Tag: Europe

SIGNPOSTS TO A NEW AND VERY DIFFERENT EUROPE

On June 24, 2020

Last week’s video conference Summit of EU Heads of Government was important.

BREXIT

The leaders received a report on the meeting of EU Presidents Von der Leyen, Michel and Sassoli with the UK Prime Minister Boris Johnson.

They noted his decision not to seek any extension of the transition period.

Significantly, the EU leaders decided to make no change to the negotiation mandate given to the Commission for its negotiation with the UK on a future relationship with the EU. There had been suggestions in the UK media that the EU should loosen the mandate to facilitate the talks.

If a “No Deal” is to be avoided, the UK will now need to do some creative thinking about how it can give legally enforceable commitments to meet the concerns highlighted by the EU side on issues like

guaranteeing fair competition, if the UK is to have access to the EU Single Market, especially on state to business and quality and environmental standards
access for EU travelers to UK fishing grounds, if there is to be access for UK fish exporters to the EU consumer market for fish
human rights guarantees, if the UK is to have access to police cooperation with the matters like the EU Arrest warrant
an overall partnership structure to govern the future EU/UK relationship.

If there is a “No Deal”, the relationship between the UK and its neighbours could deteriorate quite dramatically. There will be bitterness on both sides. This will not be confined to economics, but will affect every aspect of life.

POST COVID 19 ECONOMIC RECOVERY PROGRAMME FOR EUROPE

The post Covid 19 economic recovery proposals put forward by the European Commission are really ambitious.

For the first time, the EU itself will be borrowing substantial sums on its own account and passing the money on to member states.

Detailed allocations of funds for each country have been suggested. These allocations are based on an analysis of which countries, regions, and economic sectors that have been hardest hit by Covid 19.

It is interesting to note that there are wide differences in the economic impact of Covid 19 within countries. For example two regions of Italy are much worse hit than the rest of the country.

The analysis of need, on the basis of which the Commission proposed allocations have been prepared, takes no account of the impact of Brexit. Even if there is an EU/UK Deal, Brexit will do a lot of additional economic damage from 1 January 2021 onwards. The allocations will have to be revisited at that stage.

If fully implemented, it is estimated that the Commission proposals could, by 2024, add 2% to the overall GDP of the EU.

Member states will design their own programmes for spending the money.

There will be equity supports for viable companies.

It is important that the money be spent in ways that will enhance the sustainability and efficiency of the EU economy.

Since the financial crisis of 2008, the Commission has developed expertise in identifying what works and what does not work.

The judgement as to what is a “viable” business, that should get help, will not be an easy one. Objective criteria should be used. Some will be disappointed. There will be controversy and accusations of favouritism.

Eventually, borrowed funds will have to be repaid, or rolled over into new borrowing.

Interest rates will not always be as low as they are today, especially if the global economy recovers and there is an increased demand for funds in other parts of the world. So rolling over debts may not be wise.

Keynesian economics is not easy to implement in democracies.

Keynesianism encourages governments to run deficits and borrow, when times are hard. But that requires them to run budget surpluses and to pay down debt, when times are good.

Politically, the first part is easy, but the second part is really difficult.

In good times, the expectations of the electorate of what governments should provide are very high and rise incessantly. There is no electoral appetite for using the good times to pay off debts. We need to keep that in mind.

THE IRISH BACKSTOP….HOW DIFFICULT?

By John Bruton

On October 16, 2018

In BREXIT, Theresa May

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

In a Joint Report of 8 December 2017, the UK agreed to respect Ireland’s place in the EU 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”.

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 in the Joint Report.

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

If the UK government had decided to leave the EU, but to join the European Economic Area (the Norway option),this would also have minimized the Irishborder problems. The government rejected that because it would have meant continued free movement of people from the EU into the UK .

In each decision, maintaining its relations with Ireland was given a lower priority than the supposed benefits of trade agreements with faraway places, and being able to curb EU immigration.

The government got its priorities wrong.

Future trade agreements that may be made with countries outside the EU will be neither as immediate, nor as beneficial to the UK, as maintaining peace and good relations in the island of Ireland. The most they will do is replace the 70 or more trade agreements with non EU countries that the UK already has as an EU member and 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(or anywhere else) to find work. These countries have low birth rates and ageing populations, and thus a diminishing pool of potential emigrants.

Solving the supposed 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 looks for a Canada or Ukraine style deal, the Irish border problem will be 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 long land border would be physically impracticable, so the only option would be to do it on the Irish Sea.

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.

It is time for the Conservative Party to return to being conservative, and conserve the peace it helped build in Ireland on the twin foundations of the Belfast Agreement and the EU Treaties. Conservative Party members might remember that, without John Major’s negotiation of the Downing Street Declaration in 1993, there would have been no Belfast Agreement in 1998.

The proposals the UK government is making for its future relationship with the EU will run into a number of obstacles in coming days.

The first will be that of persuading the EU that the UK will stick to any deal it makes.

Two collectively responsible members of the UK Cabinet, Michael Gove and Liam Fox, have both suggested that the UK might agree to a Withdrawal Treaty on the basis of the Chequers formula, but later, once out to the EU, abandon it, and do whatever it liked. This would be negotiating with the EU in bad faith. Why should the EU make a permanent concession to the UK, if UK Cabinet members intend to treat the deal as temporary?

The second problem relates to the substance of the UK proposals.

They would require the EU to give control of its trade borders, and subcontract control to a non member, the UK. While the UK proposals envisage a common EU/UK rule book for the quality of goods circulating, via the UK, into the EU Single Market, the UK Parliament would still retain the option of not passing some of the relevant legislation to give effect to it. The UK would not be bound to accept the ECJ’s interpretation of what the common rules meant. Common interpretation of a common set of rules is what makes a common market, common.

Mrs May is not the only Prime Minister with domestic constraints. Creating a precedent of allowing the UK to opt into some bits of the EU Single Market, but not all, would create immediate demands for exceptions from other EU members, and from Switzerland and Norway (who pay large annual fees for entry to the EU Single market). It would play straight into the hands of populists in the European Parliament elections, which take place just two months after the date the UK itself chose as the end of its Article 50 negotiation period.

It does not require much political imagination to see that aspects of the UK proposal, if incorporated in a final UK/EU trade deal in a few years time, would be a hard sell in the parliaments of some of the 27 countries. We must remember that all that would be needed for the deal to fail, would be for just one of them to say NO.

Remember how difficult it was to get the Canada and Ukraine deals through.

THE STRUGGLE FOR SUPREMACY IN EUROPE 1453 TO THE PRESENT

By John Bruton

On January 7, 2018

In Books

I recently greatly enjoyed reading “Europe, the Struggle for Supremacy 1453 to the Present” by Brendan Simms.

He writes from a perspective that sees continuing conflict as the determining force in European politics. Military and strategic considerations are paramount.

This emphasis would not be shared by all historians. Peter Wilson’s “The Holy Roman Empire, a thousand years of European history” lays stress, instead. on a long surviving effort to build a European legal order, that curbed and contained conflicts, under a shared allegiance to an elected Emperor and to a commonly accepted set of mutual expectations. This thousand year old arrangement only ended in 1806, after 1000 years.

Indeed, Simms own book throws light on later attempts to reconstitute a common European Home with common European set of house rules.

In the 1920s, the French leader Aristide Briand was prepared to trade French sovereignty for permanent restraints on German power. The UK stood aside from this because it relied instead on guaranteed of military support for its position from Australia, New Zealand, and Canada at the Imperial Conference of 1925. Although the Irish Free State was at that Conference, it offered no similar guarantee.

After the Second World War, a meeting, chaired by Winston Churchill, took place in the Hague in 1948 in a second attempt to build a structure for unity in Europe and avoid another war.

It could not agree on a model for European unity. Most countries were prepared to pool some sovereign powers, but the UK insisted that it would only work on an intergovernmental basis, which maximised its freedom of action. Even when it eventually joined the European Common Market, which did contain some sharing of sovereignty, UK politicians, and public opinion continued to see “Europe” as something apart from the UK, with which the UK would do business on a transactional case by case basis. Therein lay the seeds of Brexit.

In their hearts, many English people never joined the European Union at all.

While Simms may over emphasise the geostrategic conflicts in and around Europe, others ignore these at their peril.

Russian pressure on the Baltic States and Ukraine harks back to conflicts that last came to the surface at the end of the First World War. Rumania feels threatened by Russian pressure in Moldova, which was occupied by Stalin in 1940 under cover of his pact with Hitler.

I do not think there is a true European Union consensus on how to deal with any escalation of these types of conflicts, notwithstanding the mutual defence assurances NATO members have given one another. There is still an implicit reliance on the United States to save Europe.

But, unless there is a crisis, European defence policy will evolve very slowly.

The EU is not a state and is not about to become one. It is, instead, a habit of consultation and common action between states, underpinned by legal and institutional arrangements that are evolving in response to needs as they arise.

Ireland will remain within that structure with some influence on its evolution. The UK is turning aside, which is unfortunate because the security of much of Ireland’s infrastructure is dependent on links through the UK and its territorial waters. The sea is not the barrier to interference by hostile forces that it was in 1939. Increased interdependence has brought increased vulnerability

Brendan Simms writes very well and there is new insight or angle on European history to be found on every second page.

I recommend this book, and also Peter Wilson’s book too (although I am only a quarter way through it!).

“El Reino Unido ha puesto a Irlanda en una situación casi imposible”

By John Bruton

On December 11, 2017

In John Bruton

El Mundo correspondent, Carlos Freneda, interviewed John Bruton for Spanish Newspaper.

“El Brexit dañará más a la economía irlandesa que a la británica”, afirma el ex primer ministro irlandés John Bruton

Londres abonará entre 45.000 y 55.000 millones de euros como factura por el Brexit

John Bruton (Dunboyne, 1947) fue primer ministro irlandés en los “felices” 90: del mercado único que suprimió las barreras físicas entre las dos Irlandas, al Acuerdo del Viernes Santo que allanó el camino al proceso de paz. Bruton advierte ahora que los avances logrados en los últimos veinte años pueden saltar por los aires con el Brexit, que tendrá un mayor impacto económico y social en la vecina Irlanda que en el propio Reino Unido.

¿Hay alguna manera de soluciona el “problema irlandés”? ¿Se puede quedar una parte de isla dentro de la UE y la otra fuera?
: El obstáculo está en la mente cerrada de la facción pro-Brexit del Partido Conservador. No entienden que los mercados abiertos requieren normas comunes, decididas democráticamente entre los países e interpretadas de un modo uniforme. Eso es lo que facilita la UE. La permanencia en el mercado único y en la unión aduanera podría ser una solución, pero los brexiteros (y los unionistas) no ven nigún valor en ello… El Reino Unido ha puesto a Irlanda en una posición casi imposible, tanto para preservar el proceso de paz como para asegurar el libre comercio entre las dos partes de la isla. Una vuelta a la frontera dura seriviría para aislar los nacionalistas del norte de una manera peligrosa… El Brexit dañará potencialmente más a la economía irlandesa que a la británica. El Reino Unido puede haber votado a favor de este acto de autolesión económica, pero los ciudadanos de la República de Irlanda no han votado, y los de Irlanda del Norte han votado por la permanencia.
El Gobierno británico ha llegado a sugerir una frontera “virtual” y sin fricciones, sin necesidad de volver a instalar aduanas y con los últimos avances tecnológicos…
: Eso no es posible. Dos terceras partes de los cargamentos que atravesarán la frontera tendrían que ser inspeccionados en algún lugar, y eso crearía poblemas.
Usted ha llegado a decir que Irlanda debe hacer cuanto esté en su mano para evitar el Brexit ¿Lo cree aún posible?
: Lo que creo que debería hacerse en prolongar el tiempo límite que fija el Artículo 50 y tener un margen de dos a seis años para intentar resolver las complejidades a las que nos enfrentamos. Así se daría tiempo a los británicos para cambiar de opinión si lo consideran, y eso haría innecesario un acuerdo de transición. El Reino Unido debería seguir siendo un miembro con derecho a voto durante ese tiempo.
¿Qué pasaría en Irlanda si el Reino Unido opta por marcharse de un portazo y sin un acuerdo con la UE?
: Eso sería desastroso para nosotros a medio plazo, y a largo plazo dañaría considerablemente las relaciones entre Irlanda y el Reino Unido. En ese caso, Irlanda tendería los puentes económicos y culturas hacia otros países como Francia y España, como ocurrió durante los conflictos del siglo XVI y XVII (en la batalla de Kinsale, sin ir más lejos).
¿Reconocerá el Reino Unido el daño que el Brexit puede causar a sus vecinos más próximos?
: Hay muy pocas señales de que quieran reconocer el daño, o que les importe lo más mínimo. En lo único que piensan es en sí mismos y en “recuperar el control”. El Brexit es un proceso más “psicológico” que económico, sobre el papel de Inglaterra en el mundo. No olvidemos que el Reino Unido es una idea puesta en marcha para asegurar y preservar los intereses estratégicos y militares de Inglaterra.
¿Qué sectores de la economía irlandesa se verían afectados por el Brexit?
: El sector manufacturero sobre todo: las mercancías que no pueden ser transportadas fácilmente por avión para evitar el Reino Unido. Y también la producción de carne y de lana. La agricultura sufriría mucho si tenemos normas distintas en el norte y en el sur. El sector energético lo notará también.
¿Piensa que el Brexit puede en última instancia dar impulso a la unificación de Irlanda?
: El principal obstáculo a la unificación es la hostilidad por una parte muy importante de la población en Irlanda del Norte. Las actividades en el pasado del IRA y el papel que juega ahora Sinn Féin refuerza esa falta de voluntad. Tampoco creo que la población en la República de Irlanda esté dispuesta a aceptar el peso de forzar a un millón de personas a integrarse contra su voluntad en una Irlanda unida. El coste no sería solo económico, sino en términos de sociales y de sectarismo. Por supuesto que habría mucho menos problemas si ese millón de personas cambiara de opinión, pero hay pocas señales de que eso sea posible.

Eurofound Forum

By John Bruton

On November 14, 2017

In Europe, European Union

It is an honour to be invited to address the topic of convergence at this major event The goal of European convergence will not be achieved by experts or elites.

It will require the whole hearted support of the broad mass of the peoples of the European Union. In what say tonight, I will try to tackle that.

The Minister for Foreign Affairs has outlined to you today Ireland’s approach to the Brexit negotiations. I support all he said.

Tonight I would like to move beyond Brexit.

POST BREXIT EUROPE

I would like to talk about what the European Union might look like in 2025, the date by which I expect the UK will finally have settled on its relationship, as a non member, with the EU.

I do not, of course, exclude the possibility that the UK will change its mind about leaving, but the two year time limit of Article 50 has, unintentionally, created a hot house atmosphere in which a re examination of proclaimed positions is almost impossible, politically.

I have advocated that the 2 year period in Article 50 should be extended to 6, but, for the purposes of this presentation tonight, I will assume that we stick with the 2 years and that the UK will be out in March 2019, and have finally agreed a permanent relationship with the EU by March 2025.

Ireland will remain a full member of the EU, notwithstanding the fact that a large non member country will, from 2019 on, constitute a large geographic, cultural and political barrier between Ireland and the rest of the EU. This geographic difficulty can, and will, be overcome but it will require extra commitment here in Ireland, and in the rest of the Union.

REDUCING CULTURAL BARRIERS WITHIN THE EU

For the service sectors of our economy, this geographic barrier will be manageable, but it will be much less so or the goods sector, particularly for food, where UK and EU tariffs and standards may diverge. Assurances on the permanent arrangements this point from the UK will be a key point for Ireland in any framework for a future relationship that might be agreed with the UK.

The potential cultural gap between Ireland and the rest of the EU is of equal long term significance. Irish people consume their news through English, and what we see that the English language media about the EU is dominated by suspicious, and often under informed, Anglo Saxon notions about Europe, which go back hundreds of years. Yes, many Irish people do read French, German and Italian papers too, but they are in a minority.

In this context of avoiding cultural isolation, there are two of the aspects of President Macron’s excellent Sorbonne speech, which I especially welcome.

One was his setting a goal that all students should speak two EU languages by 2025.

The second one was and all EU 25 year olds should, by 2015, have been assisted to spend six months working in another EU country. This could be described as an “Erasmus for All”.

In practice, in the Irish case as far as language is concerned, that means being able to speak English and a continental European language as well.

If President Macron’s suggestion is taken up by the EU, each EU country should be benchmarked between now and 2025 on how far it is from the 2025 goal and EU funds allocated on a results basis.

As the European Parliament starts work on the next seven year budgetary perspective, it should allocate substantial funds to these goals and to the broader cultural unification of the European Union. We need to build a strong European Union sense of identity among people to go alongside their already strong national and regional identities.

The Erasmus for all idea is particularly important. Ultimately, in building the European Union, we are aiming to build a sense of shared identity among the peoples of this vast continent.

Among the minority of university students who have benefitted from Erasmus, I believe that has been a great success. But these students are part of an elite, and many are drawn from socio economic groups that that are pro EU anyway.

Extending the opportunity of Erasmus across the entire under 25 population would widen horizons for young people, and create a sense that the EU does good for everybody, and not just for the upwardly and outwardly mobile section of the community.

I hope the fact that educational policy is a primary function of the member states ( and in some cases of regions) will not be allowed to be an obstacle to action by the EU on these two activities, from which Ireland could gain, and from which Ireland needs more than most, because of the separation from the EU that Brexit will otherwise create.

BUILDING A COMMON EUROPEAN PUBLIC OPINION

It is said that Brexit will also create something of a political barrier between Ireland and the rest of the EU.

The absence of the UK at the table will create some difficulties on some regulatory issues, but even in my time in government, I felt that UK Ministers were beginning to disengage psychologically from the common EU goals, and to adopt a purely transactional, issue by issue, approach. If everybody had done that the EU would not last long.

The isolation of Irish public opinion from some of the thinking and ideas on the future of Europe in other countries is relevant. It is natural that different countries want different thing from the EU, and their needs will change over time. How much thought do Germans give to Greek public opinion about the EU, or vice versa? What Estonia expects of the EU will differ from what France expects.

If the EU is to work, voters in each country need to begin to understand, and take into account, the public opinion in other EU countries, and not just in their own.

We cannot just leave the job of building that better understanding to Ministers and diplomats alone.

One way of making the public opinions of all 27 member states aware of the public opinions in the other 26 states would be to have a genuine European Election for some of the seats in the European Parliament. This could be done by allocating the seats, soon to be vacated by UK MEPs, to a single constituency to elected on an EU wide basis. These seats could be filled from lists led by prominent figures who would have to campaign in all 27 EU states, and whose electoral programmes would have to be informed by the thinking in all of them too. It would harness democratic competition to build a shared understanding across national boundaries.

SECURITY THREAT AFFECT US ALL

In his speech, President Macron laid great stress on the security threats facing Europe, from terrorism of which France has had more than its share, and from the inevitable, if gradual, disengagement of the United States from European military security. He also raised the threat to EU security from civil wars in our neighbourhood and the resultant refugee flows.

As an island of an offshore island, Ireland has been able to take more relaxed view on some of these matters.

But there are fewer and fewer threats nowadays, from which the sea is a sufficient protection.

Cyber attacks can be used to disable critical infrastructure, to alter medical records, to spy on personell files and thus to create opportunities for blackmail.

As a highly internationalised high tech and service economy, Ireland is vulnerable to these threats, especially now that so much of our energy supply will come to us through a non EU member state.

Ireland should work to through the EU and Partnership for Peace to strengthen its cyber defences. President Macron envisaged a European Intelligence Academy, which is also something from which smaller EU states could benefit.

WORKING CONDITIONS

This conference is concerned with working and living conditions. These will come under increasing stress as our population ages, and as proportionately fewer people of working age find themselves having to pay for the health and pension entitlements of a ever increasing retired population.

Germany, the dynamo of the EU economy at the moment, will be hit by this problem sooner than most of us. The median age in Germany is 47, whereas the median age in the US is 38, and that affects relative dynamism. Like Italy it is getting older faster, and this is not fully taken into account by some commentators when they look to Germany to loosen its purse strings for the good of Europe.

President Macron suggested a European Labour Office to help achieve fair and equal pay for the same work. I expect your discussions here today will have made suggestions as to what this office might do.

He also recognised the competitiveness challenge that the EU economy faces.

THE NEED FOR INVESTMENT

Competitiveness is enhanced by investment, more so even than it is by wage restraint. In the past ten years in Europe, we have had wage restraint, but not enough investment.

One area of investment for the EU is the electricity grid. If renewable energy is to replace fossil fuels, we will have to greatly enhance our electricity grid across the EU quickly, and in a cost effective way. Ireland has something to learn here.

We will also need to ensure that the EU is in pole position in R and D. That is not the case now. Rand D spending is 2% of GDP in Europe as against 2.8% in the US and 3.5% in Japan.

The spin off from R and D is best if it takes place in clusters. These clusters are usually around big cities, where people can move from job to job, without moving house. And Europe has no technological clusters of this kind, whereas the US had two or three.

President Macron suggested the following, and I quote

“ I want Europe to take a leading role in this revolution through radical innovation. I propose that, over the next two years, we create a European agency for disruptive innovation in the same vein as the Defense Advanced Research Projects Agency (DARPA) in the United States during the conquest of space. This must be our ambition. Today, we have a unique window to do it. We must drive this ambition, finance research in new areas such as artificial intelligence, and accept risks. Such an agency would make Europe an innovator and not a follower.”

Objections will be raised to this.

Is a European Agency the best body to pick winning technologies? Will it become prey to national rivalries within Europe? Will firms that have non EU parents, of which there are many here, be eligible to participate?

But the idea is forward looking and its adoption would suggest that Europe is awake to the challenges of the modern world.

INCOME INEQUALITY

Another theme at the conference here today is the growth in income inequality across the world, not just in the west, but also in Socialist China. This divergence has been most rapid since 1988

The European Parliament’s Global Trends Report 2035 puts it this way

“Economic inequality has grown in the United States and Europe for most of the last thirty years in real terms and in political salience. The gap between the rich and poor was described as a “very big problem” by a majority of respondents in France, Italy, Spain, and Greece in a 2014 Pew survey.”

They measured this by comparing the share of income earned by the top 1% with the rest of society. From 1949 to the mid 1980’s that share actually fell slightly, but, since 1988, the gap has widened.

Of the countries surveyed the growth in inequality has been fastest in the United States and the UK, but significantly less in France , Netherlands and Sweden. I believe Ireland would be somewhere in between.

The factors causing increased inequality are identified, by IMF researchers ,as

technological change,
globalisation,
less union protection and
tax policies.

Their view is that this problem will not solve itself over time. In fact it could get worse. New technologies, like artificial intelligence and driverless cars, will hit lower income jobs first.

A big challenge will be designing a combination of tax and social security measures that mitigate inequality without leading to the flight of capital and talent from the countries that take a lead in this field. I do not see the EU taking a prescriptive lead in this matter, but I do believe it should disseminate best practice.

It should also use its competition and state aid policies to ensure that the tax base is as wide as possible. The wider the tax base the lower can be the tax rate.

CAN EU POLICY MAKING BE IMPROVED?

I would like now to say a word about how the EU sets is policies.

Increasingly the agenda of the EU is being set by the 28 or 27 elected Heads of State and Government (HOSG), rather than by the European Commission, as might have been envisaged with the Monnet method.

This is because HOSGs face their electorates in way that Commissioners do not, and because much of the EU’s work combines EU and national action.

But there is a disadvantage, in that HOSG’s are part time Europeans. They have heavy domestic agendas. With 28 of them around the table, it must also be very difficult to brainstorm and avoid the tyranny of a pre set agenda.

Commendably, the Council President Tusk has set out a detailed rolling agenda for all the meetings right up to June 2019.

That gives civil servants time to prepare, but does it allow Leaders enough time to think?

Thankfully President Tusk has also increased the frequency of meetings, and that will give HOSGs more time to think together about the longer term issues.

THE EURO

Finally I will say a word about the euro. A lot has been done to underpin it. But private and public debt levels are still considerably higher than they were before the 2008 crisis.

I do not believe the EU needs an ongoing transfer union to underpin the EU. Transfers are already reaching 4% of GDP in some recipient countries.

But a facility is needed to help euro member countries that are hit by an asymmetric shock (a big migration surge, a technological shock, or even Brexit).

Some form of temporary top up from EU funds for Unemployment Relief might help.

A Limited form of European Bank Deposit Insurance would be good. It should be combined with a restriction of banks buying too many of their own countries bonds and thereby creating the risk of banks dragging down their own governments if they get into difficulty.

It is much better to allow the markets to discipline governments that borrow unwisely through interest rate differences than it would to try to achieve the same goal by threatening fines after the country that is already in trouble.

CONCLUDING REMARKS

I thanks Eurofound for the contribution it has made to the EU since 1978 .

I pay tribute to our late President Paddy Hillery, whose initiative Eurofound was when he was Commissioner for Social Affairs.

I hope the deliberations today will help make a big success of the Social Summit of the EU in Gothenburg next week

Speech by John Bruton, former Taoiseach and former EU Ambassador to the United States, at the Gala Dinner of the Eurofound Forum in the State Rooms, George’s Hall, Dublin Castle at 7.30pm on Tuesday 12 November

WHY I BELIEVE THE UK SHOULD STAY IN THE EU

By John Bruton

On May 29, 2016

In BREXIT, Europe

Stonyhurst College

THE EU IS A VOLUNTARY UNION

The fact that the British voters are free to have a referendum, and free to decide to leave the
European Union shows that the European Union is a voluntary Union.
It is not an Empire, which something a country would not be free to leave.
Nor is it a Federal Union like the United States, which does not permit its member states to leave either.
The EU’s voluntary character is one of the reasons why a number of states are still looking to join the EU.

THE FIRST TIME IN 60 YEARS ANY COUNTRY HAS CONSIDERED LEAVING

The 23 rd of June 2016 will, however, be the first time in the EU’s 60 year history, that any state has contemplated leaving.
This is a serious matter not just for Britain, but for all the countries of the EU.
So British voters, acting as as citizen legislators on 23 June, ought to think of the risks, that a British decision to leave might create for neighbouring countries in the EU, like Ireland. Voters here in Lancashire need to think about the consequences for peace in Ireland of the deepening of the border in Ireland that would flow from a Brexit decision on 23 June.

They also should consider the risk that Britain deciding to leave would create a precedent that would weaken the bonds that hold the remaining 27 countries together. The Parliament in Westminster has passed to voters the responsibility for deciding if a possible breakup of the EU would really be good for Britain, and for Europe too. It is a big responsibility.

STABILITY IN EUROPE HAS ALWAYS BEEN IMPORTANT TO BRITAIN

Stability in Europe has been a long term British goal.
Edmund Burke in the 1790’s favoured a Commonwealth of Europe.
Castlereagh worked for a Concert of Europe, with regular Summit meetings like the EU now has, after the end of the Napoleonic Wars.
Winston Churchill, in 1930,advocated a United States of Europe.
These statesmen did not advocate these ideas out of some sort of dewy eyed sentimentalism. No, they had a hard headed appreciation of the fact that stability on the continent meant greater security for Britain, and they made their suggestions to achieve that end.

Now it is British voters, not British statesmen, who must decide what is best for Europe,

+ a Union with Britain on the inside, or
+ a fractured Union, which Britain has left of its own free will.

BREXIT COULD DOUBLE THE REGULATORY BURDEN

We hear much about EU Regulations and the burdens they impose. But even if Britain left the EU, it would still have regulations of its own on things like the environment, financial services and product safety.

In fact, to the extent that a Britain that had left the EU wanted to sell goods or services to Europe, it would have to comply with TWO sets of regulations,

+ British regulations for the British market, and
+ EU regulations for the EU market, including Ireland.

Arguably the duplicated post Brexit regulatory burden on British business would be greater than the present one.

A UK/EU TRADE DEAL COULD TAKE YEARS TO NEGOTIATE

Some believe that the UK could leave the EU, and then quickly negotiate a free trade agreement which would allow British firms to go on selling in Ireland and the other EU countries.
I am sure an agreement of some kind could eventually be worked out, but it would not be quick.
Switzerland negotiated trade agreements with the EU, but that took 9 years.
Canada negotiated a Free Trade agreement too, but that took 7 years.
The British Agreement would be much more complicated than either of these, because it would involve new issues like financial services, and freedom of movement ,and access to health services, for example for Britons in Spain. It would have to cover agriculture.
Even with maximum goodwill from the European Commission, a post Brexit EU trade agreement with Britain would become prey to the domestic politics of the 27 remaining EU countries, each of whom would have their own axes to grind.
There would be a lot of uncertainty, over a long period.

STAY IN, AND MAKE EU BETTER

I believe British people should accept that entities like the EU, which provide a structure, within which the forces of globalisation, can be governed politically are essential, if the prosperity that flows from globalisation is to be shared fairly.
Rather than leave, Britons should consider how they can make the EU better than it is, and there is plenty of scope for that.

Speech by John Bruton, former Taoiseach of Ireland, in Stonyhurst College, near Clitheroe in
Lancashire on Sunday 29 May at 5pm