Opinions & Ideas

Category: European Union Page 1 of 3

A FAILURE TO PROTECT THE INDEPENDENCE OF THE EUROPEAN COMMISSION

LACK OF FAIR PROCESS, OR OF RESPECT FOR THE EU TREATIES

I have always believed that the independence of members of the European Commission was a keystone of successful European integration.

 Commissioners are obliged by their oath of office to seek a European solution to problems, rather than just seek a balance between conflicting national interests.

 Since 1958, they have done so, and this is why European integration has succeeded, while efforts at integration on other continents have failed, under the weight of national egoism.

The larger the membership of the European Union became, the more important did the independence of Commissioners from national politics become.

Some believe the Commission is too large. From an efficiency point of view, they have a point. 

But Ireland, among others, has insisted that, despite this, each member state should have one of its nationals as a member of the Commission at all times. 

But if the “one Commissioner per member state” rule is to be kept in place, as the Union enlarges, Commissioners, from all states large and small, must demonstrate that they put the European interest first, and are not subject to the vagaries and passions of politics in their country of origin. 

In other words, European Commissioners must be independent, and be seen to be so. All member states must be seen to respect this.

This is why I am so deeply troubled by the attitude take by the Irish government, and then  by President Von Der Leyen of the European Commission, to calls for the EU Trade Commissioner Phil Hogan to resign.

 Both of them failed in their understanding of the European Union, and of one of its vital interests….. namely the  visible independence of members of the European Commission from the politics of any one EU state, large or small. 

I was genuinely shocked by what happened.

 Late in the evening of 22 August,  the leaders of the Irish Government called on the EU Trade Commissioner, Phil Hogan to “consider his position”. Those words mean resign.

 They piled on the pressure thereafter, with a further statement, on 23 August, containing a political determination that he had broken their Covid 19 rules. 

Phil Hogan did resign on 26 August.

 That was his decision and one he was entitled to make.

LESSONS FROM THIS PRECEDENT

But there are profound lessons to be learned by President Von der Leyen, and by the Commission as a whole , as to how, and to whom, Commissioners should be held accountable,  and a need to understand what this precedent means for the future political independence of Commissioners from their home governments.

 Separately, there are also questions to be asked about the internal management of, and the collegiality, of the Commission.

I will set out my concerns here, drawing on the words of the EU Treaty, which I helped draft as a member of the Convention on the Future of Europe.

On the 26 August, President Von der Leyen clearly withdrew any active support from Commissioner Hogan, and unquestioningly accepted the line of the Irish Government. This influenced him to resign his position.

 In this action, I contend that she did not fulfil all her responsibilities under the Treaties.

 I know she faced a genuine political difficulty. But the Treaties were framed do deal with fraught political situations, while preserving the independence of the Commission and due process.

 The Commission is guardian of the Treaties, and should be seen to defend the rules laid down in the Treaties in all circumstances, even when it is politically difficult. 

Article 245 of the Treaty requires member states to respect the independence of Commissioners. Ireland is bound by that article having ratified it in a referendum.

 One should note that Article 245 refers to respecting the independence of Commissioners individually, not just to the Commission as a whole.

 It is for the Irish government to say whether publicly demanding a Commissioner’s resignation, for an alleged breach of purely Irish rules, is compatible with the Irish government’s Treaty obligation under Article 245 to respect his independence, It had other options,

If any Commissioner is visiting a member state for any reason, he or she is subject to the laws of that state, on the same basis as any other citizen. A visiting Commissioner would not be above the law, but nor would she be below it either. 

If she breached the law, due process in the Courts ought to be applied, as to any citizen.

 This what would have happened if the visiting Commissioner was from any country other than Ireland and had had the difficulties which Phil Hogan had….due process would have been followed. 

 The statements of the Irish government, and the unsatisfactory explanations by Phil Hogan, did create political problems for the President of the Commission.

 She had to do something, but not necessarily what she did do.

 But there were options available to her which, inexplicably, she failed to use or even consider.

RULES IGNORED

 Commissioners are subject to a Code of Conduct, last updated in 2018. Under that Code,

 there is an ethics committee to determine if the Code has been breached. If the matter was urgent, there is provision for a time limit  to be set for a report by the Committee.

 But a reference to the Ethics Committee would have allowed for due process, and a calm and fair hearing. More importantly using this process would also have asserted the independence of the Commission as an institution.

 The Code says that it is to be applied “in good faith and with due consideration of the proportionality principle” and it allows for a reprimand. where the failing does not warrant asking the Commissioner to resign. 

Now, because of the course followed, we will never know if there was any breach at all of the Code at all by Phil Hogan. 

President Von der Leyen’s failure to use these mechanisms seems to be a serious failure to defend due process and proportionality, and to protect  the independence  of individual Commissioners, as she was required to do by the Treaty.

 The Commission and the Parliament should enquire into why she did not do so.  There are consequences now for the viability of the Code of Conduct, if it is not to be used in a case like this. 

CRITERIA NOT APPLIED

Was what Phil Hogan did a resigning matter anyway ?

Article 247 allows for only two grounds for asking a Commissioner to resign. There are that he or she is

“no longer being able to fulfil the conditions for the performance of his duties”

Or

” has been guilty of serious misconduct”.

I do not think either condition was met in this case.

Phil Hogan would have been fully capable of carrying out his duties while the Ethics Committee did its work. Instead his position is now effectively vacant.

Most people I have spoken to do not think the breaches committed by Phil Hogan, while foolish, amounted to “serious misconduct” within the meaning of Article 247.

 Failure to recollects all the details of a private visit over 2 weeks, or to issue a sufficient apology quickly enough, may be political failings, but they hardly  rise to the level of “serious misconduct”. Any deliberate and knowing breach of quarantine should have been dealt with in the Irish courts without fuss. 

 In any event, President von der Leyen would have been far wiser to have got an objective view on all these things from the Ethics Committee, before allowing Phil Hogan’s resignation.

WHY DID THE COMMISSION NOT MEET?

Another issue is the President’s failure to call a Commission meeting, if she was considering that a Commissioner should resign.

Under article 247 it is the Commission, not the President alone, who may compulsorily retire a Commissioner, and even then, they must have the approval of the European Court of Justice.  These safeguards were put in the Treaty to protect the independence of the Commission. They were ignored in this case.

The resultant weakening of the institutional independence of the Commission is very damaging to European integration and to the interests of smaller EU states. This should be of concern to the European Parliament.

WE NEED A FULL STRENGTH TEAM ON THE PITCH AS BREXIT REACHES THE ENDGAME

It is increasingly likely that, unless things change, on 1 January 2021,  we will have a no deal Brexit. The only agreement between the EU and the UK would then be the already ratified Withdrawal Agreement.

 There are only 50 working days left in which to make a broader agreement. The consequences of  a failure to do so  for Ireland will be as profound, and even as  long lasting, that those of Covid 19.

A failure to reach an EU/UK Agreement would mean a deep rift between the UK and Ireland.

 It would mean heightened tensions within Northern Ireland, disruptions to century’s old business relations, and a succession of high profile and prolonged court cases between the EU and the UK dragging on for years.

 Issues, on which agreement could easily have been settled in amicable give and take negotiations, will be used as hostages or for leverage on other issues. The economic and political damage would be incalculable.

We must do everything we can to avoid this.

Changing the EU Trade Commissioner in such circumstances would be dangerous.  Trying to change horses in mid stream is always difficult. But attempting to do so at the height of a flood, in high winds, would  be even more so.

The EU would lose an exceptionally competent Trade Commissioner when he was never more needed. An Irishman would no longer hold the Trade portfolio. The independence of the European commission, a vital ingredient in the EU’s success would have been compromised…a huge loss for all smaller EU states.

According to Michel Barnier, the EU/UK talks , which ended last week, seemed at times to be going “backwards rather than forwards”.

The impasse has been reached for three reasons.

THE MEANING OF SOVEREIGNTY

Firstly, the two sides have set themselves incompatible objectives.

The EU side wants a “wide ranging economic partnership” between the UK and the EU with ”a level playing field for open and fair competition”. The UK also agreed to this objective in the joint political declaration  made with the EU at the time of the Withdrawal Agreement.

Since it agreed to this, the UK has had a General Election, and it has changed its mind. Now it is insisting, in the uncompromising words of it chief negotiator, on

 “sovereign control over our laws, our borders, and our waters”.

This formula fails to take account of the fact that any Agreement the UK might make with the EU (or with anyone else) on standards for goods, services or food stuffs necessarily involves a diminution of sovereign control.

Even being in the World Trade Organisation (WTO) involves accepting its rulings which are a diminution of “sovereign control”. This is why Donald Trump does not like the WTO and is trying to undermine it.

The Withdrawal Agreement from the EU (WA), which the UK has already ratified,  also involves a diminution of sovereign control by Westminster over the laws that will apply in Northern Ireland (NI) and thus within the UK.

 The WA obliges the UK to apply EU laws on tariffs and standards to goods entering NI from Britain, ie. going from one part of the UK to another.

This obligation is one of the reasons given by a group of UK parliamentarians, including Ian Duncan Smith, David Trimble, Bill Cash, Owen Patterson and Sammy Wilson, for wanting the UK to withdraw from the Withdrawal Agreement, even though most of them voted for it last year!

Sovereignty is a metaphysical concept, not a practical policy.

Attempting to apply it literally would make structured, and predictable, international cooperation between states impossible. That is not understood by many in the UK Conservative Party.

THE METHOD OF NEGOTIATION

The second difficulty is one of negotiating method. The legal and political timetables do not gel.

The UK wants to discuss the legal texts of a possible Free Trade Agreement first, and leave the controversial issues, like level playing field competition and fisheries, over until the endgame in October.

The EU side wants serious engagement to start on these controversial issues straight away .

Any resolution of these controversial issues will require complex legal drafting, which cannot be left to the last minute. After all, these legal texts will have to be approved by The EU and UK Parliaments before the end of this year.

There can be no ambiguities or late night sloppy drafting.

The problem is that the UK negotiator cannot yet get instructions, on the compromises he might make , from Boris Johnson. Boris Johnson is preoccupied instead with Covid 19, and with keeping the likes of Ian Duncan Smith and Co. onside.  He is a last minute type of guy. 

TRADE RELATIONS WITH OTHER BLOCS

The Third difficulty is  that of making provision for with the Trade Agreements the UK wants to make in future with other countries like the US, Japan and New Zealand. Freedom to make such deals was presented to UK voters as one of the benefits of Brexit.

The underlying problem here is that the UK government has yet to make up its mind on whether it will continue with the EU’s strict precautionary policy on food safety, or adopt the  more permissive approach favoured by the US.

Similar policy choices will have to be made by the UK on chemicals, energy efficiency displays, and geographical indicators.

The more the UK diverges from existing EU standards on these issues, the more intrusive will have to be the controls on goods coming into  Northern Ireland from Britain, and the more acute will be the distress in Unionist circles in NI.

Issues that are uncontroversial in themselves will assume vast symbolic significance, and threaten the peace of our island.

The UK is likely be forced to make side deals with the US on issues like hormone treated beef, GMOs  and chlorinated chicken. The US questions the scientific basis for the existing EU restrictions, and has won a WTO case on beef on that basis.  It would probably win on chlorinated chicken too.

 If the UK conceded to the US on hormones and chlorination, this would create control problems at the border between the UK and the EU, wherever that border is in Ireland.

Either UK officials would enforce EU rules on hormones and chlorination on entry of beef or chicken to this island, or there would be a huge international court case.

All this shows that, in the absence of some sort of Partnership Agreement between the EU and the UK, relations could spiral out of control.

Ireland , and the EU, needs its best team on the pitch to ensure that this  does not happen!

GERMAN COURT SETS ITSELF ABOVE EUROPE

The Federal Constitutional Court (FCC) of Germany this week attacked one of the fundaments of the European Union, the primacy of Union law.  It is long settled practice that, in its field of operation, EU law has superiority over national law.

The FCC of Germany has also rejected the primacy of decisions of the European Court of Justice (ECJ), over decisions of national courts, on the meaning of EU Treaties.

The FCC has furthermore attacked the independence from the politics of any one country, of the European Central Bank.  It instructed the German Bundestag and  the German government to ensure that the ECB did a new analysis of its bond buying programme in light of the principles it laid down. Failing that, the ECB bond buying in question should not be applied in Germany, it said.

This is wrong. It is not the prerogative of any one EU country to instruct the ECB!

I remember how, at the Dublin EU Summit of 1996 which I chaired, Helmut Kohl defended the independence of the soon to be created European Central Bank. He did not want member states to be able to pressurize it to pursue loose monetary policies.

Now, A German Court wants a German government to interfere with the independence of the ECB, something that would have horrified Helmut Kohl.

The decision that  the German FCC announced this week was about the bond purchasing programme of the European Central Bank instituted by Mario Draghi to support the Euro in the wake of the 2008/10 economic crisis.  This bond buying programme was known as the PSPP.

The ECJ had found this PSPP programme to be legal under the EU Treaties, in a decision on 11 December 2018. The German Court this week flatly rejected this ECJ decision. It described it  as “untenable”.

It condemned it in the following terms;

“In its Judgment of 11 December 2018, the ECJ  held that the Decision of the ECB Governing Council on the PSPP and its subsequent amendments were still within the ambit of the ECB’s competences.

This view manifestly fails to give consideration to the importance and scope of the principle of proportionality (Art. 5(1) second sentence and Art. 5(4) TEU) – which applies to the division of competences between the European Union and the Member States – and is simply untenable from a methodological perspective given that it completely disregards the actual economic policy effects of the programme”

 The German Court added that the PSPP bond buying programme of the ECB is “ultra vires (beyond its powers) and not to be applied in Germany” and instructed the German authorities to this effect.

 It even criticised the methodology of the ECJ in reaching its decisions. A remark designed to annoy.

The EU can only work if its laws are interpreted consistently in all 27 EU member states. If a German Supreme Court can overrule the ECJ interpretation of the EU Treaties, so also could the Hungarian Supreme Court or the Polish Supreme Court.

 Soon we could  have 27 different interpretations of what EU law meant, and the EU Single Market would  quickly disappear!

The German Court did say that it was not making a decision about the more recent bond buying programme, introduced in the wake of the Covid 19 outbreak, and which is supporting countries like Italy and Spain, hardest hit by Covid 19.

 But the logic of the German FCC’s  decision this week clearly implies that it would also find against that programme too when, as is likely, the same German litigants bring a case against the new programme before the German courts.

A major showdown is now inevitable, at a time of maximum vulnerability for the European economy.

A robust answer must be given by the EU institutions to the German Court.

The Inter governmental Conference, including the then German government, that finalised the Lisbon Treaty in 2007 said, when it promulgated that Treaty ;

“In accordance with the well settled case law of the EU Court of Justice, the Treaties and the law adopted by the Union on the basis of the Treaties, have primacy over the laws of Member States, under the conditions laid down by the said case law”.

The European Heads of Government, including Angela Merkel, must urgently reaffirm that declaration, and declare their unequivocal support for the ECJ decision of December 2018, and for the independence of the ECB from the authorities of Germany, and from those of  any other EU state.

By undermining the ECJ, the German Court is providing a precedent that could be used by semi authoritarian governments in some EU states, who do not like some EU decisions on matters like the rule of law , academic freedom, or media pluralism.

To be fair, the doctrine underlying the German Basic Law is one which has democracy, and respect for democratic procedures, at its centre. The German Federal Constitutional Court has frequently defended the democratic prerogatives of the German Federal State.

 It has, however, failed adequately to recognise that the EU is a democracy too.

 It has an elected Parliament, to which the ECB accounts for itself.

 That is where German concerns should be pursued, by political means, and not by mischief making court cases, decided by judges who set themselves above the European Union.

EUROPE NEEDS A POLITICAL HEART TO SUSTAIN ITS ECONOMIC BODY

Next Thursday’s European Council is seen by some as crucial to the future of the European Union as a political project.

President Macron of France has raised the stakes saying that unless there is agreement on a fund of 400 billion euros to mitigate the effect of the lockdowns across the EU and the Eurozone, both the Euro and the EU itself will be in danger. He says that

 “If we can’t do this today, the populists will win, today, tomorrow and the day after in Italy, in Spain and perhaps in France”

He is right to issue the warning, but there is a real risk that this sort of rhetoric will create a self fulfilling prophecy. Expectations need to be managed and false dawns avoided. 

Some of the populist criticism of the EU is misdirected, and needs to be contradicted.

 In fact the EU, as such, has responded quite quickly to coronavirus. EU institutions, like the European Central Bank and the European Commission, have acted much more promptly in response to cononavirus crisis of 2020, than they did to the Banking crisis of 2008 and the sovereign Debt crisis of 2010. This is in spite of the  huge handicap of having to meet by teleconference.

A proposal for a Coronavirus Response Investment Initiative has already been approved by the European Parliament and the Council and is in force as of the 1st of April. This will allow the use of EUR 37 billion under cohesion policy to address the consequences of the COVID-19 crisis.

It is not the EU institutions, but the Ministers of some of the member states of the euro, who have been unable to make decisions.  They are the ones who were unable to decide on Eurobonds, or an acceptable substitute.  It has been Ministers of the member states, not officials of EU institutions who have made undeliverable demands of, and used unacceptable language about, one another. It is competing nationalisms that have failed us so far.

Indeed this failure of competing national narratives was predictable. CO2 does not respect national boundaries and nor do deadly viruses. They transcend national boundaries, so the response to them must transcend national boundaries too.

The opposition to mutualisation of debt in countries like Germany and Netherlands is almost theological.  Eurobonds are a good idea but they are just another form of borrowing. The interest may be a bit lower but it is still a debt. Eurobonds cannot be set up quickly, and speed is important. The bond buying by the ECB, which is already under way, has been much more effective. It has eased the financial pressure on Italy and Spain, and bought time for the EU to come up with a more comprehensive recovery programme.

 The key here is the Recovery Fund, which was agreed in principle by the Finance Ministers of the Eurogroup last week. This Fund is to be aimed at providing funding, through the EU budget, to programmes designed to kick-start the economy in line with European priorities and ensuring EU solidarity with the most affected member states. 

Such a fund would be temporary, targeted, and commensurate with the extraordinary costs of the current crisis, and would help spread them over time through appropriate financing.  

The Summit on Thursday next will need to decide on the legal and practical aspects of such a fund, including its relation to the EU budget, its sources of financing, and on innovative financial instruments, consistent with EU Treaties. This is a huge task because the EU budget at the moment is only 1% of EU GDP, and is already committed to other things(notably agriculture). 

One solution might be for EU to borrow additional money, on its own account on a long term basis, and that a new, but temporary, EU tax to be agreed to in principle to provide a reserve from which these loans could eventually be repaid. An EU wide carbon tax to fund this is one possibility.  Of course this would be difficult to accept, but extra borrowing that is not backed by pre agreed repayment capacity is difficult to accept too!

Meanwhile we must all realize that a breakup on the Euro would also destroy the European Single Market. That will happen unless voters in all EU states think as Europeans, not just as nationals of their own state. 

 Without the euro there would be competitive devaluations of national currencies, and these could lead to retaliatory trade restrictions, which would destroy the Single Market.

 Oddly enough, it is the countries that are most resistant to mutualising debt who benefit most from being in the EU Single Market.

 The German based Bethelsmann Foundation has said 

countries like Germany, France, Belgium, Netherlands and Denmark benefit more strongly than regions in the southern and eastern periphery of Europe

 from the EU Single Market. 

President Macron is right to say that the political legitimacy of the EU is being challenged. 

Why is this?

 The reasons are psychological as well as political.

 The voters of EU countries rarely get a chance think as Europeans. They are never asked to vote on purely EU issues, and are not confronted with realistic choices about what the EU might do, and what it might cost them.

 European Parliament elections are really national popularity contests about national attitudes. So the EU becomes remote. The EU is “someone else paying”. It is “them” rather than “we”. 

That has to change if the EU is to have the necessary strategic and political depth to deal with crises like the one we are now going through. 

If the EU is to survive as a political project, it needs  to create a European democratic constituency that complements the democratic constituencies to which national leaders appeal. The EU needs a political heart to sustain its economic body.

A Conference on the Future of Europe is to be set up to look at that in the next few months. The EU Heads of Government should send a signal that they intend to take the need for genuine EU wide democracy seriously. 

Rather than rely solely on the European Parliament, whose members are all elected in national contests, we need an EU wide electoral contest, if we are to create an EU wide identity and EU wide democratic legitimacy.  

One way to do this would be to have the President of the European Commission elected by the voters of the EU. This could be done either by using the Single Transferable Vote, with which we are familiar in Ireland, or by a two round system like the one used in French Presidential Elections. Voters identify with personalities as well as policy programmes and it is personalities who can create the emotional bonds between European citizens, that are needed to make European financial bonds politically viable. Another (weaker) proposal would be to elect some MEPs from an EU wide constituency.

Next week will indeed be crucial for the European Union. It needs to get the economics right, but itals needs to get the politics and the psychology right too. Leo Varadkar will have a vital role to play.

WHERE CAN THE EU FIND THE AMMUNITION TO FIGHT A CORONA VIRUS INDUCED ECONOMIC SLUMP?

The Covid 19 outbreak, and its deep financial aftermath, will put the European Union under unprecedented stress over the next five years or more. Brexit will add to these tensions for some members, notably Ireland. It is a matter of vital national interest for Ireland, that the EU gets its response to the crisis right, and does not allow it to create dangerous social distancing between the states of the EU.

A crunch point will be reached next Tuesday when EU Finance Ministers must make vital short and long term decisions.

 The existing structure of the EU is unfitted to a crisis like this. The public expect the EU to act, but has not been given the EU the powers it needs to do so. 

Unlike the states of the EU, the EU itself has no capacity to borrow money, and no capacity to raise taxation. So it  often lacks the financial clout to take decisive action.

 The amount it is allowed to spend is a mere 1% of GDP, whereas EU member states can and do spend around 40% of their GDP.

Membership  of the EU has been enlarged to include populations who have radically different understandings of the obligations and responsibilities of EU membership.

 Some think EU membership is compatible with authoritarian systems of governance.

 Others think EU membership is about entitlements, without commensurate responsibilities.

 Yet others see the EU as a means of creating a sphere of influence and projecting national power. 

Some (like the UK) see the EU as just a trading arrangement, with few political obligations at all.

 Many see membership of the EU as a transaction, from which they should always gain more than they were giving up.

 The countries and regions that gain most from the EU Single Market, are either unaware of the gains, or mistakenly think it is all due to their own efforts.

 A recent study by the Berthelsmann Foundation showed that the big objectors to Eurobonds (Germany , Austria and the Netherlands) gain almost three times as much per capita from the EU Single Market as do the assumed beneficiaries of the Eurobonds, Spain and Italy!

 If the Single Market were to fail, the objectors would lose the most. But their national politicians fail to tell them this. Incidentally the study showed Ireland to be a big gainer from the Single Market.

Meanwhile the countries and regions that gain comparatively less from the Single Market resent this, and fail to acknowledge that they too are gaining from being in the EU Single Market, albeit a bit less than the others are gaining. Envy blinds some to reality.

Of course, these contradictory feelings are rarely expressed publicly, but they there under the surface, ready to emerge when a crisis happens and decisions have to be made quickly. 

Covid 19 has been such a crisis.

 The first reactions of some EU members were revealing, and deeply troubling.

On 4 March, France and Germany decided to block export of personal protecting equipment outside their own borders, even within the EU. This was done notwithstanding the fact that restrictions on export to other EU states are forbidden by Article 35 of the EU Treaty.

 Two days later, Italy requested an extraordinary meeting of EU health Ministers. This was declined, notwithstanding the fact that the health crisis was worse in Italy than elsewhere, and Italy (like Greece) had already borne the brunt of the refugee crisis, with little or no help from its EU partners.

 It took several days of pressure before the export bans were lifted, and 1 million German masks eventually did reach Italy. Meanwhile China scored a public relations coup by getting equipment to Italy, equipment that Italy’s EU partners had failed to supply. 

The Institute Montaigne, a French think tank said this episode will leave “deep scars” in Italy’s relationship with its EU partners north of the Alps.

The restrictions on economic activity, as well as the direct health and income support costs, arising from Covid 19 will dramatically increase the debts of all states in the EU. 

Assuming a 20% drop in GDP as a result of Covid 19, an economist in the Bruegel Institute in Brussels  has estimated that the Debt / GDP ratio of Italy could rise from 136% of GDP to 189%, that of France from 99% to 147%, that of Spain from 97% to  139%, and that of Germany from 59% to 94%. 

 As all these countries can expect their workforces reduce in the next 20 years, because of past low birth rates, this is a very troubling prospect. A way needs to be found to spread the  debt as widely as possible and as far as possible into the future.

One of the proposals made to do this is Eurobonds which would enable counties to borrow with a guarantee from all eurozone states. The interest rate might be lower but it is still just another form of borrowing. If Italy issued a Eurobond, it would still be increasing its overall debt, and might face a higher interest rate on its ordinary bond issues. Another objection is that it might take 18 months or more to get these Eurobonds up and running, and the markets need something quicker.

Another proposal is that distressed countries borrow from the European Stability Mechanism (ESM). Some believe that the ESM is too small for all that needs to be done. Others worry about the conditions that might be imposed.

Meanwhile the ECB continues to buy the bonds of member states. For example it owns 26% of all German government bonds and 22% of all Spain’s bonds. This bond buying by the ECB enables governments to continue borrowing, but its support is confined to members who are in the euro. It is using monetary policy to achieve the goals of fiscal policy, which is controversial.

I suggest a better solution would  be to allow the European Union itself to borrow, up to a limit of (say) 0.5% of the EU GDP, to spend exclusively on Covid 19 related expenditures. 

Article 122 of the Treaty already makes provision for the EU to give aid  to help states suffering from “natural disasters and exceptional occurrences” beyond the control of a member state or states. Covid 19 meets this criterion.

 But the EU is not using this power, because its budget is fully committed to other things. It has no room to respond to sudden emergencies.  It would have such room if it was allowed to borrow. This power could then be activated to allow direct transfers of funds to a state in acute distress because of Covid 19 or the like, without adding to the recipient state’s debt.

Doing this would require an amendment to Article 310 (1) of the Treaty. This article presently requires the EU always to run a balanced budget. This could be amended to allow borrowing  that was confined to spending on matters, like Covid 19, that had arisen suddenly and were beyond the control of the state looking for help. Such a limited borrowing authority would command a lot of support from the electorate.

It would also be borrowing under the democratic control by the Council of Ministers and  European Parliament, something that does not apply to bond buying by the ECB.

The EU faces is an unprecedented situation which justifies unprecedented actions.

DO TORY LEADERSHIP CONTENDERS UNDERSTAND WHY THERE IS AN IRISH BACKSTOP?

The Backstop is not just about the border. It is not a technical matter. It is not just about what happens at 200 crossing points.

It is about the people of Northern Ireland, and giving all of them (not just a majority) the freedom to be who they are, and a sense of belonging.

But the present debate in the UK Conservative Party about replacing the backstop, seems to assume that it is all about technical fixes and invisible border posts , and that some yet to be discovered combination of IT and lasers would remove the need for physical customs posts, and that would then solve the entire problem. That is a mistake.

The backstop is about far more than this.  It is a recognition of the fact that, in Northern Ireland there is a population some of whom feet they have exclusively British identity and allegiance, some of whom feel they have an exclusively Irish identity and allegiance, and some of whom combine these allegiances comfortably enough.

The backstop is a recognition of this fundamental divide, which has led to so much suffering in the past, and an attempt to sustain the arrangements that ended that suffering.

The Belfast Agreement of 1998 transcended these divisions through provisions for intense North/ South and East/West cooperation, that would allow all three groups, described above, to feel fully at home in Northern Ireland under any present, or future , constitutional arrangements.

This was easy to envisage as long as both parts of Ireland remained in the EU, because EU rules facilitated and underpinned free and easy cooperation both North/South and East/West.

In such a context, territorial “sovereignty” became less of an issue, because it was overlaid by structures of free cooperation enshrined in EU law.

Brexit changes all that in a radical way. It brings territorial sovereignty back into the centre of stage in a way that threatens the Belfast Agreement settlement in a deeply fundamental way. I believe that Theresa May came to understand this, and that that explains her acceptance of the backstop.

Most of those contending to take her place in the Conservative Party leadership do not seem to do so.

In the agreement of March 2019, the EU side has given the UK very strong assurance of its good faith in seeking to find an alternative to the backstop.

But that will only work if the UK side really understand why the backstop was put there in the first place.

I do not believe that the contenders for Conservative Party leadership have taken this on board.

GIVING THE PEOPLE A DIRECT SAY IN WHO IS PRESIDENT OF THE EUROPEAN COMMISSION

Who will be the next President of the European Commission?

This is a decision that could set the European Council of heads of government on a collision course with the recently elected European Parliament and set France on a collision course with Germany. The present system is flawed in that it only gives voters an indirect, rather than a direct, say in who is Commission President, and is not truly representative in that it rewards only the biggest party.

Article 17 of the European Union Treaty says

“Taking account of the elections to the European Parliament, and after having held the appropriate consultations, the European Council shall propose to the Parliament a candidate for President of the Commission”.

It goes on to say that the nominee must then obtain a majority in the European Parliament, and if he or she does not, the European Council must then, within a month, propose a new name.

In 2014, and again in the recent European Parliament elections, the Parliament decided to go further.

It endorsed a process whereby the major parties would nominate a “lead candidate”, who would then be supported as President of the Commission.

In a sense this preempted to role of the European Council in picking the nominee.

In 2014 Jean Claude Juncker was the nominee of the EPP and, when the EPP emerged as the biggest single party (219 out of 751), he was nominated. Only Hungary and the UK opposed him in the European Council. He was then elected by a majority vote in the Parliament.

This “lead candidate” system was devised, so as to allow each voter to have a say, through their choice of party in the European Election, in who would be President of the Commission. It was a form of indirect democracy.

For the 2019 election the same process was followed.

The EPP proposed Manfred Weber as their nominee for President of the Commission.

The Social Democrats nominated Frans Timmermans .

The Greens nominated Ska Keller.

The Liberals, who do not like the lead candidate process, group put forward a “team” of candidates including Guy Verhofstadt and Margarete Verstager.

Weber won last week, in the sense that his group has most MEPs (180). So he has a good case to be the nominee. But 180 is even further from an overall majority of the 751 member Parliament  than Jean Claude Juncker was with 219 MEPs in 2014.

A system which says the party with the most MEPs shall have its nominee as President of the Commission  has the deficiencies of the British straight vote, it is a “winner take all” electoral system.

Second preferences do not count.  All one needs to be is the biggest party, to claim the job.  Like the British electoral system that is polarizing by its nature.

Some argue that the lead candidate system also upsets the balance of power between the Parliament and European Council, in that it purports to tie the hands of the European Council on who it may nominate, and also it politicizes the Commission unduly.

Under the Treaty, the Council must “take account” of the results of the results of the European Election in choosing its nominee, but the lead candidate system in not in the Treaty. It does not oblige the Council  to pick the nominee of the biggest party.

On the other hand, credibility will be at stake if the Council now rejects Manfred Weber.

The Council cannot simply ignore the fact that the election was fought on the basis of the lead candidate system, and many voters were genuinely led to believe that, in voting for a particular party, they were also voting for that party’s nominee for President of the Commission.  

Presidential debates took place between the lead candidates, on the assumption that one of them would become President of the Commission.

To replace that open, if flawed, system with a  backroom deal to put forward someone whose name was not before the electorate  at all would be a hard sell, no matter how well qualified the new nominee might be.

And that alternative nominee would still have to win a majority in Parliament, to be elected. The outgoing European Parliament, in a formal resolution, said the Parliament would be “ready to reject” a nominee who had not been a lead candidate.

So the European Council would be taking a big risk if, at this stage, it decides to reject the lead candidate system.

There is a wider argument.

Despite the improved voter turnout, many EU citizens still feel EU decision-making is remote.  

The European Council would need to come up with something much better if it decides to go against the lead candidate method of selecting the Commission President.

In 2001, the EU heads of government asked the Convention on the Future of Europe (of which I was a member), to look at new ways to create a “Europe-wide democratic public opinion” when it drew up a new EU Treaty.

The heads of government specifically asked the Convention to consider the direct election of Europe’s Commission President, not by the Parliament,  but by the voters of Europe themselves.

They also asked  the Convention to consider whether some MEPs should be elected in Europe-wide, rather than in national, constituencies.  This would have given voters an opportunity to vote on European policies, rather than just on the national ones, that tend to predominate in European elections at present.

I regret to say neither of these proposals got serious consideration by the Convention.

I argued strongly there for the direct election by the people of the President of the Commission, on the same day, but on a different ballot paper, to MEPs.  Separating the two votes would preserve the vital separation of powers between Parliament, Commission ,and the Council

The proposal failed to get support because many members of the Convention felt that a  President of the Commission, directly elected by the people, would be politically too powerful, even if his or her legal prerogatives were no more than those of the existing Commission President.

The other idea,  that of electing some of the MEPs on a Europe wide list did not get support either, chiefly because some of the existing MEP seats  would have had to be given over to the Europe wide list, and some existing MEPs might have lost out.

The looming impasse over the Commission Presidency shows we need to devise a better system.

I believe the best solution would be to have the President of the Commission directly elected by the people of the EU, under a proportional representation system with a single transferable vote (PR.STV). It is a simple system, once you get the hang of it.

It is used in by elections in Ireland. It was considered as the replacement for the present UK system, in a referendum in the UK during the Tory/ Lib Dem coalition, but unfortunately rejected. If it had been accepted Brexit might never have happened.

Under PR.STV, people’s second and third preferences are taken into account, if their first choice does not win. The importance of second preferences encourages candidates to appeal to as broad an electorate as possible. This reduces the sort of destructive polarization we now see in UK and US politics.

But the system involves several counts after the elimination of lower candidates. To introduce PR.STV for EU Presidential Elections would need the introduction of a standardized  electronic system for the casting and counting of votes all over the EU, which would require a substantial investment.

But I believe it would be the best, and fairest, way forward for European democracy.

WHY THE EU HAS DIFFICULTIES WITH THE CHEQUERS PROPOSALS

The Chequers proposals of the UK Government were a genuine, if belated, attempt to reconcile the expectations of the British people with EU realities.

But they ran into difficulty for the following reasons. If Chequers remained an opening negotiating position, it might have started a useful conversation.

  1. But , under the pressure of domestic UK politics,  Prime Minister May soon made it a “red line” position, and thus no longer negotiable.
  2. From an EU perspective, Chequers was problematic because it would have meant the EU giving up control of its trade borders, and subcontracting that to a non member, the UK. It would have provided for a common rule book for the quality of goods circulating, via the UK, into the EU Single Market, but the UK Parliament would still have retained the option of not passing some of the relevant legislation to give effect to this rulebook. Furthermore, it would not have been bound to accept the ECJ’s interpretation of what the common rules meant.
  3. It would have meant the UK opting into some bits of the EU Single Market, but not all, and that precedent would have created immediate demands for exceptions from other EU members and also from Switzerland and Norway.

It does not require much political imagination to see that these aspects of the UK proposal were going to be a hard sell in the parliaments of some of the 27 countries. And if just one of them said NO to an eventual EU/UK trade deal, there would be no deal. Each has a veto.

GOVE THEN UNDERMINED THE CHEQUERS LINE

To make matters worse, a collectively responsible member of the UK Cabinet, Michael Gove  suggested that the UK might agree a Withdrawal Treaty on the basis of the Chequers approach, but later, once out to the EU, abandon it, and do whatever it liked. This would put Mrs May in a position of negotiating with the EU in bad faith. It also raised doubts that, even if the EU side accepted Chequers, the UK government could not carry it through.

DOUBTS  RAISED ABOUT THE IRISH BORDER COMITTMENTS

Gove’s intervention also cast doubt the genuineness of commitments the UK had given on the Irish border.

In a Joint Report of 8 December 2017, the UK agreed to respect Ireland’s place in the EU and all that entailed, and that there would be no hard border in Ireland. This was to apply

“in all circumstances, irrespective of any future agreement between the EU and the UK”.

When the UK declined to translate this commitment into legal language for the Withdrawal Treaty, the EU side began to wonder if the UK wanted to delay dealing with Irish border problem until the last minute, hoping to table a proposal on a “take it or leave it” basis, and that the EU would not then jeopardize the whole deal over a place as small as Ireland!

Unsurprisingly, this shifting UK approach was not accepted by the UK’s EU partners, when they met in Salzburg.

The UK should not have felt “humiliated” by this. The EU is a complex institution, with 27 different countries.

ANY DEAL WILL HAVE TO APPROVED BY 27 PARLIAMENTS

As I said the parliaments of all 27 of them will have to ratify any eventual trade deal the UK. Let us not forget that EU found it hard to ratify its trade deals with Canada and Ukraine, because of objections in Wallonia and Netherlands respectively.

But before starting to negotiate a trade deal, the UK must first agree the terms of its withdrawal from the EU.

The Irish border question is central to this.

THE HARDER THE BREXIT, THE HARDER THE BORDER

The harder the UK Brexit, the harder will be the resolution of Irish border problem.

The further the UK negotiating demand goes from continued membership of the EU, the harder it will be for it to fulfill the commitments it has given on the Irish border.

If the UK decided to leave the EU, but to stay in the Customs Union, the Irish border questions would have been minimized.  But the UK has decided to reject that, because it hopes to be able to make better trade deals with non EU countries than the one it already enjoys as an EU member.

The UK has also rejected joining the European Economic Area (the Norway option), which would also have minimized the Irish border problems, because it would mean continued free movement of people from the EU into the UK .

In each decision, Ireland was given a lower priority than the supposed benefits of hoped for trade agreement with faraway places, and of curbing EU immigration.  This was short sighted.

Future trade agreements that might be made with countries outside the EU are neither as immediate, nor as beneficial to the UK, as maintaining peace and good relations in the island of Ireland, or as  the 70 or more trade agreement the UK already enjoys as an EU member, which it will lose when it leaves.

EU immigration to the UK, if it ever was a problem, is a purely temporary and finite one.

Already the economies of central European EU countries are picking up, and, as time goes by, there will be fewer and fewer people from those countries wanting to emigrate to the UK to find work.  These countries have low birth rates and ageing populations, so there is a diminishing pool of potential emigrants.

Again, I believe that solving this, largely imaginary, EU immigration “problem” is less important to the UK, in the long run, than peace and good relations in and with Ireland .

If, as is now suggested, the UK moves away from Chequers, and looks instead for a Canada style deal with the EU, the Irish border problem will become even worse. Mrs May has recognized this and this is why she rejects a Canada style deal..

A Canada style deal would mean the collection of heavy tariffs on food products, either on the Irish Sea, or on the Irish border. Collecting them on the 200 mile long land border would be physically impracticable, so the only option would be to do it on the Irish Sea.

Either way, the all Ireland economy, to which the UK committed itself in the Joint Report, would be irrevocably damaged. The economic foundation of the Belfast Agreement would be destroyed.

CONSERVING WHAT WE HAVE SHOULD BE THE GOAL OF A CONSERVATIVE PARTY

It is time for the Conservative Party to live up to its name, to be truly conservative, and conserve the peace we have so successfully built on the twin foundations of the Belfast Agreement and the EU Treaties, to which the UK committed itself in 1998 in the case of the Belfast Agreement,  and in 1973 in the case of the EU Treaties.

IMMIGRATION FROM AFRICA IS INEVITABLE….

EUROPE’S CHOICE IS WHETHER THIS IS TO BE PLANNED AND LEGAL, OR ILLEGAL AND DISORDERLY.

It is not immigration, but the political exploitation of immigration, that threatens border free movement within the EU.

Closing down legal migration routes has led to the opening up of illegal routes.

In 2010, 130,000 first time visas were issued to citizens of African countries by EU countries. By 2016, only a mere 30,000 visas were issued.

So denial of a legal immigration route is one contributor to illegal immigration.

African agriculture suffers disproportionately from climate change, but the human contribution to climate change comes disproportionately from the Northern Hemisphere, including from Europe.

Public opinion in some European countries is getting into a panic about immigration from outside Europe, yet these very countries are often the ones that have the least immigration.

A survey of public opinion, in 2016, found that the most negative opinions about immigration were to be found in Hungary, Slovakia, Latvia, Estonia and Romania (all countries with little enough non EU immigration).

The most welcoming attitude to immigration, at that time, was to be found in Sweden, Germany and the Netherlands (who all already have substantial numbers of non EU immigrants).

European countries have a legal obligation to provide a refuge for people who are fleeing in fear of their lives from wars. Europe has provided some shelter for refugees, but Turkey has 3 million refugees in its borders, Lebanon 1 million, and Uganda 1 million. No EU country is shouldering that sort of burden.

Europeans need to look at immigration in a different way.

Because we have decided, over the past  40 or more years, to have fewer children, Europeans will need immigration in future to maintain a proper balance between numbers at work, and numbers in retirement, unless those in retirement are to live a desolate old age thirty years from now.

In a few years time, people of working age will be in short supply.

Globally, the ratio of working age to retired, will fall from 8 to 1 today, to 4 to 1 by 2050. By 2050, the global population aged 65 or over will increase from 600 million to 2.1 billion.

This will create a huge funding crisis for governments, who will not be collecting enough tax from the diminished number of people of working and taxpaying age, to meet the promises it has made, of pensions and health care, to the increasing number who have already retired and no longer earners and taxpayers.

Opposition is principle to the arrival of young immigrants from Africa is short sighted.

This is because the working age population of most EU countries is set to decline, while its post retirement population is set to increase rapidly. Without immigration of people of working age, Europe’s diminished working age population, will imply relatively poorer health care and pensions for its ever growing retired population.

Africa has an abundant supply of what will soon be one of the world’s scarcest resources, young people.

Europe has a birth rate of 1.63 children per family. Iran and China have similarly low birth rates and the US rate is only slightly higher.

In contrast, the birth rate in Nigeria is 5.42, in Mali 5.92 and Niger 7.15.

Nigeria’s population has risen from 45 million, when it became independent in 1960, to 187 million today. By 2050 Nigeria’s population could reach 410 million. The present Nigerian economy is just not capable of finding employment for all these people.

The EU needs to work on a policy that encourages orderly and well prepared immigration from Africa, accompanied by well considered plans to integrate the immigrants into European society.

As much as possible of the preparation for European living should be done before would be emigrants leave their home countries. If Europe opens up legal routes for immigration, illegal routes will become less attractive.

Europe must develop an investment partnership with Africa.

As the European Council said last week;

“  We need to take the extent and the equality of our cooperation with Africa to a new level. This will not only require increased development funding but also steps towards creating a new framework enabling a substantial increase of private investment from both Africans and Europeans. Particular focus should be laid on education, health, infrastructure, innovation, good governance and women’s empowerment.”

 

Bruton calls for Brexit negotiating extension

John Bruton, Speaking to RTÉ’s Morning Ireland today.

Former taoiseach John Bruton has called for the two-year Brexit negotiating period to be extended.

Mr Bruton, who is also a former EU Ambassador to the United States, said the time limit is too short and any agreement reached will have to be ratified by the UK and EU parliaments, which also takes a lot of time.

Speaking to RTÉ’s Morning Ireland, Mr Bruton said that pressure for negotiations is too great and that mistakes are inevitably made, when insufficient time is given to negotiations.

Mr Bruton added that the time pressure is adding to a “fevered atmosphere” in British politics, with just over a year left before the negotiating period ends in March 2019.

He warned that Ireland would suffer as much as the UK, if the right deal was not reached.

Mr Bruton said there is a provision for the extension of the two-year negotiating period in Article 50.

He said that there are some downsides to the idea of extending the period and it would have to be reached unanimously.

However, he said the possibility of extending the period would allow for more rational discussion and a better outcome.

 

 

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