John Bruton

Opinions & Ideas

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MARY QUEEN OF SCOTS ……A STORY THAT ILLUMINATES PRESENT DAY POLITICS

I bought Antonia Frasers biography of Mary Queen of Scots, in a second hand bookshop in Paris, a few years ago, and eventually got around to reading its 667 pages over the Christmas period.

It  is a riveting personal story of a woman who became Queen of Scotland  as an infant,  and  who spent her childhood and teenage years in France, where  she  married the King .

Then, after the King of France had died, and she was still only 19 years old, she returned to Scotland in 1561 to take up her responsibility as monarch of her native country.

Politics was different then.

In Scotland, much the real power rested with the nobility, who controlled the land and its revenues, and who could, and did, dictate to the monarch. Parliaments were often no more than a vehicle for the power of the landed nobility.

Religion added a new source of contention, especially if the monarch and her subjects had different religious beliefs. Mary was a convinced Catholic, while the majority of her subjects had recently become Protestant followers of Calvin and Knox…Presbyterians.

She did not attempt to force her Catholic religious views on her subjects, in stark contrast to the policy followed in England by the monarchs of that country, both Protestant and Catholic.

In Scotland the drive for religious conformity came from the bottom up.iin England, it came from the top down.

Mary also had a claim on the English throne, through her grandmother, Margaret Tudor, a sister of Henry XIII.

So when all  Henry VIII’s offspring had no children, Mary would have been the uncontested  heir to the English throne too, after the death of Queen Elizabeth I.

In fact, she could even claim precedence over Elizabeth, because , in Catholic eyes, Elizabeth was illegitimate, because her mother, Anne Boleyn’s marriage to Henry VIII took place, while his first wife, Catherine, was still alive. As we know, the Pope did not agree to annul Henry’s marriage to Catherine.

Interestingly Mary’s own grandmother, Margaret Tudor, a staunch Catholic, had had an annulment of her marriage to her second husband, the Earl of Angus.

Mary herself had numerous half brothers and sisters, because her father had had active relations with women, other than Mary’s mother.

So Mary’s person, and her choice of husband (she had three), became an instrument in the  politics of Europe, and in the struggle for predominance between France, Spain and England, and between Catholicism and Protestantism.

Although she was a charming intelligent and generally cautious ruler, the forces with which she had to contend eventually became far too great for her.

She was forced to abdicate in 1567, attempted to regain the throne by force, and was defeated. She had to quit Scotland, leaving her infant son,  James, who was eventually to become King of both England and Scotland, behind, never to see him again. She was only 25.

But, instead of fleeing to France where she would have been well received and had many powerful relatives, she fled to England. This was a fatal and foolish mistake.

In England, she became an acute embarrassment to her host, Queen Elizabeth, who feared , with reason, that, as a legitimate claimant to the English throne, Mary would provide a rallying point for English Catholics and their continental allies, who wanted to dethrone Elizabeth, and restore the Catholic faith.

Eventually, after twenty years imprisonment, Elizabeth had Mary executed in 1587, when she was still only 44 years of age.

This tragic story brings out the deep historical, political and religious differences between Scotland and England. It exposes the roots of the suspicion between England and the continent, a suspicion that is not prevalent in Scotland. States were much weaker then than they are today.

It reminds the reader how different were the priorities of political actors 500 years ago. Heredity and religion were much more important than trade and economics. Only the pursuit of power is a constant.

 

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DERMOT GALLAGHER   RIP

I wish to express a deep sense of loss on hearing of the death of former Ambassador, Dermot Gallagher, who I consider to have been a great friend and neighbour, as well as a brilliant servant of Ireland.

Dermot was Irish Ambassador in the United States during my time as Taoiseach.

On my first arrival in Washington as Taoiseach in March 1995, I was immediately struck by the depth of the links all over the United States, but particularly in policy making circles in Washington, that Dermot, and indeed his wife Maeve, had built up on behalf of Ireland.

These links extended right across both US political parties, and across all three branches of the US government.  This influence on behalf of Ireland was the result of immensely hard work and patience on Dermot’s part. He was instrumental in securing US support for the process of peace building in Ireland, and notably in securing the services of Senator George Mitchell.

He was a model Ambassador. He provided very valuable advice to me when it was my honour to fill a similar role subsequently.

Finola joins me in extending heartfelt sympathy to Maeve and his grieving family

Statement by John Bruton, former Taoiseach

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DIANA MOSLEY AND MARGOT ASQUITH

During 2016, I read and enjoyed two books by the British biographer, Anne De Courcy.

One was a life of Diana Mosley, the wife of the British Fascist leader Oswald Mosley. Diana was one of the well known Mitford sisters, one of whom, Nancy, became a noted author and another, Unity, became a noted devotee of Adolf Hitler. Oswald Mosley, who married their sister Diana, emerges from the book as an extremely egotistical man.

Diana left her first husband, Bryan Guinness, one of the brewing  family, to live with and marry Mosley. Diana met the already married Oswald Mosley in 1932, when he was already a well known politician, but also a notorious philanderer. He had all the glamour, daring, and vitality her husband lacked

Bryan Guinness had liked a quiet domestic life, whereas his wife preferred a busy, intellectually stimulating, social life. Mosley provided  that in abundance.

 Diana and Mosley remained together through  his tempestuous political career in the 1930’s when he tried to turn Britain to Fascism. She also stayed with him during their internment during the Second War,  his failed attempt to launch a new Fascist Party after the War, and  their eventual voluntary exile in France. In her eyes, he could do no wrong.

The books throws light on the appeal of Fascism to well educated and aristocratic people in Britain during the 1930’s, and, in this, it helps us understand the appeal of authoritarian nationalism in our own times.

The other book, entitled “Margot at War, Love and Betrayal in Downing Street , 1912-1916” is an account of the life of the wife of the then Prime Minister, HH Asquith. It gives a  very good account of life in 10 Downing Street during the early part of  First World War.

As a devoted wife, Margot had to cope with the fact that Asquith, at this time, had become totally infatuated with Venetia Stanley, a friend of one of his daughters by his first marriage.  His obsession with Venetia  became well known to his political colleagues, and was a source of mortification and humiliation for his wife. It also undermined his authority as Prime Minister.

As de Courcy puts it, Asquith’s colleagues saw him

“bland, well fed, calm, scribbling letter after letter to Venetia  in the Cabinet  Room ,as vital questions of war were being debated,  and men were dying in their thousands”

This self indulgence contributed to the undermining, and  to the eventual replacement, of  Asquith as Prime Minister,  by his  Liberal Party colleague, David Lloyd George. This coup created a split that led to the virtual disappearance of the once dominant Liberal Party in the next twenty years.

Both books give a well written account of the historical background of the times, during which these two personal stories evolved, and are interesting for that alone.

Political power in Britain, in both eras, was exercised within a small aristocratic or intellectual circle. The characters entertained one another, frequently and lavishly, even when there were shortages.

Both Diana Mosley and Margot Asquith used their social contacts to advance their husband’s careers.  Thankfully, Margot Asquith had the greater success.

 

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WILL THE 1998 BELFAST AGREEMENT SURVIVE THE  UK GENERAL ELECTION OF 2020?

The Daily Telegraph today says that the UK Prime Minister intends to include in the 2020 Conservative Party General Election Manifesto a promise to pull the UK, including presumably Northern Ireland, out of the European Convention on Human Rights (ECHR).

According to the story, she does not intend to implement this promise until after the UK has left the EU, which she hopes to have achieved before the 2020 Election.

The existing corpus of ECHR law would apparently be incorporated into UK law, but there would no longer be a right of appeal to the European Court on Human Rights, only to the UK Supreme Court.

If implemented, this promise would appear to me to breach the terms of the Belfast Agreement of 1998, which is an international Agreement. On the strength of this international Agreement, Ireland amended its constitution. The Agreement was the fruit of years of work by successive Taoisigh and Prime Ministers.

There is no mention of the inter relationship of the ECHR and the Belfast Agreement, or of any negotiation on it with the parties to the Belfast Agreement, anywhere in the Daily Telegraph article. Yet the  appears to be the result of a very detailed briefing. A purely unilateral UK action seems to be what is envisaged, without reference to the parties, including Ireland.

Adherence to the European Convention by the Northern Ireland Administration, and therefore by the UK unless Northern Ireland’s status changes,  is built explicitly into the terms of the Belfast Agreement.

Paragraphs 5(b) and 5(c) of Strand One of the Agreement require all legislation passed by the Northern Ireland Assembly to adhere to the terms of the ECHR.

There are other references to the ECHR in other parts of the Agreement.

The ECHR is fundamental to all the human rights elements of the Belfast Agreement.

If the UK is no longer a party to ECHR, and no longer subject to the rulings on the European Court on Human Rights, there will no longer be any common basis, between Ireland and the UK, for settling any differences of interpretation that might arise between Ireland and the UK concerning human rights issues in Northern Ireland.

It is important to the sustainability of any international agreement, in this case one between Ireland and the UK, that there be a neutral referee in the case of disputes.

This neutral element was particularly important to nationalist opinion at the time of the finalisation of Agreement, and the referenda which approved it. It remains so to this day.

As far as any disputes might arise about human rights in Northern Ireland, that neutral referee is the European Court of Human Rights. But the UK Prime Minister now apparently intends unilaterally to withdraw Northern Ireland from the ECHR and its court.

I believe this is a very serious issue, and bodes ill for the future.

As a former Home Secretary, the current UK Prime Minister should be aware of the constitutional importance of the Belfast Agreement, and indeed of the referendums approving it, in both parts of Ireland, which ended an historic dispute, dating back a very long time indeed.

We can only ensure that we do not “return to the border of the past” if there is an appreciation at the highest level that party driven initiatives do not undermine hard won negotiated achievements.

 

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THE STRUGGLE FOR THE CENTRE OF THE WORLD

As Russia and Turkey broker a Syrian ceasefire without the involvement of the United Nations or the United States, some are wondering if the axis of  influence  in the world is shifting from the Atlantic to the centre of Asia.

Like many others, I enjoyed reading the best seller,   “The Silk Roads, a New History of the World”, by Peter Frankopan.

The period  the book covers runs from the time of the Babylonian Empire right up to the present day.

The area it covers is everywhere between Ireland and Vladivostok, and between the Indian and Arctic Oceans.

The centre of that world is somewhere near the Caspian Sea. The constant theme, through the whole time, is a struggle within this huge area, for resources, and for  the  means of contact with the outside world.

The rivalry between the Roman and Persian Empires is described.

So is the  rise of Islam, and the  claim is made that Islam succeeded partly because it  provided Arabs with a unifying identity, in places of the rival religions and heresies that predated it.

The claim is made that Jews in Palestine initially welcomed Muslim rule. Indeed it is noteworthy that, 700 years later, Jews, fleeing Christian Spain found refuge in then, Muslim ruled, Greece.

The role of Genghis Khan is described and it is claimed that, after the initial disruption, Mongol dominance gave relative stability to Central Asia.  The Mongols did not come all the way to Western Europe because they found much richer lands to conquer in India and China.

Russia’s constant  fear of being encircled, or hemmed in, within the Eurasian landmass is also examined. After its defeat in the Crimean War in 1856, peace terms were imposed on Russia, by the victorious British, French and Turks, which closed the Black Sea to the Russian Navy. This was despite the fact that the Black Sea was the exit route for a third of Russia’s exports. This remained a huge grievance for the Russian leadership, and a similar feeling of being hemmed in lies behind Russian tactics today, in respect of Crimea and Syria.

Hitler, who remembered the starvation in Germany during the First World War, was determined, as one of his war aims, to seize the grain growing regions of Ukraine and Southern Russia. His plans in this respect were well signalled in his book Mein Kampf, which he wrote in the 1920’s and which Stalin had read.  But Stalin did not draw the logical conclusion and was caught off guard, when Hitler attacked the Soviet Union in 1941.

The thesis of this book is that world politics rotates around the struggles for control of resources of food, energy, and minerals on the Eurasian land mass.

This is in contrast to a view that would see the Atlantic as the axis of political and economic power.

From the very beginning of this story, peoples in Eurasia were changing sides, finding new allies, and adopting different religions. Inconsistency was the one constant among the players of this great game.

For example, in view of the present   obsession in the United States and Israel with the possibility that Iran might have nuclear capacity, we are reminded that, in 1974, President Ford agreed to sell American nuclear reprocessing technology to Iran. That was in the time of the Shah, who was overthrown five years later, but the geostrategic risk of proliferation inherent in selling such a technology to Iran under any regime was the same then as it is now.

Interestingly President Ford’s Chief of Staff at the time was Richard Chaney!

As we move towards an more uncertain world, reading this book will help one to be a little less surprised by what happens, because one will learn that something rather like it will have happened before.

 

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NATIONALISM AND PERIPHERALITY…..TWO PROSPECTIVE LEGACIES OF BREXIT

bonnetThis long article by Andrew Duff, a former MEP, draws on the recent House of Lords reports on the subject, to illustrate how complicated the Brexit negotiations must inevitably become. 

After 40 years of interdependence and common rule making, the UK is now setting out to reconstruct the entire apparatus of a separate nation state, with separate rules, and separate rule making and  adjudication systems. This is how Theresa May has chosen to interpret the referendum result, by ruling out any jurisdiction of the ECJ.

A nation state apparatus, that would have sufficed in the 1960’s, will not suffice for the 2020’s, because the world is much more interdependent, more interconnected, and faster moving, now than it was then.

The exercise the UK is undertaking will involve establishing a new bureaucracy, to deal separately with all the regulatory questions that previously were delegated by it for collective decision within the EU. The EU superstructure will have to be replicated in London, at some cost.

The UK may want to develop separate standards for many goods and services, but, if it does so,  UK firms will have the extra cost of complying, not only with the new UK standards, but with EU standards as well for any goods and services they wish to export to the rest of Europe.

There will thus be duplication at firm level, as well as at government level.

The only way to minimise this would be to go for a “soft Brexit”, whereby the UK would adopt EU rules, but without having a vote on those rules.

Such an option may be sustainable business wise, but it will not be sustainable politically in the medium term.

It would represent a substantial diminution of UK “sovereignty” relative to the “sovereignty” the UK now has as a full EU member. This would soon become politically unacceptable to the British people.

One can easily imagine the anger of the “Daily Mail” about the UK having to enact, and enforce, EU standards, on which the UK had had no vote!  But that is what a soft Brexit would entail.

For these reasons, a “soft Brexit” will only be a temporary arrangement, and one should  not invest all ones hopes in it.

I am coming to the view, reluctantly, that the only viable long term options are either

  • a “hard Brexit” or
  • a decision by the voters of the UK to stay in the EU after all.

The latter seems very unlikely indeed at the moment, because UK voters will not want to admit they made a mistake. They have no sentimental attachment to Europe anyway and sentiment seems to trump economics in voter’s minds nowadays.

But that could change gradually.

British people are, many for the first time, now learning about what the EU really is.

At the best of times, British people were never very curious about the EU or how it worked. Now they are required to find out, as part of the exit negotiation. It will be something of a revelation!

For 40 years, UK voters have been passengers in the EU car. Now, having decided to get out of the car, they are taking a first look under the bonnet.

They will discover how interconnected the different parts of the engine are, and how difficult it would be to link into some, but not into all, parts of the engine.

The UK will have to build its own engine from scratch now, and decide in which direction it wants the new car to travel. There was no consensus at all on the latter point on the “Leave” side in the referendum. Some want a more globalised Britain, the majority wants the exact opposite.

Ireland will be a spectator in this process.

The physical isolation of Ireland from the rest of the EU, in the event of a hard Brexit, is a problem that will need much thought at EU level, in the interests of European solidarity.

Experts in logistics, transport and communications need to be brought together at EU level, to examine how the costs of this physical isolation of Ireland can be minimised.

Commisioner Verstager, who is responsible for EU competition policy, should look at what needs to be done to ensure that states that are physically isolated from the core of the EU, like Greece, Malta, Cyprus and Ireland,  can always participate on an equal basis in the internal market.

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CHINA TRANSFORMED …..A NEW BALANCE OF POWER

china-flag-mapThe economic transformation of China is the most important global economic event of the past forty years. It has changed the balance of power on the Eurasian landmass, in ways we are only beginning to comprehend.

The economic transformation of China happened because, since 1979, there has been lively economic competition within China, something that was not allowed in the Soviet model.  China’s economy grew, while the centralised Soviet system stagnated. This explains why Communism survived in China, but collapsed in the Soviet sphere. China also grew thanks to the opening up of global trade, under successive rounds of trade liberalisation, which allowed China to build a powerful export sector.

Now China is having to transform itself again. Its export led model has reached its limits. Labour costs are rising because the big transfer of labour from farming to industry is over, and the Chinese population is beginning to age. The working age population of China peaked in 2015 and will decline from now on. Chinese exporters are being undercut by lower wage economies like Vietnam.

The Chinese economy has also reached environmental limits. The pollution level in some cities is dreadful, and the air is dangerous to breathe, even on an apparently clear day. I  experienced  this for myself when I visited China in the past fortnight on business.  Environmental losses reduce China’s GDP by 10%.

The proportion of its population living in cities will grow from 20% in 1978, to 50% today, and to 75% by 2030. This will lead to even more pollution, unless the cities are built to a different model. China is devoting a lot of research to this and may soon become an exporter of green technology. Necessity is the mother of invention.

Meanwhile China has an increasing number of well off, high spending, consumers. The Boston Consulting Group recently estimated that what it calls the “upper middle class” ( a group that can afford regular foreign holidays) will rise from 53 million today, to 102 million by 2020. Interestingly it estimates that, by 2020, the upper middle class in will reach 73 million in Indonesia, 32 million in India, and 21 million in Thailand.

At the other end of the scale, China has not got a well developed welfare system. The income gap is very wide. Stress is high. Parents are left looking after grandchildren back in rural China while sons and daughters seek work in the cities. There is a two tier labour market, under which long established city residents qualify for social supports, but recent arrivals in cities do not, and can remain in a precarious situation for years.

Nationalism is very strong in China, and one can foresee a clash between the American nationalism of Donald Trump, and the Chinese nationalism of the Communist party.

Both can exploit suspicion of the other, to rally political support internally.

The United States should be cautious. The abandonment of the Trans Pacific Partnership, by both Donald Trump and Hillary Clinton, will leave China in the driving seat, as far as trade policy in East Asia is concerned.  It is ironic that China increasingly sees itself as the defender of an open world trading system, while the United States adopts protectionist rhetoric.  Adding a conflict over the status of Taiwan to this mix could have unpredictable results.

If, under Donald Trump, the US moves closer to Russia, the EU may find its interests aligned more with those of China in some fields, like climate change.  This will be reinforced by the anxiety many of the central European members of the EU feel about Russian intentions, and Russia’s view that some of them should properly belong in a Russian sphere of influence, rather than being so closely aligned with Western Europe through the EU. Russian support for west European politicians like Marine le Pen is part of a strategy to undermine the EU.

Historically, China has been a supporter of EU integration, while Russia has been hostile, because it felt itself excluded from pan European security structures.  Russia feels itself hemmed in. Russia’s seizure of Crimea, and its involvement in the Syrian Civil War, can also be seen as attempts to break out of its strategic isolation and gain access to the Black Sea and the Mediterranean.

It is also to break out of its sense of isolation, that China has promoted its “one Belt, One Road” policy to link itself with Western Europe.

As a continuing member of the European Union, it will be in  Ireland’s economic and political interests  to play its full part in building a  balanced structure of peace on the Eurasian land mass, that protects the rights of small states, but  which also one that ensures that no great power feels itself hemmed in, or isolated. For that is how wars start.

 

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POLITICS AND DEBT……ITALY NEEDS BRAVE LEADERSHIP

Italy and EU Puzzle Pieces - Italian and European Flag

Italy and EU Puzzle Pieces – Italian and European Flag

Crunch decisions are approaching for Italy and its new Prime Minister Paolo Gentiloni.

The really difficult decisions are not about who gets which Ministry in the new government, or even about the timing of elections, but about how to cope with the problems of some of Italy’s banks.  

On Friday last the European Central Bank rejected a request from Rome to delay a proposed private sector  led rescue of Monte Paschi di Siena (MPS), Italy’s oldest and most troubled bank.

According to the Financial Times, this leaves Italy with little option but trigger a government led bailout of the bank which will involve imposing losses on junior bondholders in the bank, many of whom are small savers rather than anonymous financial institutions. “Burning the bondholders” thus does not have quite the same popular appeal in Italy as it had in Ireland a few years back!

But the burning of bondholders, in a bank that has to be rescued by the taxpayer, is now required by EU rules, and the EU is a rule based institution. The primacy of rules, rather than of raw power, are what distinguishes the EU from other international arrangements, and are among the reasons EU membership is particularly valued by smaller countries, like Ireland.

Avoiding a taxpayer led bailout of MPS, by forcing the other Italian banks, who are better off than MPS, but have troubles of their own, to bail out MPS could infect the  entire Italian banking system and weaken confidence in it.  And all banking, like all money itself, depends on confidence. As it is, Italian banks have only half the capital they need to meet  the required safety standards.

Of course it is true that if the Italian economy was growing more quickly, its banks would not be in such trouble. The Italian economy is expected to grow by only 1% this year, well below the EU average. In fact the Italian economy is the same size as it was in 2007, whereas other countries , which are also subject to the  disciplines of the euro zone, have grown substantially since 2007, France by 20% and Spain by 15%.

This contradicts those who want to blame the euro for all Italy’s problems.

For example, David McWilliams has mistakenly claimed  that “the strictures imposed by the euro have destroyed the Italian economy”. He said that Italy’s economy grew, before it joined the euro. But it was only able to do this because it repeatedly devalued its currency. This gave temporary relief but concealed the underlying problems. Devaluation was an anaesthetic, not a cure.

Once it joined the euro, this had to stop

When  Italy’s  leaders decided to join the euro, and  set the rate of exchange between the old lira and the  new euro, they  knew  that  devaluation was impossible thereafter. This was a freely taken Italian decision.

Unfortunately Italian voters do not see things that way and blame Europe for problems that are actually home grown. For example in a poll last September, only 38% of Italians felt their country had benefitted from being in the EU, whereas 51% felt it had not .

In truth, the problems of the Italian economy predate the decision to join the euro. Government debt levels were increased during the 1980’s and were already  well above the recommended 60% of GDP  when Italy joined the euro.

Italy was already an ageing economy at that stage, with early retirement and historically low birth rates. The ageing of a society inevitably saps its growth potential, as even the Chinese are now beginning to find.

There was the added difficulty, since 2000, that the Italian consumer and fashion goods sector competed directly with goods coming from Asia, and Italy could no longer devalue  to meet this  new competition.

Italy did not adapt to this new reality.

Productivity remains poor in Italy.  For example, since 2007, Spanish productivity per hour increased by 10%, whereas Italian productivity per hour actually DECLINED by 5%. Both Italy and Spain are in the euro, so the euro does not explain this difference in  productivity performance.

The public sector in Italy is expensive and inefficient. The hourly pay rate in the Italian public sector is 40% above that in the private sector, whereas in France and Germany, the hourly rate in the public sector is below that in the private sector.

Incidentally in Ireland, hourly pay in the public sector is 25% above that in the private sector.

In Italy, healthcare and pensions absorb 20% of GDP, as against 12% in Ireland.

There are also severe inefficiencies in Italy’s commercial sector caused by lack of adequate competition. The transport and energy sectors are particularly costly.

There is a lack of competition in the legal system. The Italian courts are the third slowest in the EU. For example it takes 500 days to get a case into court. This means that it is difficult and costly for Italian businesses to enforce contracts and collect debts owing to them. Court delays have also contributed to the increase in non performing loans(NPLs) in the Italian banking system. NPLs are now 18% of all loans, as against 6% in 2007.

A Competition Bill, which would have helped resolve some of these problems, was watered down in the bargaining between the Senate and the Lower House.

Renzi’s constitutional reforms, which would have reduced the power of the Senate, would have dealt with that problem. Unfortunately they were rejected by the voters.

The Gentiloni government, like that led by Renzi, has a  majority in the Lower House, but will  now face an increased risk of  any reforms it proposes, being bogged down in the  Senate, because the Senate  will feel empowered by the referendum result.

The electoral arithmetic may have changed, but the arithmetic of Italy’s debts has not.

Leaving the euro would actually increase the nominal value of those debts, because the debts would still be owed in euros, but the money to pay them would have to be raised in a new, and probably, less valuable Italian currency.

Resolving Italy’s problems will require statesmanship of a high order in Rome, Brussels, Frankfurt and Berlin. Ireland overcame a similar crisis since 2010, and the willingness here of all sectors of society here to meet the painful challenge quickly , and leave politics aside till later, may provide a model that Italy could follow.

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THE MECHANICS OF BREXIT AND ITS EFFECT ON IRELAND

 

cropped-irish-flag.jpgI am deeply honoured to have been invited to speak here today in the company of your President, John Comer, and of the Minister for Agriculture , Michael Creed.

I worked with the Minster’s father, Donal Creed, when Donal was spokesman on Agriculture for Fine Gael, and I was the then secretary of the Party’s Agriculture Committee. That was 1969, long before we joined the Common Market.

I remember many meetings with ICMSA at that time, and was always impressed by the seriousness and realism of the way in which your organisation represents its members and agriculture more generally. The fact that your President, John Comer, comes from Co Mayo is evidence of the broad national reach of ICMSA.

I have been asked to talk about Brexit. Everything I say will be a personal opinion, not representing anyone else.

Everyone would like to know what form Brexit will take, and how it will affect Irish farmers, and the rest of the country too. Unfortunately, it is next to impossible even to begin to answer that question until we first see what the UK will actually look for. Only then can we begin to speculate in an informed way about how the negotiation might go.

In what I say today, I will try to describe the mechanics of the three negotiations that will probably take place

  • the negotiation of a Withdrawal Treaty.
  • the negotiation of Treaty covering the Future Framework of relations between the EU and the UK and, possibly
  • the negotiation of an Interim Agreement, to apply after the UK has left the EU, but before a full Future Framework Treaty has been finalised and ratified

TWO NEGOTIATIONS….ONE ABOUT WITHDRAWING, THE OTHER ABOUT THE FUTURE

Article 50 of the EU Treaty says

Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.

A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union.”

AGREEING GUIDELINES ON THE EU SIDE

It is important to note here that it will be the Commission that will do the actual negotiation with the UK, but it will do so under guidelines agreed by the Heads of Government of the 27 Member states meeting in the European Council. It will also have to bear in mind that the final deal will have to approved by the European Parliament  too.

Given that the European Council operates by unanimity, and that its members are heads of government and each of them have countries to run at home, agreeing these guidelines will take time and be difficult.

Any one country can object to any part of the guidelines.

There are wide differences between EU member states in their sensitivity to developments in the UK. It is to be expected that

  • some will emphasise a continuing right for their citizens to live and work in the UK,
  • others will emphasise trade with the UK, and yet
  • others will emphasise how the make gains for their businesses from the exclusion of UK competition(for example in financial services).

THE FUTURE FRAMEWORK FOR EU/UK RELATIONS

It is also important to note that Article 50 says that the proposed Withdrawal Treaty shall take account of the” framework” of the withdrawing states” future relationship” with the Union.

There is no guidance in the Treaty as to what this “framework” document might say.

In their Referendum, UK voters were asked if they wanted to leave the EU, but their views were not sought on the sort of framework for future relations they would approve.

Nothing appeared on the ballot paper about

  • access to the EU market for UK produced goods or services, about leaving the European Economic Area (which includes several non EU countries) or about what UK voters would want the agreement with EU to say about
  • the status of UK citizens already living in EU countries after the UK has left
  • the status of EU citizens already living in the UK or about
  • the future rights of EU or UK citizens to live and work in one another’s  jurisdictions or to avail of social services while there

DIFFERENT PROCEDURES FOR CONCLUDING THESE NEGOTIATIONS

Article 50 continues

“ That agreement  (for the withdrawal of a state) shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.”

So while the Council guidelines for the negotiation require unanimity, the actual approval of the final withdrawal Treaty can be done by qualified majority.

But there is a time limit because Article 50 goes on to say

“ The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period. “

This two year time limit applies to the Withdrawal Treaty, but there is no time limit for the negotiation the Framework for future relations.

If , within two years of the sending by the UK of its article 50 letter seeking to withdraw from the EU, a Withdrawal Treaty has not been agreed by the UK on one side, and a qualified majority  on the EU side, the UK is simply out of the EU, with no rights at all on the EU market beyond those enjoyed  by any state anywhere in the world.

This is a real doomsday scenario, but it is a realistic possibility, because the gaps in the negotiating positions between the UK and a potential blocking minority of EU states (26.3% of weighted votes representing at least 35% of the EU population) are very wide.

But, at least, the withdrawal Treaty can be approved on the EU side by a qualified majority (73.9% of the weighted votes  representing 65% of the EU population).

Agreeing the terms of the Framework agreement with the UK, of which the Withdrawal Treaty must “take account ” will be even more difficult, because this Future Framework Agreement will probably have to be unanimously agreed by ALL 27 EU states and their parliaments, unless it is a very narrow agreement covering only trade in goods.

If it is wider than this, it is likely to be deemed a so called “mixed agreement”, which is an agreement that includes matters where the competence is shared between the EU and the member states.

A ROCKY PATH TO RATIFICATION FOR A FUTURE UK/EU FRAMEWORK DEAL

In this case, every member state parliament, as well as every member state government, will have to approve the Framework agreement with the UK.

This is what happened with the recently concluded EU Agreement with Canada, which, as you will remember, was threatened with a veto by Belgium, because under internal Belgian constitutional arrangements, all five subsidiary parliaments in Belgium must agree to any international treaty signed by Belgium, and two of them did not agree.

A similar threat to an Agreement with the UK could come from a decision to call referendum  in a member state.

For example, the future of an EU Agreement with Ukraine has been put in doubt by its defeat in a referendum in the Netherlands, requisitioned by a petition of only 300,000 signatories out of a total population of 17 million, and on a turnout of slightly above the minimum required 30%.

It is easier nowadays to organise petitions online, so this could be another threat to a Framework Agreement with the UK, not just in the Netherlands, but in any other countries with similar petition/referendum provisions.

The UK could not really object to this happening because the UK itself, on 23 June, used a national referendum to make a decision affecting the whole of Europe in a profound way.

COULD THE UK CHANGE ITS MIND?

Could the UK change its mind, when it discovers that things are not turning out as its voters, and those politicians who favoured leaving the EU, hoped they would?

Article 50 says

“ If a State which has withdrawn from the Union asks to rejoin, its request shall be subject to the procedure referred to in Article 49.”

Article 49 requires the unanimous agreement of all existing member states, and of the European Parliament, to the readmission to the European Union of a member state, just as it would to a state applying to join for the first time.

In other words, the UK, seeking to rejoin the EU after having left, would be in exactly the same position as Serbia, Montenegro or Turkey is today.

A more interesting question is whether the UK, having written its Article 50 letter in March 2017, could decide, say in late 2018, just before the two year time limit  would expire in March 2019, that it wanted to withdraw the letter, and stay in the EU after all , on the existing terms?

This is not an easy question to answer.

Article 50 doesn’t say that notification once given can be withdrawn, but nor does it say that notification can’t be withdrawn.

The prevalent view is, perhaps, that notice can be withdrawn prior to actual withdrawal from the EU but the position is not clear. If revocation of an article 50 notice was not accepted by all other EU members, the Court of Justice of the European Union would have to decide the point.

This may all sound a little fanciful  at this point, but it is possible that, by late 2018, the UK might have a different view on EU membership to the one it had on 23 June 2016.

It would certainly have to organise another referendum, which could be difficult given the rigid two year deadline for complete exclusion, in the absence of an agreed Withdrawal Treaty.

But if the discussions on the Framework Agreement were going really badly, or if  the economic costs of separation were just proving greater than expected, and if prospects did not look like improving, a majority of MPs might decide to consult the voters on the possibility of taking back the Article 50 letter.

Already there is some sign that UK opinion has shifted slightly since the 23 June Referendum.

Asked in a Eurobarometer  poll last September, three months after the Referendum, whether they thought the  UK benefitted from being in the EU

  • 56%  in the UK said they thought the UK had benefitted, an increase of  5 percentage points on the previous poll and
  • only 34% said they thought it had not, a drop of 2 points on the previous poll

If that trend were to continue, things could look different in the late 2018 or early 2019.

But it would be very difficult politically to change course. National pride would be hurt.  Telling voters they made a mistake is rarely a winning political strategy……even though voters do sometimes make mistakes

CONTENT OF WITHDRAWAL TREATY

Let me now turn to what I think will be the content of the two negotiations

First ,the Withdrawal Treaty negotiation and

Second, the Framework of Future Relations negotiation

My understanding is that the Withdrawal negotiation itself is likely to cover quite a narrow, but very contentious, range of issues.

These will probably include five broad topics

  • What the UK will have to pay to leave,  what will be the UK share of any remaining financial commitments dating from its time as a member, covering matters such as pensions of EU officials , other obligations outstanding, less the UK ‘s share in EU assets
  • The mechanics and costs of moving EU institutions, like the Banking Authority and the Medicines Agency, out of the UK and into an EU country (perhaps Ireland)
  • The Rights of EU citizens already living in the UK, and UK citizens already living in an EU country. The rights of future migrants from the UK to the EU, and vice versa, will be for the Future Framework negotiation
  • The relationship of the UK with the WTO after it has left the EU

+ Special situations concerning the land boundary between the UK and the EU, as in Ireland and at Gibraltar. It is good that this being dealt with upfront, and not just buried in the wider Framework negotiations. But, obviously, the content of the final Framework deal, if there is one, is bound to affect what happens on the Irish border.

While these five issues are, on their face, straight forward, the UK contribution to the EU budget was elevated into a big issue in UK politics over the past few years. False statements were made before the referendum about the amount the UK would get back by leaving,  and a gain of £350 million a week was promised by some who now hold high office in the UK government.

So this could become a very difficult discussion.

CONTENT OF FUTURE FRAMEWORK TREATY

The Future Framework negotiation will be a much wider one and will take in matters of direct relevance to ICMSA members, such as

  • whether the EU Common External Tariff will have to be levied on agricultural products coming into Ireland from the UK, or Northern Ireland
  • how the origin of imports from the UK will be verified to ensure that they are not dumping third country products on our market,
  • how veterinary and food safety standards will be verified, and how and by whom smuggling will be suppressed.
  • whether geographic indicators will be recognised
  • if there will be a tariff free quota to allow existing trade levels to continue or if all trade will bear the appropriate tariff

The tariff issue will be particularly difficult in the food sector, because this is the sector in which the EU has the highest tariffs, and restrictions, on third country imports in order to protect the incomes of EU farmers.

Everything depends on what sort of food and agriculture policy the UK decides to follow outside the EU. Will they go for a “cheap food” policy like they had before they joined the EU 40 years ago or will they retain current supports for farmers and rural life?

There is no indication so far as the what choice they will make, at least after 2020.

Negotiations about product  safety, rules of origin, and related issues will arise with all products and services, even those to which no tariff applies, because once it has left the EU, the UK will be free to depart from recognised EU standards.

If the UK rejects the jurisdiction of the European Court of Justice, as Prime Minister May says she will, there will no longer be a referee to interpret the rules of the shared market, and all markets need a referee.

If one wants to assess the likely complexity of a Future Framework Agreement the UK and the EU will have to negotiate with one another, one has only to look at the content of the Agreement the EU has concluded  with Canada.

As well as tariffs and trade, that agreement had to cover

  • product testing and standards….would each side recognise the other side’s tests for every product or would there be duplication?
  • mutual recognition of professional qualifications….a huge field
  • the right of EU and UK firms to sell goods and services to government entities in one another’s jurisdictions
  • protection from discrimination against EU investors in the UK and vice versa
  • access to fishing grounds

The EU and the UK negotiators will not only have to reach agreement on the substance of how these matters are to be handled, but  they will also have to agree a procedure for settling disputes about interpretation, because the UK, outside the EU, will not accept the rulings of the European Court of Justice (ECJ)

But probably the most contentious issue in the Future Framework negotiation will be right of people to emigrate to the UK from the EU, and vice versa.

Control of Immigration was not, initially, one of the UK’s complaints about the EU.

The Blair government actually opened the UK to  central and east European EU immigrants, in 2004, before it was obliged to under the Accession Treaties for those countries.

But, during the Referendum campaign, immigration became the central debating point ,and leaving the EU was presented as the way of “taking back control” of immigration.

The case was over stated.

Of all immigrants moving to the UK in 2014,

  • 13% were UK citizens returning home.  
  • 42% were EU nationals emigrating to the UK. But the biggest number,
  • 45%, were non EU nationals moving to the UK.

The UK already had full “control” over 45% of all immigration which came from non EU countries, and the Minister who exercised that control then, the Home secretary, is now the Prime Minister.

But in politics, perception is sometimes more important than reality, and immigration from the EU is perceived to be a problem by UK voters.

The EU side has taken a firm line on this. There will be no participation of the UK in the EU Single market without free movement of people to work. If capital is free to move, people should be free to move too. No Single market without free movement. Discrimination on the basis of nationality is excluded within the EU, and a state should not be able to leave the EU, introduce such discrimination, but still have all the other benefits of access to the EU market. If that option were the open, others EU members would be inclined to follow the UK out of the EU.

The fact that there must be unanimous agreement, by all 27 EU countries, to the Future Framework is relevant here. Countries like Poland will not be keen on a breach of the free movement principle.

WILL AN INTERIM DEAL BE NEEDED IN 2019?

I think it should be clear, from all I have said, that finalising a Framework Agreement with the UK within the two year time frame will be so difficult as to be almost impossible.

The Agreement with Canada took six years to negotiate and it was much less complex than any agreement with the UK would be.

So what happens, in late March 2019, when the 2 year deadline is reached, if the Withdrawal Treaty has been agreed, but  if the Future Framework negotiations are still going on, with no certainty whether they are going to succeed or not?

In this case, some form of interim agreement with the UK might have to be reached. This might involve the UK leaving the EU, losing its voting rights, but still retaining full access to the EU market until a final Framework Agreement was reached.

There will be almost as many knotty questions to answer about  that sort of an Interim Agreement as there would be about a Final Agreement.

For example, what contribution would the UK  then continue to make to the EU budget?

Would there be a time limit on the Interim Agreement, and could it be extended?

Would the UK accept the jurisdiction of the ECJ during the Interim?

Would an Interim Agreement have to be approved by the parliaments of all 27 member states?

Does the EU Treaty allow for such an Interim Agreement?

CONCLUSION

My conclusion from all of this is that the decision of the UK Conservative Party to have a referendum on EU membership, without a clear alternative being known, was unwise because it will lead to a huge diversion of time and talent away from more constructive purposes.

Since the Referendum, the UK government has, retrospectively, interpreted the vote to mean a decision to leave the EEA, and leaving the European Customs Union, things that were not on the ballot paper, and are not required by its wording at all. That is undemocratic.

Brexit poses disproportionately great challenges to Ireland. It will require us to build new and stronger alliances in every EU country, and to do that we will need to understand the interests of other countries almost as well as we understand our own. We must not make the mistake David Cameron made of thinking that an understanding with Germany will deliver what we want from the EU. In the EU, every country counts.

………………………………………………………………………………………

Speech  by John Bruton,  at the AGM of the ICMSA at 4pm on Monday 28 November in the Castletroy Park Hotel, Limerick

 

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DIFFERING OPINIONS ABOUT THE EU

eurobarometerThe recent Eurobarometer poll (taken in September/October 2016) gives a good insight into the problems European Union leaders will face in crafting a unified response to the multiplicity of challenges it now faces.

It tells us that voters, in the different EU countries, see the EU very differently.

IS IT GOOD TO BE IN THE EU?

On the question of whether membership of the EU is a good thing,

  • 81% of Luxemburgers,
  • 74% of Irish, and
  • 72% of the Dutch agree.

But at the other end of the scale, only

  • 31% of Greeks,
  • 33% of Italians, and
  • 32% of Czechs agree.

Interestingly 47% of British voters said they thought it was good for the UK to be in the EU, which is a better score than 8 other EU states.

The finding in regard to opinions in Italy about the value of being in the EU is very worrying, in light of the forthcoming referendum there, and the huge debt problems Italy faces, for which it may need help from the rest of the EU.

If Italians have such a low opinion of the EU, are they likely to accept EU terms for help?

It would appear that Italian voters blame the EU for the fact that their economy is growing more slowly, for a longer time, than almost any other EU state.

Before the euro, Italy was able to adjust to a loss of competitiveness by devaluing its currency . Now Italy and its banks owe money in a hard currency and they no longer have the option of devaluing some of their debts away.

HAS YOUR COUNTRY BENEFITTED ECONOMICALLY FROM BEING IN THE EU?

60% of EU voters think their country has benefitted from being in the EU,

But only 38% in Italy think so, only 44% in Greece and Cyprus, and only 48% in Austria.

Remarkably 56% of UK voters said they felt their country benefitted from being in the EU, even though they had just votes to leave it!Obviously non economic factors swayed the vote in the UK referendum.

The countries , where the biggest majorities feel their countries have benefitted from being in the EU, are

  • Lithuania(86%),
  • Luxemburg( 84%) and
  • Ireland (84%).

WHAT IS THE QUALITY OF EUROPEAN DEMOCRACY?

Some argue that there is a crisis in European democracy, in the sense that voters do not feel that their vote counts, in their own country, or in the EU.

Denmark and Sweden are the countries where voters feel their vote counts the most, at both EU and national levels.

The countries where people feel their vote counts the least include Greece, Lithuania, Cyprus, Italy and Spain.

Generally it seems, that if people feel their vote counts (or not) at national level, they also tend to feel that their vote counts at EU level . Ireland comes in the middle of the field on both measures.

These findings would suggest that action to improve voter involvement in decision making need to be taken both by states themselves and at EU level.

WHAT DO YOU THINK OF THE EUROPEAN PARLIAMENT?

Another question asked was about whether voters had a positive view of the European Parliament.

The voters with the least positive view are to be found in France (only 12% of voters have a positive view).

38% of Irish voters have a positive view of the Parliament, which is the 3rd highest score of the 28 countries.

Anti EU feeling in France is a worry, as the French Presidential election nears.

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