Sovereignty with a purpose

10th October 2011

There is a lot of debate about what should happen next in Europe, and a lot of talk too about lack of leadership from EU Heads of State. I don’t disagree with those who say that there’s a failure to take decisive action on the sovereign debt crisis. But it seems to me that the question is not so much whether the EU should take action; everyone agrees that “something has to happen”.

The real issue is what actions should be taken.

Whatever directions the policy shifts take are likely to be traumatic. For example, if there is a move towards closer integration on fiscal policy throughout the Eurozone, it is difficult to see how this can be achieved in any real sense without some Treaty change. And because there has been little or no effort to close the so-called democratic deficit throughout the Union, European voters understandably are going to be hugely suspicious of, and resistant to changes that they feel may be inimical to their immediate interests – especially at a time of economic hardship and recession.

I spoke this weekend at a conference organised by Feachtas, the People’s Movement and the Peace and Neutrality Alliance – specifically on the topic “The struggle to re-gain Irish sovereignty”. These are some of the points I made in my contribution.

It’s undoubtedly true that the EU/ECB/IMF deal has undermined our independence of action on fundamental economic decision-making. The spectacle of quarterly, monthly and even weekly supervision of our financial affairs by the Troika has definitely shaken our independence and our sovereignty.

We have to get out of this bind as quickly as we can. But we can’t do this by simply repudiating the bail-out deal and walking away. We have to re-negotiate as best we can, and seek to reduce and ameliorate the enormous debt burden that we face, while at the same time honouring the terms of this solemn agreement made by the State. We must resist the urgings of some to go further than what the agreement actually requires, for example in the area of labour market reforms.

Most importantly of all, we should start to use this period to have a proper debate – finally – about what kind of economic and social model we want to pursue in this country. The impetus for this kind of debate must come from within ourselves. It will involve asking whether we really want to maintain top-class public services – whether in education, health or public infrastructure. And if we do (as I believe we should) we will have to abandon the pretence that we can have such services without a realistic level of taxation. We can eliminate waste and introduce efficiencies. These are essential tasks. But when we have done this, we will still have to pay for public services and we have to face up to this in a more honest way.

On the question of “re-gaining” our sovereignty, I agree that this is a worthy and essential objective. But we need to think about what sovereignty means in our modern world. Global capital has long since abandoned any respect – or even recognition – of national boundaries or sovereignties. Insofar as sovereignty is relevant nowadays surely it’s the sovereignty of States as against rampant, unregulated capital markets; rather than the sovereignty of individual States as against each other, or even as against the European Union?

The question now is more whether States (and the democracies they are supposed to embody) can or will assert their sovereignty in the face of the markets, rather than assert their sovereignty vis-à-vis each other or vis-à-vis supranational organisations such as the EU.

Even Chancellor Merkel recognised this when she met the Pope last week in Berlin and commented:

“We spoke about the financial markets and the fact that politicians should have the power to make policy for the people and not be driven by the markets, and that this is a very, very big task in today’s times of globalization…”

Is it not a measure of where the world is that a major leader should find it necessary to state that politicians “should” have the power to make policy in these circumstances?

Mrs Merkel is right. It is indeed a very, very big task. But when will we begin to confront this. What will be the politics? If there is to be this re-assertion of democratic control when and where will it begin? This is also very much a challenge for the left and for social democratic parties, who in many ways retreated from the pursuit of these long-standing and noble objectives thirty years ago. Instead, they threw in their lot with the new conventional wisdom of light regulation, low taxes, and a “private good, public bad” attitude to public services.

So, I think that if we concentrate on national sovereignty in the narrow sense, we will pass over the opportunity to participate in, and shape a real debate about what kind of world we want to build from the ashes of this enormous crisis.

A real debate about how we fund our State. How we regulate activities from planning to banking to sewage treatment in rural Ireland. A real debate about our model of democracy.

This is where we need to start.