TIME TO DITCH EU REFERENDUM REQUIREMENT

The hurriedly withdrawn proposal that the Greek people should vote on the bailout package they were offered shook the European Union brought an end to the prime ministership of George Papandreou.

The horrified reaction of EU leaders to the prospect of a Greek referendum is highly relevant to Ireland. The Taoiseach has been extremely keen that the changes being made to governance arrangements in order to save the Euro will not involve a treaty change that would require him to hold a referendum.

It is easy to understand why the Government is so reluctant to hold another EU-related poll. Since the decision of the Supreme Court in Crotty  v Taoiseach in 1987, all EU treaty changes, even those such as Nice and Amsterdam that were relatively minor, have been submitted to the people for via referendum.

Referendums are, quite simply, a horrendous way to take political decisions. Clear-cut, stand alone issues such as the death penalty or the permissibility of divorce can usefully be debated and decided by popular vote. Complex multi-faceted proposals such as a budget or the Lisbon Treaty cannot.

Getting oneself up to speed on the minutiae of budgetary policy and EU governance takes an enormous amount of time and effort. Most citizens, even those who are civically-minded simply don’t have the time or interest in doing so.

In these circumstances, debates on issues like the Lisbon Treaty are often made hostage to the hobby horses of individual groups that are focused on the impact of one out of a myriad of the issues covered by the relevant treaty.

Worse, long complex agreements are particularly susceptible to being misleadingly portrayed. In the last Lisbon campaign the elements of the both sides had to resort to gross simplifications and distortions as it would have been impossible to have a sufficiently “accessible” debate on the broad and largely technical issues dealt with by the Treaty.

There is a major danger that a referendum on EU Treaty changes to  save the Euro will be, once again, hijacked by groups focused on other issues such a neutrality or abortion.

In these circumstances the Government may well wish to test the continued validity of the Crotty decision. This judgment was the result of a 3 to 2 split in the Supreme Court in which the minority strongly argued that it was not constitutionally necessary to submit each and every new European treaty to the electorate.

The Maastricht Treaty, which established the Euro, was certainly constitutionally revolutionary and should have been submitted to the people. Depending on its contents, a treaty that adjusts and establishes various mechanisms to ensure the currency’s smooth operation may well be less so.

Bunreacht na h-Éireann deliberately establishes a parliamentary, not an popular democracy. Doubtless aware of the perils of direct rule by the people the Constitution in Article 29.4.1 gives the power to make treaties and carry out external affairs to the Government which in turn must lay all treaties before the Dáil for ratification (Article 29.5.1). 

Perhaps because of its origins in the 1930s when representative democracy was under severe pressure from demagogic extremists, the Constitution envisages a very limited role for the direct democracy.

Though a referendum is always needed for constitutional change, Article 29.4.10 provides that “No provision of this Constitution invalidates …. acts done or measures adopted by the State which are necessitated by the obligations of membership of the European Union”. 

Given that, in the absence of an opt-out, EU membership requires adoption of the Euro, it is certainly arguable that, treaty changes designed to ensure the currency’s proper functioning can be seen as “measures necessitated by obligations of membership” and are therefore covered by the Constitution as it stands.

Another European referendum would generate enormous amounts of heat and little light. It would require the public to develop an enormous level of interest and expertise in complex public policy issues even though most people lack the time, interest and ability to do so. It would make key questions of foreign and economic policy hostage to the obsessions of particular groups.

The Constitution deliberately gives almost exclusive conduct of matters of public policy to an elected legislature and the Government responsible to it. Direct government by the people is dangerous to minorities and to sensible policy making. Furthermore, though they have often let us down, we require professional politicians to run our affairs. Most of us do not have the time or expertise to acquaint ourselves with the minutiae of public policy.

The Crotty decision was wrong. Requiring a referendum for each and every EU treaty change is inconsistent with the Constitution’s commitment to parliamentary democracy and is damaging to Ireland’s interests. The Government should think seriously about testing the correctness of this decision before dragging us into the nightmare of yet another European referendum.

Learning Lessons

The news on the Eurozone is very worrying and depressing. Despite constant statements that EU governments are willing to do "whatever it takes" to save the Euro, the European Central Bank has not been told or permitted to act as a lender of last resort.

It might well be true that badly run countries like Italy and Greece would not reform if the ECB steps in and lends them money without strict conditions. However, by refusing to let bank do this under any circumstances, EU governments are risking these countries defaulting and thereby destroying the Euro.

The main reason that the ECB option is, in Angela Merkel's words, "off the table" is that Germany worries that allowing it to act in this way will cause inflation. Willem Buiter, who is the Chief Economist of CitiGroups calls the German approach "mad". "You can drown in water", he says, "but that does not mean that you shouldn't have a glass of water when you are thirsty". This chimes with Paul Krugman's view that inflation is, in the context of the weak and indebted European economy, the least of the dangers we face (and might even be helpful by lessening the burden of debt).

Germany's experience of hyper inflation in the 1920s was doubtless traumatic. The German authorities rightly drew the lesson from that experience that it is generally a bad idea for governments to print vast amounts of money. However, they are guilty of applying this lesson in a stupidly rigid and indiscriminate way.

On 9-11, many people who had been in the twin towers during the 1993 bomb attack died because they remained in the building waiting to be rescued even though they were in floors below the impact zone. In doing so, they were applying the lesson of the 1993 attacks that, in an emergency in a skyscraper, it is best to wait to be rescued. This lesson resulted from the fact that in 1993 most injuries occurred in the stairwells as people sought to escape.

These people's mistake was to stick inflexibly to a lesson that was no longer appropriate in the exceptional circumstances in which they found themselves. Similarly, while inflation is often a real danger, we are now in truly exceptional circumstances. Germany's insistence that the lessons of and solutions to, its problems in the 1920s must be the applied to our current problems is as misguided and, in economic and political terms, as dangerous. If the German authorities cannot bring themselves to recognise that their specific experience in the 1920s does not hold the solution to all financial and economic problems in all circumstances it looks like the Euro will collapse and with it the world economy.