Ireland set to vote a grudging yes on Fiscal Treaty

Ireland is set to vote in no less than its ninth European referendum next week. As they have done in the previous eight, the major two parties are supporting the yes vote. But as in the past, this is no guarantee the ayes will have it. This is because like many of the previous ones the issue on the table is obscure and Austere Ireland has long since lost its romance with Europe. Those supporting the treaty have issued dire warnings of a “no” vote. 

The latest vote is on the Treaty on Stability, Coordination and Governance in the Economicand Monetary Union more commonly known as the EU fiscal compact or EU fiscal treaty. The treaty tries to put in place a number of measures to get EU countries to balance their books and put an end to excessive borrowing.  Ireland is one of the worst offenders though is slowly on the mend. The Irish economy has stabilised after three years of contraction. The European Commission forecasts a GDP rise of 0.5% this year and all the quarterly fiscal targets under the bail-out program have been met.

Ireland needs a constitutional change to ratify the compact.  Article 29 of the 1937 Constitution deals with international relations.  Article 29.4 has been modified a number of times to signify the various EU treaties Ireland is a signatory to. If passed, the 10^th subsection of Article 29.4 of the Constitution will add a clause to the effect that: “The State may ratify the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union done at Brussels on the 2nd day of March 2012.”

Irish Broadcaster RTE has published a detailed breakdown of the 16 articles of the treaty and how they affect Ireland. The key article is Article 3 which sets out the requirements how to run balanced or surplus budgets and how it will be monitored and reinforced. The article defines an upper structural deficit of 0.5% of GDP where a structural deficit is defined as one where an economy is losing money despite operating at full potential.

Each country must meet a medium term objective which is a program of action to reduce their debt. The original Maastricht Treaty had a Stability and Growth Pact which had targets for public debt which had to be supported by annual programs. It had a 3% rule for budget deficits but it went out the window after both heavyweights Germany and France breached the upper limit in 2003-2004.

That caused a rule change in 2005 to make it more flexible. Many countries hid the true extent of their budget situation – none more so than Greece so that by the time the truth emerged the damage was done. In response, the EU introduced the Six Pack in 2011 of five regulations and one directive and the Fiscal Compact builds on this. The Six Pack has strict enforcement of debt limits with countries subject to monitoring and penalties for breeches. These penalties would kick in earlier before countries could no longer afford to pay them. It also clamps down on property bubbles and makes it easier for countries to vote for sanctions against those who break the rules.

The Six Pack had an upper structural deficit of 1.0% of GDP which the Treaty reduces by half. Those against it such as Sinn Fein have dubbed it the Austerity Treaty. Party president Gerry Adams said it surrendered “significant control of Irish fiscal and budgetary matters to unelected and unaccountable EU officials.”

Those in favour have issued the usual warnings to the consequences of a no vote. Sean O'Driscoll, chairman of the Glen Dimplex manufacturing group said failure to support the treaty would mean Ireland leaving the euro. “Ireland signed up to the currency in 1999 [and] that brought rules – rules which we broke by allowing our economy to become inflated,” he said. “We now need to stay within the system and we need to argue our case within the system.”

The Economist described the referendum as a battle between conflicting emotions among voters. “The fear of many that rejecting the treaty will mean no access to EU finance, potentially sending Ireland hurtling down the Greek path to ruin, against the anger of many about the hardship imposed by four years of austerity,” The Economist said. But in the knowledge that Ireland has grudgingly supported all the other recent Treaties, the Economist was prepared to grant a narrow victory to the “yes” vote. “At the moment it looks as if fear will trump anger,” they said.

Estonia defies critics to join the euro zone

While it might seem bizarre given Greece’s current troubles, other European countries are still keen to join the euro zone. Yet just this week the European Commission has given its blessing to Estonia to take up the common currency. The commission announced yesterday that it would recommend that EU governments let the Baltic country switch to the currency in January 2011. Estonia, which currently uses the kroon, would become the 17th nation to adopt the euro. The announcement was accompanied by a report showing eight other EU countries do not yet satisfy the conditions for euro area membership - Bulgaria, the Czech Republic, Latvia, Lithuania, Hungary, Poland, Romania and Sweden. (photo by tm-tm)

Estonia meanwhile was also invited this week to join the Organisation for Economic Cooperation and Development alongside Israel and Slovenia bringing its membership to 34 countries. All three countries were reviewed by 18 OECD Committees with respect to their compliance with OECD standards and benchmarks. OECD Secretary-General Angel Gurría said Estonia has been receptive to OECD recommendations on important issues. “The OECD accession process has delivered real policy changes and reform in all candidate countries,” Gurría said. “Once countries become members, this transformational process continues.”

There is little doubt that Estonia has undergone an astonishing transformation in the last 20 years. After a 51 year absence, it returned to the world map in 1991 as an independent country during the collapse of the USSR. According to The Economist Estonia confounded its critics in the years that follow. It had a fast-growing economy, based on flat taxes, free trade and a currency board. In 2004 it joined the EU and NATO. Despite property values collapsing last year, the economy stabilised with the help of flexible wages and prices. It said Estonia was one of two EU countries (with Sweden) that met the common currency’s rules.

The European Central Bank has issued a cautionary note offering amore negative assessment of Estonia’s qualifications. It says that while Estonia is well within the limits on government spending and debt, the country’s current low inflation rates reflect mainly temporary factors. The ECB says Estonia has a history of high inflation that raises concerns. “Maintaining low inflation rates will be very challenging given the limited room for manoeuvre for monetary policy,” said the ECB. “Once output growth resumes, with a fixed exchange rate regime, the underlying real adjustment is likely to manifest itself in higher inflation.”

However the ECB did not explicitly say that Estonia should be denied and its opinion is not binding on the final decision makers, the EU governments. The New York Times said political leaders have form in brushing brushed off central bank concerns in their eagerness to expand the zone. “Greece won admission even after the central bank reported in 2000 that the country’s debt equalled 104 percent of gross domestic product, far above the limit of 60 percent in the Maastricht Treaty,” the NYT said. That decision has of course rebounded on the EU as it embarks on a $106 billion rescue of Greece’s wrecked economy in conjunction with the IMF.

Estonia has no such worries at the moment. Its inflation rate is 2.9 percent and its economy has rebounded out of the GFC with expected growth of 1 percent in 2010. BusinessNewEurope said judicious use of reserves accumulated during the boom years means government debt levels are currently the lowest in the EU. It also said the country’s pioneering adoption of a flat-rate tax system in 1992, combined with the "safe haven" label that membership of the Eurozone confers (Greece notwithstanding) “should make Estonia an interesting investment destination in the future.”

The Estonian finance minister has been playing down negative impacts of the euro to his country. Jürgen Ligi said that there is no real danger of the euro bringing major price increase to Estonia despite the temptation of traders to round prices up after the conversion. There will be parallel posting of prices in both euros and kroons for the obligatory six months before adoption of the euro. Ligi said that the country’s planned sales tax might mess up things but general studies show that “we don’t have the room for price increases for anything substantial to take place”.

Estonia has two more hurdles to jump before it is confirmed as a member. An EU committee meets at the end of May to discuss the move, followed by a finance ministers’ summit in early June for final confirmation. By January next year they will join the 329 million people that use the euro every day, nearly two-thirds of the EU population.

Europe and Australia more worried about passport fraud than Mossad murderers

While the much-publicised hunt continues into the Dubai fake passports affair, no European country has yet launched a manhunt for the killers of the Hamas man slain in the Gulf state despite an Interpol investigation into the crime. Mahmoud al-Mabhouh was murdered in Dubai on 19 January by Mossad operatives who then fled across Europe. The men are believed to have flown to Switzerland, Italy, France, Germany and the Netherlands but none of the authorities of these countries have launched investigations. AP say this is because the hit was carried out by a friendly country and arresting Israeli agents or even digging up evidence that Israel was involved could be politically costly. "I would guess that it's in the political interest of certain countries not to get proactive in this case," said Victor Mauer, deputy director of the Centre for Security Studies at Zurich's Federal Institute of Technology.

The countries also say they have yet to receive a request of help from Dubai about the case. The murdered man Mahmoud al-Mabhouh was a senior Hamas commander. He was also one of the founders of the Qassam brigades which were responsible for the capture of Israeli soldier Gilad Shalit, and in the subsequent heavy fighting in the Gaza Strip following Israel’s incursion in December 2008. Al-Mabhouh was born in Gaza in 1960 and has been known to Israeli authorities since as far back as 1989 when he was involved in the abduction and murder of two IDF members. He has been the target of two previous assassination attempts: a car bombing and a poisoning. The poisoning took place in Beirut just six months ago and rendered him unconscious for 30 hours.

In recent years al-Mabhouh was a key negotiator between Hamas and Iran. On 19 January he flew from Syria to Dubai stopping off there on his way to Bangkok. He arrived in the early afternoon without bodyguards and booked into the Al Bustan Rotana hotel using a false identity. He left the hotel an hour later and returned around 8.25pm that evening. It was likely he was being tailed during his absence. His wife rang a half hour later but there was no answer. Israeli news agency Inyan Merkazi reported a four-member squad of Shin Bet and Mossad agents interrogated al-Mabhouh before executing him. Dubai Police say he was dead by 9pm. Hotel footage show suspects following him to his room in the afternoon before checking into the room opposite. Around 8pm they gained entry to his room and waited for his return.

Al-Mahmoud’s body was found the following morning and taken for a police examination. Burns from a stun gun were found under his ear, in his groin and on his chest. Pathologists discovered his nose bled before death. They found blood on a pillow they believe was placed over his nose and mouth to suffocate him. Results from a preliminary forensic report by the Dubai police found that al-Mabhouh was first paralysed via electric shock to his ears, legs, heart and genitals and then suffocated. Dubai police identified 11 people they suspected of involvement in the murder. Five of them carried out the crime while the remaining six served as lookouts. Another four were later added to the list and they all travelled on fake Western passports, six UK, five Irish, three Australian, one French and one German. The fact that many of the passports share names with people living in Israel reinforced widespread suspicion about Mossad involvement.

Reaction in the west to al-Mahmoud’s killing was initially muted. The subtext was here was a known terrorist who was simply getting his just desserts. But reaction quickly changed once it became apparent that Israeli agents used western passports in the hit. Foreign ministers of all the countries involved complained to Israel about the identity theft involved. The EU called the nature of the killing “profoundly disturbing”. Australian Foreign Minister Stephen Smith was also distinctly uneasy in criticising Israel but said it would not be considered the "act of a friend.”

UK Police are now in Israel investigating the passport theft. There they will interview six British-Israeli nationals whose identities were stolen by the suspected killers. Officers say they are being viewed as potential witnesses to a crime, which is the fraudulent use of a passport, and will not be questioned or interviewed as suspects. British authorities say they believe the Israeli secret service Mossad was involved which Israel has refused to confirm or deny.

In a penetrating article in New Matilda last week, Mark Steven skewered western reaction to the crime. Steven said the West’s response to the assassination was simply the result of their principal and shared interest in the expropriation of national identities rather than a horror of al-Mahmoud’s death.” While assassination is condemnable, it seems the requisition of a European or an Australian identity is utterly unforgivable,” he wrote. Stevens asked the question: “While life that coheres behind names printed on European passports is to be valued highly, what is the worth of life that only exists under collective labels, such as ‘Israel’ or ‘Palestine’?”

Public service workers strike in Greece as austerity measures kick in

Greek public service workers have launched a nationwide strike in protest at government measures to tackle the country's crippling budget deficit. The strike has affected airports, schools, hospitals and government offices across the country as workers fight government attempts to freeze pay, impose taxes and reform pensions. It is the latest headache for beleaguered new socialist Prime Minister George Papandreou who had had to deal with a three-week protest by farmers demanding higher government subsidies. This week he has raised the average retirement age, frozen public sector salaries and increased taxes on petrol.

Greece's deficit currently stands at 12.7 percent which is four times higher than eurozone rules allow. Its debt is soaring towards half a trillion dollars with markets sceptical the country will be able to bail itself out. There is a strong possibility that Greece, Spain or Portugal will default on its debts and require them to either abandon the euro or get an EU bailout. European governments have agreed in principle to support Greece and are considering various options, including bilateral aid. German self-interest to keep the euro zone strong is likely to lead to an aid package from Berlin. It is also arguable Germany has a duty of care. Greece's troubles originated when low interest rates that were inappropriate for Greece were maintained to rescue Germany from an economic slump.

If the eurozone does not come to the rescue, a more desperate option would be to turn to the International Monetary Fund. The IMF has helped other eastern European countries like Latvia and Hungary in 2009 but it hasn't had to intervene in the eurozone. This would be a blow to the euro’s prestige and significantly the only support from the idea is coming from non-euro countries such as the UK and Sweden. Former Bank of England policy maker Charles Goodhart said that while such a move would be a precedent, the amount of money required to rescue the Greek fiscal position is relatively minor. “I would ask the IMF to come in,” he said. “From the European point of view, it’s the least bad option.”

There are also untested legal issues to deal with as there is no clear procedure for bailing out a euro zone economy. Article 122 of the EU treaty says the EU Council can decide "upon the measures appropriate to the economic situation", but should be used only if severe difficulties arise in the supply of certain products, notably energy. The treaty also states Council may grant, under conditions, financial assistance to a member state, if that state "is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control".

The problem is that it was the difficulties were not beyond Greece’s control. The Greek deficit got out of control due to a mixture of incompetence and deceit. Successive Greek governments had managed to pull the wool over the eyes of Brussels’ bureaucrats until the new Pasok Government doubled the projected GDP deficit from 6 to 12 percent late last year. Greece needs to raise almost $100 billion this year to refinance existing debt and keep paying salaries and pensions. Because most of that is front-loaded into the first six months, the government plans to raise 40 percent of it by April whatever the cost. To bankers this smacks of desperation and ratings agencies reacting by downgrading Greece’s credit rating thus making their loans even more expensive.

What the issue is bringing to the table are inherent problems within the eurozone. The currency cannot be devalued because the same currency is used by 16 countries with economies in wildly differing states of health. That means that while Greece’s ability to repay is being crippled by austerity measures, there is no way to lower the cost of the debt. Cuts inflicted on the eurozone's weaker economies highlight a fundamental weakness: the lack of a centralised budgetary mechanism, such as exists in the US, to move resources as needed around the EU. Gerard Lyons, chief economist at Standard Chartered said if monetary union is to survive, it has to become a political union. “If it doesn't there is likely to be some sort of implosion and a move towards a two-speed Europe,” he said.

Belarus tiptoes towards the West

Belarusian president Alexander Lukashenko appeared to be making signals to the West when he said yesterday he would not immediately recognise the independence of South Ossetia and Abkhazia. The normally fiercely pro-Russian president also said he was in no rush to station weapons on Belarus’s western border in response to the US missile defence system to be based in Poland. Taken together the two statements reveal Lukashenko may be about cool relations with Moscow in order to do a deal with the US and the EU.

The EU is happy to encourage these signs that a tense relationship with the West may be on the mend. EU foreign policy head Javier Solana, noted that Belarus had taken the positive step of releasing a number of political prisoners. Solana talked about the EU “rewarding that behaviour”. Neighbour Poland has been at the forefront of the push for normalisation and wants Europe to remove sanctions it imposed on Belarus after a dubious presidential election in 2006 in which Lukashenko won with 82.6 percent of the vote.

While Lukashenko is showing no signs of loosening his iron-clad grip on Belarus’s polity, there are several indications he is about to come out from Russia’s warm embrace. Previously Lukashenko was at the forefront of calls to reunite Belarus with its large Russian neighbour, but now is backing away from that idea. On Monday he said recent events in the Caucasus meant Belarus’ joining the Russian Federation was unacceptable. “You know that there were such ideas in due time. Today many politicians acknowledge, though not out loud, that I was right,” he said. “This is absolutely not needed, either for Belarus or Russia. Otherwise, Russia will simply lose a reliable ally and a subject of international law.”

Belarus has relied on Russian gas to fuel its economy and annual imports 21 million metric tons of Russian crude. This is almost three times as much as it needs for its domestic economy. The surplus allows Belarus to refine the rest and sell the product at profit to the EU. However relations with Putin's regime have cooled since Russia ended subsidised oil and gas supplies last year. The new price, $100 per thousand cubic meters more than doubled the previous price of $46 and was exacerbated by a separate decision by Russia to impose a customs duty of $180 per metric ton on Russian oil. In response Lukashenko imposed a Belarussian transit fee on Russian oil bound for Europe.

Alexander Lukashenko has run Belarus on Soviet economic lines and was a dogged supporter of Russia, even proposing the two countries unite. He came to power in a landslide 1994 election. He deliberately played up to his pariah role in the west by cultivating relationships with the leaders of Iran and Cuba. Lukashenko is a dogmatic leader who harassed opposition voices and removed an awkward parliament in 1996. He rewrote the constitution four years later to favour himself by allowing presidents to serve three or more terms.

His authoritarian style was noted as far back as 1991 when he supported the coup against Mikhail Gorbachev as a then member of the Belarusian parliament. Since 2006, he has been in talks with Russia to form a “union state” But the happy relationship soured after Moscow demanded that Minsk pay market prices for its energy. The regime is now faced with crippling fuel bills and in need of new friends. Hence Lukashenko’s subtle overtures to the west. The US responded last week by suspending some economic sanctions against Belarusian companies. However other key sanctions remain, including the freezing of bank accounts of the state-controlled oil and chemical company, Belneftekhim. Lukashenko’s latest announcements may prove to be the key to defrosting the lucrative oil account in the west.

Lisboa Constrictors: the fallout of the Irish EU referendum defeat

For the second time in over a month, Ireland has shown a new and healthy disdain for the Eurocracy that infests the EU in its every manifestation. The defeat of Thursday’s referendum by roughly 53 percent to 47 means Ireland and the rest of the EU will not be ratifying the Lisbon Treaty in its current form. The result is a disaster for Ireland's political leaders and follows on from the Ireland’s “disrespectful” entry which the country voted for in this year’s Eurovision Song Contest. Both people-power events have brought about criticism that Ireland is treating venerable European institutions with contempt.

This is in many ways strange behaviour, as Ireland is far from being Europhobic. For the most part, Ireland does not mind EU rule and has done very well out of it. Having being in the past influenced by Rome and London in equal parts, Brussels is just another city-conqueror. And a seemingly more benevolent one. With previously poverty stricken Ireland’s standards of living now greater than the EU average, there is little serious desire for an anti-European change. Some have argued that fear of immigration caused the defeat, but it is simply more likely to be distaste for the autocratic rule of bureaucracy.

In fast order, Ireland’s one finger signals in the Eurovision Song Contest and the Lisbon Treaty referendum signals the end to a culture of kowtowing to Eurocrats. The spoof song of Dustin the Turkey and the referendum “no” campaign had a very Irish contrariness in common. And the country has always had that tendency in spades. Writer Colm Tóibín says the referendum was a godsend to “every crank in Ireland” left or right. Tóibín supported the treaty but also admitted it was unreadable and filled with legal terms and references to subsections of other treaties.

Politically, Europe has reacted with dismay to the “no” victory. All 27 European member states have to ratify the Lisbon Treaty by January 2009 for it to come into force. So far it has been approved by 18 members, but Ireland is the only country to put it to a public vote. Under pressure British PM Gordon Brown refused to honour Labour's manifesto pledge to put the document to a public vote and now faces a possible backlash as he scrambles to find a negotiated re-settlement that might exclude Ireland.

The British media has also reacted unfavourably to the Irish result. Writing in Spiked on the weekend, editor Brendan O’Neill argues that the concerted media attack on “ungrateful” Irish voters exposes the anti-democratic elitism at the heart of the EU. He quotes the Financial Times's outrage that despite receiving “£40billion in subsidies from Brussels” Irish voters might have the temerity to say ‘No’ to Lisbon, “probably because ‘they do not understand the Treaty’”. Other articles showed their exasperation that the entire fate of the Treaty for 490 million people depended on these pesky three million on the periphery of the action.

Perhaps these writers secretly wished they had a chance to vote down the treaty too. Guido Fawkes skewered the argument that the Irish experience was somehow undemocratic. He points out that as the only country in Europe to actually hold an election involving all of its voters, it was by far the most representative of the lot. Fawkes points out that the total number of parliamentarians in the EU’s other 37 assembly houses (11 bicameral and 15 unicameral) is 9,225. While three million were entitled to vote in Ireland, the fate of the other 490 million was placed in the hands of less than ten thousand people.

However, as Pete Baker points out in Slugger O’Toole, the motley coalition in the "no" camp should beware thinking the result is evidence of actual support for any of their differing agendas. Strict impartiality rules meant that both sides got equal airplay on RTE, the national broadcaster, and that allowed unrepresented groups plenty of time to spread an "extensive menu of anxieties". The result also shows the power of television as the print media was almost one hundred percent behind the “yes” vote.

Yet the politicians only have themselves to blame for failure. They never sat down with the voters and explained what was in it for them. The ruling Fianna Fail party was pre-occupied with the fallout of replacing its longterm leader and realised the danger of defeat too late. One civil servant, Martin Cunningham, told the Irish Independent his mind was made up once he heard Taoiseach Brian Cowen’s admission that even he was not fully briefed on the Treaty document. "Sure he said he didn't even read the thing himself,” said Cunningham. “I decided on my 'No' there and then.”

Last week the “no” side received another significant boost a day ahead of the poll. Dustin the Turkey, whose parody effort “Irelande Douze Points” sunk without trace in the Eurovision Song Contest semi final, explicitly failed to endorse the “yes campaign”. The Turkey apparently told the Irish Sun it preferred a third choice that just said: What? "That way they'd have to go back to the table,” he gobbled, “work out a proper way of explaining the thing, and people would know what it is that's on offer. Even without the “what?” option, it would appear the “no” victory has done exactly that.

Europe sweats on Ireland's Lisbon Treaty referendum

Polls have opened in Ireland at 7am local time this morning for a crucial vote on the EU Lisbon Treaty. New Taoiseach Brian Cowen is leading a desperate campaign to get out the “yes” vote as opinion polls show the result could go either way. All EU countries are required to ratify the treaty which was signed in Lisbon in December last year and Ireland is the only one of the 27 member states which is allowing its citizens to vote on the matter. The referendum is needed because of a 1987 Supreme Court ruling that any major amendment to an EU treaty requires an amendment to the Irish constitution. With the other 26 parliaments likely to rubberstamp the treaty, Ireland’s three million people will be the defacto decision-makers for the whole of Europe.

Because of this proxy vote factor, the Irish poll has attracted Euro-sceptics from across the continent to campaign for a “no” vote. They have been joined by a motley coalition of strange bedfellows opposed to the treaty. The Times calls them a “bizarre ragbag opposition of maverick businessmen, right wing Roman Catholics, socialists, communists, pacifists and anarchists.” They include minor political parties Sinn Fein and the Socialists; UNITE, the Irish arm of Britain’s biggest trade union and Libertas, a privately funded group set up to fight the treaty.

Libertas claims to be a pro European movement “dedicated to campaigning for greater democratic accountability and transparency in the institutions of the EU”. Chairman Declan Ganley appealed yesterday to Irish people to reject the Lisbon Treaty saying that a "no" vote would "send our leaders back to the drawing board". Ganley said the “yes” campaigners (which include the three main political parties, and most of Ireland’s business and media leaders) have given no good reasons to support the Treaty. “I hope, and I firmly believe,” he said, “that the Irish people will vote "No" tomorrow, and that the work can immediately begin on constructing a better vision of Europe for all its 490 million citizens".

Ganley makes a good point about the “yes” campaign. The Lisbon Treaty is a dense 230 page document which few people in Ireland or elsewhere have read or understood. Essentially it amends the two main existing treaties which govern the EU in order to make the governing of an expanded EU easier. These are the Treaty Establishing the European Community (more commonly known as the EC Treaty); and the Treaty on European Union (known as the Maastricht Treaty). The key changes involve bureaucratic matters such as the appointment of the president of the European Council, a smaller European Commission, a redistribution of voting rights, new justice powers and the removal of key national vetoes.

The Irish referendum question is asking citizens whether they want to change the nation’s constitution to: a) allow Ireland to ratify the Treaty of Lisbon; b) allow Ireland to agree to certain decisions in the area of Freedom, Security and Justice in future with the approval of the Irish parliament; c) allow Ireland to agree at the European Council to certain changes in the EU treaties which might require further referenda or parliamentary approval and d) continue the present arrangements for Ireland’s military neutrality.

If the “no” vote wins, it will be the second time this decade Ireland has scuppered an EU treaty. In 2001 Irish voters rejected the Treaty of Nice (pdf) which prepared the ground for EU enlargement. A second vote was required two years later to pass the treaty including a new clause clarifying Irish neutrality. Many voters are just as concerned and bewildered this time about being railroaded into agreeing with something they don’t understand.

A rejection would mark an embarrassing setback for new Irish leader Brian Cowen. Cowen took over the top job after the surprise resignation of long-term Taoiseach Bertie Ahern in April. Since then Cowen has focussed his attentions on convincing the electorate to support the treaty. Cowen is known for his blunt speaking which has earned him the less than flattering nickname “Biffo” (Big Ignorant Fucker From Offaly). A defeat for the referendum would represent a personal defeat for Biffo and a serious blow to his authority as he tries to steer Ireland through some tough economic times ahead. Cowen and the rest of Europe will have fingers crossed as they watch the counting of the vote which takes place tomorrow.

Historic EU-Africa summit ends in Lisbon

The two day summit in Lisbon between EU and African leaders has ended in dispute over trade and human rights issues despite the two sides signing a “declaration” promoting free trade and democracy. Over 70 European and African heads of state gathered for the first inter-continental conference in seven years and produced an ambitious action plan covering issues as diverse as immigration and climate change.

The summit had the ambitious goal (pdf) of promoting a common agenda on political and economic issues, common positions on international conflict and promoting better representation of African interests in international institutions. The conference identified eight partnership opportunities in peace and security, governance, trade, developmental goals, energy, climate change, migration and science. But it was trade which proved to be the biggest hurdle.

The nub of the trade problem is the Economic Partnership Agreements (EPAs) proposed to replace existing agreements due to expire at the end of the year. Anti-poverty groups have criticised EPAs for failing to provide protection for Africa's poor farmers and its fragile industry. ACP countries are unlikely to gain better access to the European market but will see their local industries put under severe strain by competition from cheap and subsidised European imports. The European Commission's own impact assessment notes that, ‘EPAs could lead to the collapse of the manufacturing sector in West Africa’. The EU threatened to withdraw African tariff-free access to European markets under rules laid down by the World Trade Organization if they didn’t agree to the EPAs. Nonetheless President Abdoulaye Wade of Senegal was emphatic. “We are not talking any more about EPAs, we've rejected them,” he said.

A total of six EPAs were being negotiated, on a regional basis, with groups of countries in West Africa, Central Africa, Eastern and Southern Africa, the Southern African Development Community, the Caribbean and the Pacific. As well as tariff issues, Africa is not happy with the EU's insistence on tying aid and investment to improvements in democracy and human rights. Africa's negotiating position has been strengthened by its growing relations with China and the loans they offer on a ‘no conditions’ basis.

The EU remains Africa's largest commercial partner, with trade total more than $315 billion in 2006. But EU officials and businessmen fear growing Chinese investment in Africa. Beijing held a summit for 45 African leaders last year to celebrate a tenfold increase in China’s trade with Africa. While China has massively increased its investments in Africa, it conveniently does not comment on issues such as democracy and human rights. As the Times states: “[China does] not threaten to arrest their ministers and haul them before the International Criminal Court for war crimes. They do not hector Mugabe or demand that [Sudan's president] Bashir accept UN troops. They just want to buy oil.”

The main focus for Human rights issues in the EU Summit centred around the appearance of Zimbabwean president Robert Mugabe. British PM Gordon Brown had stayed away from the conference in protest at Mugabe’s presence. After being criticised by German chancellor Angela Merkel who was backed up by the Netherlands, Denmark and Sweden, Mugabe denounced European critics of his government as being ill-informed stooges of Britain, the former colonial power in Zimbabwe. Mugabe retains the support of his fellow African leaders. In a closed session, he called his European critics "Gordon's gang of four” but otherwise kept a low profile at the conference refusing to speak to the media.

Away from human rights, there was progress on climate change, which is among the most serious threats to African stability in the next few years. The threat takes the form of floods and droughts and their effects on food security and water management. One ambitious project discussed at the summit involved establishing a "green wall" around the Sahara desert to push back desertification. That would take the form of large dams, water collection areas and tree-planting.

Immigration is another highly contentious area with the EU committed to the “blue card” plan aimed at attracting highly skilled workers to replace its own rapidly ageing work force. However that is unlikely to resolve the biggest issue between the EU and Africa: the wave of illegal immigration. Spanish PM Jose Luiz Zapatero said Europe and Africa had to work together to boost education, employment and infrastructure in Africa to stop the flow of illegal immigrants. Spain is the worst affected country with 31,000 arriving across the straits each year. Zapatero said the problem “produces citizens that are vulnerable to human trafficking, abuse and without any rights in the countries of destination." Libyan president Gaddafy said this was a problem of Europe’s making. "Either you give us back our resources or you invite us in your countries,” he said.

The conference also re-iterated the Cotonou Agreement with sub-Saharan Africa, despite the EU desire to replace it with the EPAs,. Signed in Cotonou, Benin in 2000, the agreement outlined five pillars in the fight against global poverty: an enhanced political dimension, increased participation, a more strategic approach to cooperation focusing on poverty reduction, new economic and trade partnerships and improved financial cooperation.

Despite the many disagreements, hosts Portugal was upbeat about the impact of the summit. The event was the top priority of Portugal’s six-month presidency of the EU, and they spent €10m staging the two-day event. José Sócrates, the Portuguese prime minister said optimistically the conference would help dispel colonial guilt and resentment, and would lay the foundation for a new relationship between the EU and Africa. Although Portugal’s colonial record in Mozambique and Angola was appalling, the Portuguese Prime Minister was keen to stress his country’s long-standing involvement in African affairs. “It was from Lisbon that Europe first came to know Africa,” said Sócrates. “Now in the same city the two continents are renewing their relationship.”

Ireland may block EU treaty

Ireland is likely to be a major stumbling block to the ratification of the EU’s new treaty after an opinion poll this week found just 25 per cent of people supported the new treaty. While only 13 per cent were opposed, a massive 62 per cent of those polled by the Irish Times were indifferent or unsure of their opinion. The poll is significant because Ireland is the only one of the 27 member countries that is constitutionally bound to subject the treaty to a referendum.

All the other member states require support from the national parliament only. Irish foreign minister Dermot Ahearn said the poll showed the government could not take support for granted and talked up the merits of the treaty. “It will be about Ireland's future in Europe," he said. "I am confident that the Irish people will reaffirm their commitment to Ireland's proud place at the heart of the union."

The treaty is planned to be signed on 13 December in Portugal with ratification to follow in calendar year 2008. Ireland has yet to schedule the referendum but it is most likely to be held in May or June next year. The referendum is likely to attract ‘no’ campaigners and Eurosceptics from across the continent. All the major parties within Ireland itself support the treaty. This includes the Greens who opposed the last EU referendum, but now support this one from their position of government coalition partners.

Fine Gael Opposition leader Enda Kenny blamed the governing Fianna Fail party for the loss of public support citing the secrecy of the negotiations. They have negotiated the treaty in secret, with virtually no public debate or consultation," he said. "Nothing has been done to provide the Irish people with information about the provisions of the treaty or to explain its importance for the future of Europe."

The last EU treaty was delayed for years when Irish voters rejected it in a 2001 referendum. Ireland rejected the Treaty of Nice (pdf) which prepared the ground for EU enlargement. The Treaty of Nice was adopted by the EU to amend two earlier treaties the 1956 Treaty of Rome (which established the then-Common Market) and the 1992 Maastricht Treaty (which led to the creation of the euro). Nice’s purpose was to reform the EU’s institutional structure in the face of the significant enlargement from 15 to 25 countries in 2004. Ireland rejected the 2001 version in a poor 35 percent referendum turnout by 54 to 46 percent.

A second Irish referendum in 2003 reversed that vote, after the insertion of a treaty clause clarifying Irish neutrality. In this plebiscite, there was a concerted campaign to get out the vote, which increased to 48 per cent. It was passed with 63 per cent of the vote. In other words, the number of people voting “no” was roughly the same as 2001, but the “yes” vote was greatly increased. This was after a concerted effort by the major parties not to repeat their “limp” campaign of 2001. 39 per cent of those surveyed (ppt) who voted no in 2001 said the reason they did so was because of “lack of information”.

A similar education campaign may now be required in Ireland to see the new referendum get over the line. The new treaty is designed to reform the EU after the failed ratification of the European Constitution which was rejected by French and Dutch voters in 2005. The EU heads of government signed the Berlin Declaration (pdf) in March this year setting out an ambitious path forward to achieve unity.

While the Declaration does not mention the treaty by name, there was no doubt that this was then-EU President and German Chancellor Angela Merkel’s aim. She said updated rules and institutions were essential to ensure the Union retained “the capacity to act”. Germany wants a new treaty to salvage parts of the constitution to include a new EU president and foreign minister and simplified voting rules. They are also likely to propose new sections on topical issues such as climate change and energy. While France and the Netherlands are unlikely to place the fate of the treaty in their voters hands again, Ireland and its tricky constitution will once again become the barometer for the future health of the EU.