LAST MONTH AT the 2017 NATO summit in Brussels, a new world order was on full display. Through an act as subtle as a handshake, Europe demonstrated a renewed commitment to itself and recognised that US global leadership can no longer be relied upon.
Newly elected President of France Emmanuel Macron, aged just 39, walked briskly towards an advancing group of world leaders. On a path towards President Trump, he veered sideways at the last moment and gave his first handshake to German Chancellor Angela Merkel. He greeted two other leaders before finally addressing the impatient US President.
Chancellor Merkel followed this event by telling supporters that the days when Europe could rely on others was “over to a certain extent. This is what I have experienced in the last few days.” She said that Europe “really must take our fate into our own hands.”
Franco-German relations are improving
President Trump is not the sole cause of closer European relations. France is attempting to repair relations with neighbouring Germany, following years of mistrust over its large budget deficits.
The incoming Macron administration has made fiscal prudence a priority, with the twin objective of repairing its own economy, and of impressing the strict German leadership.
During his presidential campaign, Macron visited Berlin on two occasions and addressed industry leaders and politicians. As Merkel looks set for re-election in September, Macron is hoping his outreach can build the political capital needed for further European integration.
Further eurozone integration is now on the table
Last week the EU unveiled plans to strengthen the Eurozone. The radical proposals include the creation of an “EU finance minister” with a “Euro area treasury”. This minister would have broader powers to enforce EU fiscal rules and responsibility to ensure financial stability across the Eurozone.
The creation of a “European Safe Asset” would pool sovereign debt risks with sizeable benefits for periphery countries (Italy, Portugal, Greece and Spain). The plans also propose “a fund to absorb economic shocks” and a strengthening of the EU’s incomplete “Banking Union”, with a common deposit insurance fund.
Ireland would have benefitted significantly from this regime if it were in place during our recent financial crisis. We all recall vividly the headlines of Ireland’s bond yields rising to unsustainable levels, and the troika interventions which followed. A more integrated Europe may have produced less banking risks, and would have better dealt with the banking crisis.
I visited Greece recently, where the fallout from its financial crisis remains visible. The correction of its fiscal imbalances are still ongoing and further reforms are required before it can enter a true recovery. Europe must redouble its efforts to Greece, and other committed EU countries. Further integration will never prevent these crises from occurring again, but they should reduce their impact on ordinary citizens.
Brexit will act as a catalyst for further integration
While many observers expect a “hard” Brexit to emerge, the specifics remain unclear. Britain is almost certain to exit the single market, but trade is unlikely to face tariffs.
Customs checks would place a burden on trade, but I struggle to see where the EU will knowingly agree to measures which reduce trade flows. Germany sells over 800,000 cars in the UK annually, for example. Neither side has an incentive for significant disruption.
If the EU can’t worsen the UK’s position, it must look to strengthen its own. Increasing the benefits of EU membership would further the argument that the UK is making an historic mistake (which it already is).
The Eurozone integration I mentioned is just one area of progress. A more comprehensive response to the migration crisis, further integration of the EU single market (especially in services), greater EU-wide workers’ rights, and environmental protections would also achieve this.
We are already seeing the abolition of roaming charges and free inter-railing tickets from Europe today. Further benefits are likely to emerge over the coming years, driven by Brexit and shrinking US leadership.
Ireland must support and shape these changes
Ireland lies as the intersection between these shifting global changes. Western power, once a united Washington-London-Brussels axis, is now divided. As the first two look inward, only Europe looks outward.
Only Europe can provide small countries like Ireland with the political representation and freedom to achieve prosperity and social cohesion. This has been true in the past, under a much less integrated Europe. It can only be truer with more integration.
However, Ireland should not simply agree to these changes without arguing our case. We must redouble our efforts to secure a soft border with the North, and to barrier-free trade with the UK. Any further European integration must respect our right to competitive tax rates, it must provide a fair market for our key industries (food, IT and financial services, among others) and it should respect Ireland’s neutrality.
Ireland may eventually face a treaty referendum on further integration. The latest Eurobarometer data shows that Ireland’s EU membership has 80% support, rising to 90% among young people. However, support for Europe and support for more Europe are two different questions.
We must learn the lessons of Nice and Lisbon, and avoid the complacency which led to repeat votes. We must also recognise that, in the case of Lisbon, voters were justified in rejecting the first vote which removed the automatic right to a commissioner. The recent diplomatic effort on Brexit has proven the benefits of Ireland’s commissioner.
Only a few months ago, the future for Europe looked bleak. Rising nationalism looked set to split the union. However, the recent Dutch and French elections proved otherwise. Europe is voting for the centre again, and is endorsing more Europe, not less. The future now looks bright. Ireland has a large part to play in this future, and I’m confident we’ll be the better for it.
David Higgins is a European Political Analyst. You can follow him here @higginsdavidw.
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