Ireland against the rest: The gloves are coming off

 

Every European newspaper covers the mess left by the Irish referendum, and the inevitable differences of views expressed by politicians. The Irish Times leads with a story that PM Brian Cowen says there is no obvious solution to the crisis. Frankfurter Allgemeine says that Cowen reacted shocked at suggestions by German foreign minister Frank-Walter Steinmeier that Irland should opt out of the European integration process. Today, foreign ministers are meeting in Luxembourg to discuss the crisis. Nicolas Sarkozy visits Prague to put pressure on the government to keep up the ratification process. It’s all very messy. Every European politician had something to say. The only common line appears to be between France and Germany, which aim to isolate Ireland, and if necessary, to drive the country out of the EU.

 

 

The French press speculates on how the Irish No affects the French presidency. Le Figaro writes that from a strictly juristic point of view, out of the four priorities of the French presidency – agriculture, climate change, immigration and defense – only immigration and defense would require a new legal basis but warns that the political climate will be difficult. Its editorial writes that the No vote could also have happened in France or Germany as the Treaty failed to meet the peoples’ expectations. In the same line is Francoise Crouigneau in Les Echos who argues that Sarkozy will have to work out a concrete plan for Europe to avoid a complete derailing. The financial crisis, the oil and food crisis that provoke the peoples’ anger and fear would give Sarkozy the perfect occasion to raise a European profile.  Le Monde writes that the Irish No calls forth the French “Nonists” arguing in its editorial that the only way forward now is a core Europe.  

 

Why did the Irish vote no?

Philip Lane, writing in RGE Economonitor, says the Irish No vote also reflected some economic concerns: about the future of Ireland’s ultra-cheap corporate taxes, immigration from the EU, welcomed during the boom years, but no longer, and about the Lisbon Treaty’s assurance on worker protection.

A very interesting point was made by Kevin O’Rourke, writing in Vox, who said the Irish, like the referenda in France and the Netherlands also reflect a poor/rich and urban/rural divide.

 
 

The Irish No and the consequences attracted tons of comment. Here is a selection. 

 

 

Munchau: Let’s play hardball with Ireland

Wolfgang Munchau says in his FT column that the EU should play “hardball” with Ireland, and call that country’s bluff. The right strategy is to isolate the country, and then force either to accept the Treaty, or get out. He says this is in fact the strategy France, Germany and the EU Commission are adopting, but it can only work if all the other countries ratify. This cannot be taken for granted, especially since the Czech Republic and Sweden are potentially difficult. But on balance, Munchau expects ratification by 26 members. There is simply too much at stake. This Irish referendum will in all probability not turn out to be disaster for the EU, but for Ireland, a country that has benefited more than any other from EU membership. This vote is likely to send the country back to where to emerged from a few decade ago: into the economic dark ages.

 

 

Buiter: Don’t play hardball

Willem Buiter says the exact opposite. “Trying to achieve a resurrection of Lazarus for the Lisbon Treaty by telling the Irish people: ‘keep on voting till you get it right”, would be both contemptible and counterproductive,’” he writes in his blog. Even if all the others were to ratify, EU leaders should now formally recognise that the Lisbon Treaty is dead. The Nice Treaty, while not ideal, is good enough for the EU to function. It produced no gridlock in the past, and it will produce no gridlock in the future. Where there are shortcoming, “love will find a way”. He also has an extensive discussion on whether the 26 could isolate Ireland through the use of “enhanced co-operation”, a principle enshrined in the Amsterdam and Nice Treaties. He is sceptical that this is possible. 

 

 

Quatremer: Play hardball

Jean-Quatremer of Liberation also advocates the Franco-German hardball-isolation strategy, and adds a further thought. If at the end of this process the Irish reject the Treaty twice, and refuse to quit, than they might create the foundation for a secession of integrationists states – a Federalist’s dream. So Ireland’s 862,000 No votes would have ended up created a hard-core Europe. What irony!

 

 

 

Saudi to increase production by half a million barrels

The New York Times has the story the Saudis are planning to raise oil production from 9.45m bp to 10m, its highest level ever. The paper says the Saudis are becoming increasing nervous about the economic impact of high oil prices on the world economy. The source for this story are oil traders and oil analysts who have been briefed by the Saudi government. The Saudis are particularly concerned that the high oil prices would make the development of alternative energy more viable.

 

 

The G8 has nothing to say (which unfortunately does not stop them from the talking)

The FT story about the latest G8 meeting shows how hopelessly lost and confused our G8 finance ministers and other officials are in response to this crisis. Dominique Strauss-Kahn made the point, in response to oil price speculation, that one had to distinguish between gambling and “intellectual speculation”, while the finance ministers could not agree on whether they needed to do something about speculation or not, with the US taking a predictable laisser-faire line.

 

 

EU to regulate rating agencies

The FT has a story that the EU plans to regulate rating agencies. The proposals will be outlined by EU Commission Charly McCreevy. The focus is to prevent conflicts of interest, and the article says the proposals are at a significantly more advanced stage than in the US.

 

 

 

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