Comment & Analysis

Brexit and the future of the European project
We must not allow the decision of English voters to destroy what Europeans have built over 70 years of patient statesmanship, writes John Bruton

Speaking at Saul, Co. Down last week, Bishop of Down and Connor Dr Noel Treanor pointed out that “in the aftermath of the wars of the late 19th Century and the horrific world wars of the last century, an impulse of God’s grace steeled Christians, citizens of erstwhile enemy nations, to forge, as Pope Francis put it in his acceptance address on receipt of the Charlemagne Prize last month, something completely new. 

“That something was the European project, which became the European Communities and in turn the European Union with their new institutions and their institutional architecture that has forged the new pathway of peace”.

We must not lose sight of that pathway of peace. To preserve the pathway of peace, that is the European Union, we must analyse what lies behind the present disillusionment.

Disillusionment with European integration is an expression of concern about globalisation, with which the EU is associated, not entirely accurately, in the public mind.

Globalisation has brought billions of new producers into the competitive market. It has enabled rapid spread of new technologies. But it has also generated a sense of insecurity. This disillusionment is being felt in other countries in Europe, and further afield – and it must be addressed.

Benefits

It is quite true that the benefits of globalisation have not been evenly spread within the developed world. All have enjoyed the price reductions that came from it, but some have gained much more, income wise, than others.

But one must acknowledge that it increased equality between countries. It has allowed billions of people in places like China, India and even Africa to enter the global marketplace. Inevitably that has meant more competition for workers in developed countries, like Britain.

These phenomena are the two sides of the same coin. Without globalisation, the world as a whole would be much poorer. But that message was hard to sell in Sunderland.

The European Union cannot be blamed for the failure of some governments in Europe to help out those who lost from globalisation.

The responsibility to help the losers can be exercised only by those who can, through taxation, raise money from the winner, to help out the loser. States, like the UK, can raise taxes, to help out losers from globalisation. In contrast, the EU has no power to raise taxes to redistribute income in that way.

The EU is a loose voluntary confederation of 28 countries, with no tax-raising powers of its own. It is not an all-powerful monolith that can solve all the problems caused by technological change or globalisation.

Nor is the EU, or the euro currency, primarily responsible for debts mistakenly taken on by EU member states, or by their banks. If states, including Ireland, allowed that to happen, they have to take main responsibility themselves, rather than just blame the inevitable resultant austerity on the EU.

If the losers of globalisation and technological change are to be sheltered from misfortune, it is for the states, not the EU itself, to do that. They alone have the power to raise the taxes for that, or any other, purpose. 

The UK has not in fact been particularly good at helping its citizens to deal with problems arising from globalisation and technological change.

Its welfare system is less supportive than that of Ireland. The UK’s investment in productivity improvement has been very poor. For years, Britain neglected basic education, skills and infrastructure investment. That is why England outside London has fallen behind. I believe British voters have mistakenly blamed membership of the EU for the omissions, and under performance, of their own UK governments!

A sense among some British voters, that no one was listening to them, was aggravated by their electoral system. This ‘winner takes all’ system allowed the one party to dominate the representation of particular areas for a generation or more. In the North of England, it was Labour, and in the South, the Tories. No wonder voters felt their vote made no difference. Voting for ‘Leave’ gave them a chance to make themselves heard, albeit in a self-destructive way.

The wall of media prejudice in Britain against ‘Europe’ is so great that it is hard to see how anything good the EU might do would ever reach some parts of the British public.

Responsibility

All over the developed world, the way people look at their responsibility as voters has changed. Political marketing has encouraged them to see voting as a means of individual self-expression, rather than as a solemn responsibility undertaken on behalf of the entire community. Voting has been increasingly influenced by consumerist individualism.

Individualism explains why older people voted to take the supposedly irreversible decision to take Britain out of the EU, and paid no attention at all to the wishes of younger people.

According to a YouGov poll, those aged 65 or over, voted by 58% to 33% to leave the EU but will have to live with the consequences of their decision for an average of only 16 more years.

On the other hand, 18 to 24-year-olds voted 64% to 24% to remain, and they will have to live with the decision, imposed upon them by their elders, for an average of 69 more years.

The referendum also tells us that the EU must do a much better job defending itself against unjust attacks. It must no longer allow itself to be burdened with blame that belongs elsewhere.

An example of the sort of thing that must be challenged, was to be found in an otherwise interesting column in The Irish Times last week by Fintan O’Toole.

He claimed – in respect of their loans to Greece – that the EU countries are “slowly, sadistically and quite deliberately, turning one of its own member states into a third world country”. This is completely false. The reverse is actually the case. It was the Greek government itself which took on the excessive debts that caused the crisis in 2008.

When international banks, after 2008, were unwilling to continue lending to Greece, it was the taxpayers of the other EU countries who stepped in to provide replacement loans on very favourable terms. That was not sadism, it was solidarity.

The interest rate on loans by EU taxpayers to Greece is 1%, whereas the IMF charges 4%. These EU concessions have reduced the net present value of the Greek debts by 40%.

Greece needs to radically reform its public administration and judiciary. It needs a land registry to allow property to be bought and sold in a reliable way. Its professions are closed shops and need to be opened up. All deter foreign investment in Greece.

Greece is now putting these things right, with technical assistance from EU countries, including Ireland. The EU should be given credit for that, rather than being subjected to ill-informed criticism.

 

John Bruton is former Taoiseach and a former EU ambassador to the US.