for road works for Louth County Council.

His successor, the 22 year old Irish Party MP, Paddy Whitty, elected in February 1916 and  the last person representing this area to sit in Westminster, raised questions about the conditions of post 1916 detainees, the tragic collision of two ships in Carlingford Lough in 1916 because of poor wireless communications, and the poor pay rates of carpenters in the GNR railway works….not the stuff of poetry, but practical matters, still relevant today.

Constitutional nationalist politics in Louth was far from dull, because of the split at national level between Tim Healy ( up to 1910 the North Louth MP) and William O Brien on one side, and the majority of constitutional nationalists, led by Redmond and Dillon, on the other.

For example, in 1910 Healy, having been defeated in North Louth by a Redmondite, Richard Hazleton, launched an election petition, alleging bribery and intimidation of voters, and demanding his opponent be unseated.

He won this case, and a Healy supporter, Augustine Roche, won the seat in the re run.

The Catholic Church exercised a strong influence in Louth politics, usually in favour of nationalist political unity rather than on religious matters as such.

The hotly contested character of elections in Louth actually strengthened constitutional nationalism in the county, and explains why constitutional nationalism held its own here against Sinn Fein, even in the 1918 General Election and in the 1920 local elections.

I now turn to the Irish Party’s response to the Rising.

After the Rebellion, on 11 May, John Dillon MP spoke in the House of Commons of his opposition to it, and of how Irish Party MPs had persuaded some of their constituents not to take part.

 He said nine out of every ten Irish people were opposed to the rebellion.

 But he condemned the house searches in parts of the country where there had been no trouble at all.

 He said his prime object was to stop the executions. He said the river of blood was undoing the work of reconciliation on which he and his party had worked so tirelessly. His party’s success, in ensuring the passage of Home Rule into law  after 40 years of  peaceful agitation, had created a new atmosphere between Britain and Ireland, and he argued that that was being undone by the repression.

 He recalled that when the American Civil War ended, Abraham Lincoln did not execute anyone. He said Premier Botha had put down a pro German rebellion in South Africa without any executions. This was an apt comparison in many respects.

 To put the Easter Rising in its proper context, one must draw attention to a few important points.

IRSH PARTY STOPPED CONSCRIPTION, PASSED HOME RULE, AND ENDED LANDLORDISM

Earlier in 1916, the Irish Party had, by political methods, prevented conscription being applied in Ireland, while it was being applied on the entire island of Britain.

A year and a half earlier, on September 18th 1914, it had had another vital parliamentary achievement which invalidated the case for a Rebellion.  The principle of Irish legislative independence for Ireland was won, by the passage into law of the Home Rule Bill. That centenary was not properly commemorated by the state in 2014

That happened BEFORE any rebellion here, and, as Conservative leader Bonar Law subsequently admitted, there was no going back on Home Rule.

The principle of Irish legislative independence was won, without a shot being fired.

 Likewise, before a shot was fired in 1916, the effective ownership of the land of Ireland into the hands of those who were working it, and landlordism abolished. In terms of land ownership, the Cromwellian conquest had been reversed….peacefully.

 Indeed it was the Irish Party’s achievement of land reform, which created an Irish rural middle class, something that enabled Ireland to remain democratic in the 1920’s and 1930’s, when so many other new European states, where landlordism had not been abolished, became authoritarian.

 The only open questions in 1914 were whether, or how, Home Rule might apply to Antrim, Down, Armagh and Derry (and perhaps Fermanagh and Tyrone). If some counties were excluded, would the exclusion would be temporary or permanent.

 But if that exclusion was once accepted, there was no barrier in the way of the rest of Ireland progressively winning ever greater degrees of sovereignty, starting from the platform of Home Rule.  Just as the 1921 Treaty turned out to be a stepping stone to greater sovereignty by peaceful negotiation, so too could Home Rule have been, if that was what the voters here wanted.

HOME RULE APPROACH WOULD HAVE BEEN BETTER FOR NORTHERN NATIONALISTS

 Home Rule, in the form passed into law in September 1914, did not guarantee a united 32 county Ireland. The question of exclusion of 4 or 6 counties from Home Rule was left open to be decided by a vote of the people in each county.

But all subsequent attempts to coerce Northern Ireland into a United Ireland, whether by the attempted incursions across the border in 1922, by the propaganda campaign in the late 1940s, or by IRA killing campaigns in the 1950’s and from 1969 to 1998, all failed, because they were based on a faulty analysis of the Ulster Unionist mind.

Looking back with the benefit of hindsight, I do not know how Irish nationalists, of any persuasion, really thought rule from Dublin could ever have been workably imposed on Unionists in places like Antrim and North Down. Did they expect

 + the British to coerce the Unionists,

 + did they expect to be able to coerce them themselves, or

 + did they  think these Unionists were just bluffing?

All three of these scenarios are politically unreal, and building a national ideology on something unreal is not healthy. They are the great unexamined questions at the heart of Irish nationalism.

An unwillingness to accept the real answers to these questions persists widely to this day.

John Redmond’s policy was one of attempting to persuade Unionist to accept a United Ireland, not to coerce them. His support for recruitment to the British army in 1914 was part of a (probably naive) attempt to persuade Unionists that they would not be sacrificing all their loyalties by taking part in Home Rule.

But, under the arrangements being considered in 1914, if an Ulster county opted out of Home Rule, they would have continued under direct rule from Westminster.

There would, under the formula being considered in 1914, have been no Stormont Parliament, no “Protestant Parliament for a Protestant people”, no B Specials, no discrimination and no gerrymandering of local government, because that would have been prevented by direct rule.

The concept of a separate Northern government and parliament only came onto the agenda in late 1919, after most of the rest of Ireland had rejected Home Rule and voted for complete separation and abstentionism in the 1918 General Election.

That closed the door on compromise, although I am not sure that all those who voted for Sinn Fein, and against the Irish Party, in December 1918 really understood all that would follow, between the opening of hostilities at Soloheadbeg in January 1919, when RIC members James McDonnell from Belmullet and Patrick O Connell from Coachford were shot, and the eventual end of the agony in 1923.If they had known or been told what would follow, would they have made the same decision?

BALANCING THE LIMITATIONS OF HOME RULE AGAINST THE COSTS OF VIOLENCE

Many of the limitations on the Home Rule powers could have been removed by negotiation. They were not of a character that justifies all the suffering that flowed from the decision to take the path of violence in 1916. That is, of course , a value judgement, but one must be able to make value judgement about history.

Some of the limitations (eg. The exclusion of Marriage law and tariffs) were only put therein the original bill, to reassure Ulster Unionists, when it was envisaged that all 32 counties would be fully included from the outset.

Other limitations would have been financially beneficial to a new Irish Administration, such as the exclusion of the financing of Old Age pensions and of Land Purchase Acts. This is because of their net financial cost, as Ernest Blythe was to discover in 1924 when he had to reduce Old Age Pensions, and Eamonn de Valera found in the economic war over land annuities.

Home Rule was not brought into force immediately on its passage into law in 1914 because it was felt that it would distract from what was expected to be a short duration war effort.

That postponement was not controversial in Ireland at the time. Indeed John Dillon had said “No rational man would expect the government to set up an Irish Parliament while war was raging”.

That said, Home Rule could have a come into effect in late 1916, and Carson had agreed to it on the basis that the six counties would be excluded for the time being, and would be administered directly from Westminster.

It did not happen because some Conservative members of government, Lansdowne, Selborne, and Long, objected because of the disturbed state of the country, a predictable consequence of the Rising, and the fear that Germany might again exploit the situation, as they had attempted to do earlier that year.

The effect of the Rising on wartime British opinion probably helped the objections being made by Long, Selborne and Lansdowne.

This disappointment, and the radicalisation brought about by the Rebellion, led to a hardening of the position of the Irish Parliamentary Party, so that by March 1917 they were unwilling to accept Home Rule involving any form of partition(temporary, indefinite or otherwise).

The  alternative path of violence, started upon by Pearse, Connolly, Clarke  and others in 1916, and followed from 1919 to 1923 by their imitators, was traversed at a terrible price.

I believe the Irish Parliamentary Party knew this, and so did the majority of the Irish people who opposed the Rising at the time, and by those who continued to support constitutionalism in the 1918 Election.

The Dundalk Democrat described the Rising as “an act of madness”.

The local authorities in Louth took a similar view. They would have realised that once violence is introduced into the blood stream of politics, it is very hard to get it out again. So it has proved.  Even those who initiated the violence began to recognise their error.

As early as 1924, a member of the IRB Supreme Council at the time of the Rebellion,  PS O Hegarty said of the decision to use violence in 1916.

“We turned the whole thoughts and passions of a generation upon blood and revenge and death; we placed gunmen, mostly half educated and totally inexperienced, as dictators with powers of life and death over large areas.” [1]

AN APPRAISAL OF THE WORDS, AND ASSUMPTIONS, OF THE 1916 PROCLAMATION

Violence, once initiated, tends to persist because of psychological as well as political factors.

Psychologically, once one has killed, or seen colleagues die, in a particular cause, it is very difficult to stop pursuing that cause, without feeling one has somehow betrayed the dead.

Politically, the absolutist wording of the 1916 Proclamation itself, made compromise almost impossible for some.

The Proclamation said the Republic existed, once  it was declared outside the GPO. The proclaimed Republic was a “Sovereign Independent State”, presumably of 32 counties.  No room for compromise there. The Rising was not to fight FOR a Republic, which would have left some room for compromise, but to  DEFEND one that had been proclaimed to exist already.

 Such a state does not even NOW exist.

Yet its existence was declared to “indefeasible” in the words of the Proclamation. That proved to be a recipe for endless conflict.

 It is on the strength, and in pursuit, of that  unqualified claim in the Proclamation, that people continue to be killed, including Adrian Ismay earlier this year.

The phrases used in the Proclamation, which our schoolchildren are now being asked to regard as the founding stone of our democracy, left little or no room at all for democratic negotiation or compromise. Therein lay the seeds of Civil War because, in politics as in life, compromise and negotiation are essential.

The men in the Four Courts in 1922,resisting the Provisional Free State government,  and those who resisted compromise in the more recent peace process,  all felt themselves sincerely bound by the absolutist and uncompromising words of the Proclamation, and the oath they had taken to defend what it has proclaimed.

Rather than the Republic being proclaimed in the name of a living Irish people, whose opinions had first been taken into consideration, it was proclaimed in the name of

“God and the dead generations”,

 neither of whom could, of necessity, be consulted about what they meant.

 The rights of the proclaimed Republic were not conditional on consent, but were

 “sovereign and indefeasible”.

 The Nation, was treated, in the wording of the Proclamation, as something separate from the people, or their views.

Many of the 1916 participants had taken an oath of allegiance to the Republic, which again made compromise difficult and conflict interminable.

THE ULSTER PROBLEM WAS CULPABLY IGNORED IN THE 1916 PROCLAMATION

Home Rule could have been in effect, possibly from the 1880’s on, were it not for the resistance to it in North East Ulster. John Redmond and other had wrestled with this problem for years, and, in Easter Week of 1916, it was the only unresolved issue concerning the implementation of the Home Rule Act.

These Ulster difficulties were fully known to the signatories of the Proclamation. But they were not addressed in a serious way in the Proclamation.

 The only oblique reference to the Ulster problem was the promise to cherish all the ”children” of the nation equally, and to be “oblivious of the differences carefully fostered by an alien government”.

 It is worth reflecting on the words used here.

Ulster Unionists were “children” of the nation, and normally children, in that era were expected to be obey.

 The wish of Ulster Unionists not to be governed from Dublin, was assumed by the Proclamation’s signatories, not to be something they had decided  themselves, but only the result of “careful fostering” by an “ alien government”. This did not show much respect for the seriousness, or the  reasoning powers, of those who had signed the Ulster Covenant, only five years previously.

 The problems of Ireland, as it was at the time, were not thought through by the authors of the Proclamation. That was a serious omission, particularly when it is followed by the taking of human life.

WAR SHOULD ALWAYS BE A LAST RESORT

Given the value Irish people place on each human life, those who take a life, have the primary burden of proof to discharge. It was for them to prove that no other way was open.  Other options must have been exhausted.

 That that test was not passed by those who initiated the Rebellion in 1916. The possibilities of Home Rule, already law, had not been exhausted ,or even tested.

 The use of force should always be a last resort.  It was not.

For every Volunteer killed in 1916 (including those executed afterwards), three Dublin civilians died.

The first casualty to die, on Easter Monday, was James O Brien, an unarmed DMP policeman from Limerick, shot in the face at the gate of Dublin Castle.

Another early unarmed DMP casualty of the Volunteers was Michael Lahiff, a 28 year old Irish speaker, from the West of Ireland, shot in cold blood on St Stephens Green.

Michael Cavanagh, a Dublin carter, who tried to retrieve his cart from a Volunteer barricade, was executed by the Volunteers.

The only casualty, on any side, in County Louth in 1916 was Charles McGee, an RIC constable, and also a native Irish speaker, who was from Donegal, who was accidentally shot dead on 24 April while a captive in the care of the Volunteers at Castlebellingham.  He is buried in Gortahork and has recently been the subject of a biography in Irish by his grand niece Madge O Boyle

 These were not “Brits”.

 They were Irishmen.

WHY HOME RULE WOULD HAVE BEEN A STEPPING STONE TO GREATER INDEPENDENCE

 The Home Rule Parliament, if it had come into being in 1916 or at the end of the Great War in 1918, would probably have been elected under the wider suffrage that applied in the 1918 General Election (all men over 21 and women over 30).

With this wide electorate, not only the Irish Party of John Dillon, but also Sinn Fein, the Irish Labour Party, and the group led by Tim Healy, would have got seats.

 All four groups would have pressed for ever greater degrees of independence, going beyond the Dominion status, negotiated after such loss of life in the Treaty of 1921.

TREATY OF 1921 ADOPTED DILLON’S POLICY OF 1918

In the 1918 General Election, which Sinn Fein won, the policy of the Irish Party, led by John Dillon, was Dominion Status for Ireland.

That was the policy on which Richard Hazleton contested the Louth constituency for the Irish Party against the Sinn Fein candidate JJ O Kelly. Hazleton lost by only a tiny margin of 1% in an electorate of 30000. That is what Dillon and Hazleton would have worked for if they had been elected

 The policy of Sinn Fein in that Election was, in contrast, immediate and complete separation of the 32 counties from the UK, on the basis of the 1916 Proclamation.

Sinn Fein won the election, on this “no compromise” agenda, but, after all the killing in the War of Independence, all they ended up with, under the Treaty, was Dominion status, the very policy of their John Dillon and Richard Hazleton in the election three years before.

It is said that Home Rule would have left British forces on Irish territory. But so also did the Treaty. It left the UK military in control of ports on Irish territory.  But these ports were handed back in 1938, through entirely peaceful negotiation.  The fact that those ports could be won back by purely peaceful negotiation on the eve of World War Two, shows that the limitations on Home Rule could also have been negotiated away, peacefully.

The use of force in 1916, and from 1919 to 1923, did not serve the interests of northern nationalists.

If a nation is to learn anything at all from history, it must be willing to examine, using all it knows now, what might have happened, if a different historical choices had been made. Otherwise there is little point studying history.

 The choice to use force in 1916, and again in 1919, must be subjected to reappraisal, in light of what  we can now  see  could have been  achieved without the taking of life .

[1] PS O Hegarty, The Victory of Sinn Fein (Dublin Talbot Press 1924) page 91

Speech by John Bruton, former Taoiseach, at a Seminar on “1916 and Revolutionary Republicanism” at the Thomas D’Arcy Magee Summer School in Carlingford, Co Louth at 10 am on Monday 22 August

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HOW TO REDUCE UNCERTAINTY AND INCREASE INVESTMENT

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Interest rates are low, so it should be attractive for companies to borrow to invest in new products and markets.

But United States companies are not doing so to the hoped for extent. Instead they are spending about $500 billion every year buying back their own shares.

Share buy backs keep up the value of their shares, which is good for their shareholders.  But they are not all that beneficial to the economy, in so far as they reward holders of financial assets, without creating new job opportunities through investment. They also may increase inequality in US society, because shareholders tend to be better off than the average citizen.

 But do the Companies have a real choice here?

Companies should only invest if the risk/ reward ratio of the proposed investment is good. Investment is inherently riskier than share buy backs, so the prospective rate of return on the investment must be above a hurdle that is set in advance. A lot depends on prospective demand in the market place.  If society is ageing, there may be fewer, and most cautious, potential customers, and that raises the hurdle which a proposed investment must surmount.

A related uncertainty, discouraging investment decisions, is the long run growth potential of mature developed economies.

Is it 3% a year, as in the past 60 years, or just 1%, as it was in previous centuries?  Economists differ on this. Some technologies add measurably to growth and GDP, other just make life easier without adding to the same extent to GDP.

If the political future is uncertain, and there are threats of protectionism, that also increases the risk of any investment that depends on exports.  Brexit is a good example of this, and so is the volatility and seeming irrationality of voter behaviour in other countries, including the US.

Against this uncertain background, Central Banks are trying to stimulate the economy by cutting interest rates.  This is supposed to encourage investment by reducing its cost, but that is happening very slowly, if at all. It also means that governments can borrow very cheaply, which may tempt them into mistakes.

A persistent low interest rate policy undermines the financial models of insurance companies and pension funds, which have to pay insurance claims and pensions out of interest they get on investments. If the interest rates stay very low, the money may not be there to meet the pension and insurance obligations. This is a further economic uncertainty.

We now have a big mismatch between savings and investments. We have a surfeit of savings, chasing very few convincing investment opportunities

So the policy of low interest rates cannot continue forever.

If low interest rates are not stimulating the economy sufficiently, what can, or should, be done?

If companies are not investing, perhaps governments should step in to stimulate the economy by investing on their own account.  This is what was done during the Depression of the 1930’s in some countries, like Germany and the US.

Whereas privately owned companies have to be satisfied that an investment will yield a return to their own bottom line, a government can take a longer and broader view of the return on the investment it makes.

An investment by government is financially justifiable if the eventual return, in extra taxes paid at some stage in the future, as a result of the extra economic activity generated by the investment, exceeds the cost of servicing and repaying the extra debt undertaken.

It can also take non financial benefits into account if it is satisfied it will have no problem servicing its extra debts from other sources.

But because the factors to be taken into account in assessing a government investment are so much wider, the calculations to be made are much more subjective and uncertain.

For example, how does one compare the return on an investment in additional places in a university sociology faculty, with the return on an investment in improving a lightly trafficked road?

It all depends on future trends and needs, and a multiplicity of other factors which are matters of pure judgement.

There is, however, another limitation on government investment that must be considered…the impact of ageing on the solvency of governments, thirty or more years from now.

A government’s   debt/GDP ratio may be 90% or less today, and, on that basis, it may be able to justify borrowing more to invest more.

But some important future liabilities of governments are left out of these official Debt/GDP calculations.

Predictable future increases in public pension liabilities and age related expenditures generally are not included in the Debt/GDP ratio.

Apparently an average 64 year old consumes six times as much healthcare as an average 21 year old.

When, over the next 20 years, the number retired increases relative to the number at work, and the number of 64 year olds increases relative to the number of 21 year olds, the resultant increase in government spending, relative to its receipts, will worsen dramatically, unless policies are changed in the meantime.

The numbers aged 65 or over in Ireland will increase by 97% by 2060, as against an average increase of 60% in the EU as a whole. By then, on present policies, age related spending by government would absorb 8.7 percentage points more of GDP than it does  today, which is twice the average EU increase.

Most EU countries could see their debt to GDP ratios increase to 400% of GDP by 2050, if pension and age related policies are not changed.

Uncertainty about how this might be done is a factor holding back countries, like Germany, which seemingly can afford to invest more, from doing so, because Germany is ageing rapidly on the basis of  its historic low birth rate.

All this uncertainty is leading to stagnation.

I believe the best way to avoid stagnation induced by uncertainty would be for governments in developed countries to produce a comprehensive, demographically based, scenarios for the economy for the next 30 years.

These scenarios should set out the menu of decisions that  may need to be taken and the consequences of taking, or of not taking them.  Obviously the EU could coordinate some of this work and the assumptions used, but the choices to be set out would be for national politicians.

These scenarios would be extremely controversial and subject to vigorous questioning from all sides.  But they would orientate  politics towards the things we can actually change, and away from the localism, emotionalism, and xenophobia we are seeing at the moment in some countries.

 

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ITALY……..EUROPE’S NEXT BIG CHALLENGE

Screen Shot 2016-08-08 at 17.31.08Now that the UK has decided to leave, the next big problem facing the EU is the constitutional reform referendum in Italy later this year.

In April the Italian Parliament has passed a package of constitutional reforms.  They were designed to improve the efficiency and stability of the Italian state, and reduce the ability of the Italian Senate to bring the government down.

Although  the package passed, it did not get  the required  66% majority in both Houses  to come into  immediate effect.

The only way the package can come into effect now, is if it is approved by the Italian people in a referendum.

The Prime Minister, Matteo Renzi, decided that this referendum will take place this autumn, and he has gone further and said that, unless the people approve the proposals, he will resign.

David Cameron’s recent failed  referendum gamble makes this look now to be  a more risky decision than when it was taken.

The proposed constitutional  reforms  include

  • reducing the size of the Senate
  • reducing the power of the Senate  both  to block legislation that has been passed by the Chamber of Deputies, and to bring down the government
  • reducing the power of Italian regional governments

Major reforms of the Italian state are urgent because the debt of the Italian state is 130% of GDP, and the state has to find resources for an ageing population, and influx of refugees, and bank rescue.   The Senate has proved to be an obstacle to some reforms.

Reforms are needed to increase the overall productivity of the Italian economy.  This  requires

  •  a simplification of the tax code,
  • less taxation of work and more on property,
  • simpler public administration and
  • a simpler and more efficient courts system.

State owned enterprises also need to face  more competition, as do some professions and retailers.

Before it joined the euro, Italy was able to devalue its way out of short term problems, as the UK is doing now. But devaluation  enabled it to avoid making big and difficult reforms.

Since it joined the euro, Italy has reformed its previously unviable public pension system, a task Ireland and the UK have yet even to discuss seriously. So Italy’s underlying ability to make big reforms should not be underestimated.

The polls on how Italians will vote in the referendum are very volatile.

The proportion in the “Don’t Know” category ranged from 19% to 42% in the two most recent polls.

Furthermore Prime Minister Renzi’s party lost ground in recent city elections, including in Rome.

Renzi’s main opponents are the “ 5 Star” Movement, who make their policies, and select their candidates, by polls over the internet. They reject the idea of career politicians and prefer politicians to be amateurs, who do the work on a short term basis. This sentiment is similar to the rejection of the opinion of “experts” and “elites” in the recent UK Referendum.

The trouble with amateur politicians is that, while they may have good ideas, they may lack the necessary technical ability, and staying power, to see their ideas through to full and effective implementation.

Italy is the 8th largest economy in the world. It has an excellent quality of life, and a great reputation.

Unfortunately its state system does not work well and there is not enough political consensus to put things right. This is not a weakness that Italy can afford. It needs a strong and effective state.  A rise in the price of fuel, or in international interest rates, could cause a big crisis for Italy, unless it has a state that is capable of making and fully implementing difficult decisions.

That is why Prime Minister Renzi’s referendum is so important for Italy, and for Europe.

 

 

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PULLING OUT THE 40 YEAR OLD THREADS THAT BIND THE UK AND THE EU TOGETHER

8268467475_fc8fb937e8_zDisengaging the UK from the EU will be like undoing all the stitching of a patchwork quilt, and then re stitching some parts of the quilt together, while making a new quilt of the rest. The UK is, at the moment, stitched into thousands of regulations and international treaties, which it made as a member of the EU over the last 43 years. Each piece of stitching will have to be reviewed both on its own merits and  for  the effect rearranging it might have on other parts of the quilt.

This is, first and foremost, a problem for the UK itself.

UK GOALS YET TO BE DETERMINED

We all think we know what UK voters voted against on 23 June. But nobody, even in the Conservative government itself, has a clear idea what UK voters voted FOR.  People voted to leave the EU for contradictory reasons.

Many voted  to leave because they wanted more protection from global competition. On the other hand, many of the Leave campaign leaders wanted to get out of the EU, so they could deregulate their economy, dispense with EU social rights, and promote more global competition and lower costs ( wages) in the UK economy.

The UK government must first decide which of these economic policies it wants and, only when it has done that, can it decide what sort of relationship it wants with the EU.

MUST THE UK BE OUT OF THE EU BEFORE IT MAKES A DEAL?

The 27 EU heads of government, on 29 June, told the UK that any trade agreement with it will be concluded with it “as a third country”.

This could be interpreted as meaning that the UK must first become a “third country”, by withdrawing from the EU, before it can have a trade agreement with the EU. This could mean that the UK would have to be out of the EU, before it knew what terms it might get on trade. This would be a very hard line EU position.

If that is what the 27 leaders meant , it is  probably contrary to Article 50 of the Lisbon Treaty, which says a Withdrawal Treaty must take account of the “ framework” of the withdrawing country’s  ”future relationship” with the EU.

……..OR MUST THERE BE TWO SIMULTANEOUS NEGOTIATIONS?

 I believe Article 50 means that there will be two negotiations,

 one on “Withdrawal” and

 one on the” Framework” of the future relationship.

I believe the two treaties must be negotiated, simultaneously and in parallel, and that the Framework  agreement cannot wait until the UK is already a “third country”, as  seemed to be implied by the 27 leaders on 29 June .

Ireland cannot afford to wait ,until the UK is already a “third country”, before border, travel, and residency issues between Ireland and UK are sorted out. We need these issues sorted out before the UK leaves.

IT WILL BE LIKE A DIVORCE NEGOTIATION

As with a divorce, the Withdrawal Treaty will be about dividing up the property. It may be easy enough to negotiate.

The Framework Treaty will be about the future, and like marital disputes about access to and care for children, will prove to be much more fraught and complex.

The question of whether there is  a “hard border” or not,  will flow from  what the UK  looks for, and what it  gets, in its Framework negotiations.

Nobody knows yet what the UK will look for, so this question is impossible to answer. The 27 EU leaders rightly insisted that the four freedoms – freedom of movement of people, goods, capital  and services- go together. Nobody has any idea yet how the UK will propose to get around that.

UK CANNOT MAKE DEALS WITH OTHERS WHILE IT IS STILL AN EU MEMBER

If the UK were to heed the call of Liam Fox MP, the UK’s new Minister for International Trade, that the UK   leave the EU Customs Union, so it could negotiate trade agreements with countries outside the EU, this would mean an immediate  hard border in Ireland. The Taoiseach’s diplomacy in recent days has probably helped head that threat off. Implementing Minister Fox’s proposal would have breached a UK Treaty obligation, a very serious matter for a country that relies on 30000 international Treaties.

The sort of border we have in Ireland will depend on the shape of the final UK/EU Framework agreement on all the four freedoms. Ireland can do no side deal with the UK.

 And if Ireland is to influence the EU positions in its favour, it has to present its case as  beneficial to Europe as a whole. It cannot be, or be seen to be, on both sides of the table at the same time, in what will prove to be a highly contentious negotiation.

Until it leaves, the UK is still a member of the EU, and is bound by all EU rules. It will fully participate in all key EU decisions, except those concerning  it’s own exit terms.

This means that the UK cannot do trade deals with other countries, while still in the EU.

Indeed it would appear it cannot even enter into commitments about future deals, particularly ones that might undercut EU negotiating positions.

 This is because, as long as it is still an EU member, the UK must, under Article 4 of the Treaty, act in “sincere cooperation” with its EU partners. The meaning of “sincere cooperation” was elaborated by the European Court  in judgements it made on  cases the Commission took against Germany and Greece  ,to overturn separate understandings each had forged  with other countries, on matters that were EU responsibilities without EU involvement .

So, to ensure that he stays within the law, Liam Fox may have to take a Commission official with him on all his trade travels around the globe, at least until the UK has finally left the EU!

THE UK SHOULD NOT BE RUSHED INTO TRIGGERING ARTICLE 50

Indeed the more closely the UK government looks at its options, the longer it may take to decide when to trigger Article 50.

The leaders of the EU 27 should not rush the UK on this.  Short term uncertainty is a very small price to pay for avoiding a botched and ill prepared exit negotiation.  Everyone would lose from that.

The UK civil service did not, after all, expect to find itself in this position. Indeed UK civil service studies, done long before the Referendum, concluded that the UK’s then existing relationship with the EU was just about right. Furthermore, once Article 50 is triggered, the UK cannot, easily or legally, change its mind and revert to the status quo, EVEN after a General Election.

A MAJOR DISTRACTION FROM OTHER  VITAL WORK

Meanwhile, Europe, with so much other work to do, has to turn inwards and devote itself to unravelling 43 years of interweaving between Britain and Europe. All this highly demanding technical work has to be done, at a time when Europe should be looking outwards towards the opportunities and threats of a rapidly changing and unstable world.

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THE UK NEEDS TO WORK OUT WHAT IT VOTED FOR LAST MONTH

union-jack-1027896_960_720I believe the UK itself needs to prepare a realistic proposal, taking the EU Treaty obligations of others into account, on the future relationship between the EU and the UK that it believes would be in the interest of both the UK and the EU.

That is a process that has to take place in the UK alone and not, at this stage in the other EU countries.

The UK needs to do its home work first. The UK needs to take full ownership of the challenge posed by decision in the referendum that the UK itself decided to have .

My own sense is that a relationship between EU and UK that is limited to trade in goods, and to free travel with passport controls, is easily attainable, if the UK is willing to accept EU goods safety standards.

The question is whether the UK would settle for that.

Services and movement of people are inherently inter related so this would not cover financial services exports from the UK.

On migration, the UK position is made difficult by the fact that the UK long pressed for early EU enlargement, and then, like Ireland, opened itself the migration from the new EU members without availing of the transition period.

Now, without acknowledging its own contribution to the dilemma in which it finds itself, the UK has decided to reverse all this by leaving the EU, as if the EU alone was responsible for the consequences of these UK decisions.

I fear that these contradictions within the thought processes of the UK itself will not be resolved without some sort of crisis.

From what I read, it seems to me that UK leaders are still going around the continent looking to EU leaders to solve the contradictions in the UK’s own thinking for them, which is a bit unfair.

The UK should not try to pick off individual EU states by making them special offers, because that will anger other EU states. The governments of all the 27 remaining EU states have to bring their public opinions with them too

The UK needs an agreement that all the EU states and the elected European Parliament can live with.

Ultimately all EU states are bound by the Treaties, and are required by law to cooperate sincerely with one another to “attain the Union’s objectives”.

The European Court of Justice and the European Commission are obliged to follow the EU Treaties and ensure they are respected by the member states, the Council of Ministers and the European Commission.

The Commission represents the common EU interest, and is particularly attentive to the needs of smaller states. The UK should never give the impression that it would like to bypass the Commission, by going over the Commission’s head to Berlin or Paris.

While the European Council will authorize the negotiations with the UK, it is the Commission that will do the negotiation. The European Council can issue negotiating directives to the Commission, but the European Council acts by unanimity, which leaves a lot of discretion to the Commission.

So the UK needs to come up with a comprehensive proposal that is framed in the context of these Treaties and of the needs of each of the 27 (very different) EU states.

It should probably publish that proposal, in the form of a Green Paper, before triggering Article 50.

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THE EU IS A FRAGILE, VOLUNTARY, UNION THAT CAN ONLY WORK IF THERE IS GIVE, AS WELL AS TAKE

cropped-European-Union-flag-006.jpgThere is no denying that the Brexit decision is a blow to the EU. There is a real risk now that the 27 EU countries will start pursuing national interests at the expense of the common EU interest. If they do, everyone will lose.

The 27 EU states need to act resolutely to strengthen EU wide democracy, to ensure respect for EU rules, and to show that the EU can do business efficiently with the rest of the world.

The European Union is not a monolith. It is a voluntary Union of 28 states, with no independent tax raising power.

It operates on the basis of rules, which its 28 members must freely respect. If they fail to do so, the EU ceases to mean anything.

These rules are made under the authority of the EU’s Treaties, which have been ratified by all member states, and the Treaties can only be amended if all 28 states agree.

The more members the EU has, the harder it becomes, by a form of geometric progression, for the EU to amend its Treaties.

A club that has no power to change it basic rules will eventually fossilize and die.

The EU’s 28 members are, in theory, sovereign equals, regardless of differences in population or wealth.  But voting weights do recognise differences in size, on all issues where unanimity is not required.

The EU makes trade deals on behalf of its members, using the extra bargaining power that its size gives it. But because it negotiates on behalf of 28 states, not just one, it can be harder for the EU to finalise a deal that it would be for one state, negotiating alone.

In the case of some Trade deals, it is sufficient  for them to be ratified by the European Parliament alone.

In others, all 28 national parliaments must ratify too. In these cases, the EU has much more difficulty being an effective trade negotiator.

RESPECT FOR RULES BY MEMBER STATES IS AN EXISTENTIAL NECESSITY FOR THE UNION TO SURVIVE

If one or more member states get into a habit of failing to respect EU rules or directives, the EU ceases to be operational, particularly if the states failing to respect the rules are bigger states.

Recently France has threatened to flout an existing EU directive because efforts to amend it, in a direction France wanted, are being blocked by the national parliaments of 11 EU states.  In response the French Prime Minister, Michel Valls, is threatening not to implement the existing directive, which would completely undermine EU rulemaking.

Michel Valls said

“If it is not possible to convince … France will not apply this directive.”

That is a direct threat to the EU from a founding state. It is really dangerous

COMPROMISES BETWEEN NATIONAL INTERESTS NEEDED IF EU IS TO DO TRADE DEALS

Likewise, if it becomes too difficult for the EU to complete trade agreements because a few states within the EU hold up the agreement in order to advance a national interest, then the EU’s utility as a trade negotiator fades away.

This was an argument  advanced by some of  those who favoured Brexit, namely that the UK could negotiate its own deals more easily outside the EU, without having to wait for 27 other countries to agree. That thesis will be put to the test soon.

Commission has conceded, under pressure from national government facing early elections, that the Trade deal with Canada must, not only be ratified by the European Parliament and the  28 government, but by the 28 national parliaments as well. This is a risky decision.

If the EU’s deal with Canada fails because one or two national parliaments fail to ratify it, years of work by Canadian and EU negotiators will go down the drain. Other countries will begin to doubt if negotiating with the EU is worth their time. The Brexit advocates will have won part of their argument.

A lot more is at stake here than the content of the agreement with Canada.

TREATY CHANGE MUST ALSO BE POSSIBLE

It has become accepted wisdom in every EU capital now that Treaty change is off the agenda. This is because  of

+The requirement to have a referendum in Ireland on a Treaty change involving a transfer of sovereignty
+ the voluntary decisions of France and the Netherlands to have referenda on certain EU matters, in the Netherlands case  even on a minor agreement with Ukraine.
+ the expectation that a Treaty change would be preceded by a cumbersome  Convention.

The net result of all of this is that the EU will not consider Treaty changes, even ones that might make it more democratic.

If that remains the case, the EU will eventually freeze up, because it will not be able to respond  to new circumstances, and its member states will have to look to other, less democratic or transparent institutions than the EU, to advance their collective interests. One could even see NATO being called into service for more broadly defined “security “ purposes.

Some may argue that Treaty change in general is not urgent.  I agree there is no need for a comprehensive review of the Treaties, so soon after the Lisbon Treaty came into force.

But a Treaty change to respond to concerns that emerged in the UK referendum campaign, for example changes to make the EU more visibly democratic and accountable , should be possible.

For example, Treaty changes could be envisaged to

  1. Have  the President of the European Commission be elected directly, in a two round election, by the entire electorate of the EU. 
Have the President of the Euro group be similarly elected by  the Euro zone countries
  2. Give National Parliaments of the EU, if a minimum number agree, a power to require the Commission to put forward, for consideration, a legislative proposal within the EU competence in the Treaties.
  3. National Parliaments already can delay EU legislation, so why not allow them make a positive proposal?
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WILL BREXIT NEGOTIATIONS BE OVER BEFORE THE 2020 UK  GENERAL ELECTION?

union-jack-1027896_960_720The next UK General Election will be in 2020.  If the Article 50 notice is served in 2017, it is possible that the process of UK withdrawal from the EU will not be concluded before the UK General Election in 2020.

That might allow the UK Electorate to take a second look at their decision of 23 June.

The Article 50 process, once activated, proceeds according to paragraph 2 of  Article 50.

 The mechanics of the negotiation are set out in Article 218 (3), which governs the making in international agreements by the EU.

It provides for the negotiation to be done by the Commission, subject to directives from the European Council. Ireland would formally make its input via the Council.

A key phrase in Article 50 is that the Withdrawal negotiation would be conducted

 “taking account of the future framework of its relationship”

with the country leaving the EU .

In other words, the Withdrawal would take place within a wider framework, which would also be  agreed between the EU and  the UK.

So there would be two parallel processes

  •  a negotiation of a framework of  the future relationship with the UK, and
  •  the Withdrawal negotiation itself.

In effect the two negotiations would be linked.

This is different from what Commissioner Malmstrom said recently.

She said the broader negotiation could not take place until AFTER the Withdrawal agreement with the UK was concluded, and the UK was already outside the EU.

Her interpretation seems to me to be contradicted by the words of Article 50 because it ignores the fact that the reference in Article 50 to a broader framework agreement.

If the  formal  Withdrawal arrangement under Article 218 (3) has to be subject to a wider framework being agreed, the whole process could take a very long time indeed,  and meanwhile the  status quo would continue until both agreements are completed and ratified.

The Withdrawal part could be quickly agreed, but the future framework would be much more difficult and could drag on and on, because it would have to cover all sorts of knotty trade and regulatory issues which could not be settled on the basis of generalities.

That is assuming the UK does not join the EEA, which would simplify these “framework” issues.

It also assumes unanimous consent in 2019 of the 27 EU members to extend the 2 year withdrawal period, but that should not be impossible

Of course, it requires the UK  not to derail the process by unilaterally breaching the Treaties by failing to implement EU law, during the negotiations, Eg by immigration  controls or repealing  some EU legislation on working hours.

It assumes that the UK would be willing to stay in a “half in/ half out” position for a long time, without enjoying the supposed benefits of Withdrawal, but with its influence in the EU diminished.

The UK should probably have given more thought to these complexities before triggering a  referendum.

 But the complexities do allow time for reconsideration, assuming there is, at some time in the next three years, a political willingness to reconsider in the UK.

That does not look likely now, but moods can change.

The UK has a big balance of payments deficit already….Brexit or no Brexit.

The inevitable unwinding of that deficit will reduce economic growth, which normally would also reduce immigration. So opinion may be different in 2020.

That said, other EU countries, including Ireland must prepare our economies on the assumption that full Brexit will happen.

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UK GOVERNMENT FIRST STEPS NOW

Now that the UK has voted to leave the EU, the first step has to be taken by the UK Government.

It must decide what sort of relationship it wants to have, trade wise, with the rest of the world.

At the moment, that is governed by agreements negotiated, for the UK, by the EU.

If the UK simply leaves the EU, all those agreements will  fall, as does UK membership of the World Trade Organisation(WTO). Agreements with dozens of non EU countries, will have to be negotiated again, at the same time as negotiating  with the EU. A lot of work.

Basically the UK government will have to choose choice between three options

  • Leave the EU and, like Norway, apply to join the European Economic Area (EEA),
  • Negotiate a new special trade agreement, like the agreement Canada or Switzerland has with the EU
  • Leave the EU without any trade agreement and apply, as a separate country, to join the WTO

The EEA option could be put in place quickly and would not disrupt trade all that much.

The EEA is a readymade model for external association by a non member with the EU. It could be taken down from the shelf, so to speak.  But, as an EEA member, the UK would still have to implement EU regulations and contribute to the EU budget. It would not allow curbs on EU immigration. The EEA option has been dismissed by “Leave“ campaigners, but it does involve leaving the EU, and  complies  with the literal terms of  the  referendum decision.

If the UK experiences severe balance of payments problems over the summer, the EEA option may become attractive. The UK already has a big balance of payments deficit anyway and capital inflows may be inhibited by the Leave vote. The EEA option would buy time, and would not preclude leaving altogether eventually.

The second option, a special trade deal, would be much more difficult.

It would require a detailed negotiation on every type of product or service sale between the UK and the 27 member countries of the EU, including across our border.

Such an agreement would take years to negotiate (probably 7 or 8 years), because it would be subject to domestic political constraints, and political blackmail attempts, in all EU countries, each of whom  would have to ratify it. If it proposed curbs on immigration from the EU, the EU countries affected  would make difficulties with other aspects of the deal, as a bargaining counter.

It is unlikely that a Trade Agreement would allow the UK to sell financial services into the EU. Indeed it would be in the interest of EU countries, that might hope to attract financial services, to make sure the UK got few concessions .

The third option…leaving the EU with no agreement… could come about, either because that was what the UK chose, or because the negotiations on a special trade deal broke down or were not ratified by one or two EU states.

It would require the application of the EU common external tariff to UK or Northern Irish products crossing the border into the Republic.

Average EU tariffs are around 4%, but on agricultural goods the mean tariff is 18%. The imposition of these tariffs is a key part of the Common Agricultural Policy, which protects the incomes of EU farmers. We would have no option but collect them at customs posts along our border. All forms of food manufacture and distribution within the two islands would be disrupted.

The disruption of the complex supply chain of the modern food industry would be dramatic and the knock on effects impossible to calculate.

A similar effect might be felt by the car parts industry, which is subject to tariffs, and is important to some parts of England.

Meanwhile the remaining 27 countries of the EU, and the EU institutions, will have a lot of thinking to do too.

They need to respond decisivly to the (false) claim that the EU is not democratic.

All EU legislation has to be passed by a democratically elected European Parliament, and also by a Council of Ministers who represent the democratically elected governments of the 28 EU countries.

The members of the European Commission must be approved by the democratically elected European Parliament.

But there is room to further  improve  EU democracy.

I  would make two suggestions ,

  • The President of the European Commission should be directly elected by the people of the EU in a two round election , at the same time as the European Parliament Elections every 5 years

2.)To create a closer link between National Parliaments and the EU, a minimum of nine national parliaments agreeing should be sufficient to require the Commission to put forward a proposal on a topic allowed by the EU Treaties . National Parliaments can already delay EU legislation, so they should be free to make positive proposals too.

That said, the EU should avoid over promising, and should not allow itself to be blamed for all the problems people face in their daily lives.

The EU is not an all powerful monolith that can solve the problems caused by technological change and globalisation. It is just a loose voluntary confederation of 28 countries, with no tax raising powers of its own. Nor is the EU responsible for debts mistakenly taken on by its members.

If the losers of globalisation and technological change are to be sheltered from misfortune, it is for the 27 states, not the EU itself, that has the taxing power to redistribute money from the winners from globalisation  to the losers.

The UK has not been particularly generous in this regard.  Its welfare system is modest, and its investment in productivity improvement has been poor.

In some respects, UK voters  have just mistakenly blamed  the EU. for the effects of the  omissions, and under performance, of successive UK governments.

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THE EU IS ALREADY DEMOCRATIC…..TWO WAYS IN WHICH THAT CAN BE MADE MORE VISIBLE

The-UK-and-EU-flags-010One of the recurring themes in the debate about UK membership on the EU is the (false) claim that the EU is not democratic.

All EU legislation has to be passed by a democratically elected European Parliament and also by a Council of Ministers who represent the democratically elected governments of the 28 EU countries.

It is true that the members of the European Commission are not democratically elected by the people, but their names must be proposed by democratically elected governments of the 28 countries, and the Commission as a whole must be approved by the democratically elected European Parliament.

In many countries, Ministers serve in government who have not, as individuals, been elected directly. Their democratic mandate comes from the elected government of which they are part.

This is not to say the there is no room to improve the democratic legitimacy of the EU, and of its policies. I believe the EU could respond to the UK referendum by further enhancing EU wide democracy.

I make two suggestions to improve the visibility of the democratic character of the EU, and create a genuinely European democratic debate, rather than 28 separate national debates about EU matters

  • The President of the European Commission should be directly elected in a two round election by the entire people of the EU, at the same time as the European Parliament Elections
  • It should be possible for the National Parliament of the 28 to come together to request that the Commission put forward a proposal on a particular matter. National Parliaments( if a minimum number agree) already have a right to petition to delay a piece of EU legislation, so why not give them a positive right to seek the promotion of a piece of legislation (if they can obtain a similar level of support across a number of countries).
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