The recession has ended any self-delusion left in Germany or Ireland about the choices to be faced, writes TONY KINSELLA
EUROPEAN VOTERS may need to contemplate Keats's Where are the songs of Spring? Ay, where are they? Ode to Autumnquestion when they head to the polls later this year. The German general election is in September, while Irish votes face their second Lisbon referendum in October. Both consultations are pivotal for our futures in different ways. The European election results and relatively consistent opinion polls offer some pointers as to the likely outcomes.
The next German government will probably be built around chancellor Angela Merkel’s Christian Democrats. A majority of Irish voters now seem prepared to approve the Lisbon Treaty. If German leaders and voters can still (just about) afford elements of self-delusion, delusion of is one of the many luxuries in which inhabitants of our “island of saints and scholars” can not indulge.
The two partners in Berlin’s grand coalition of the centre-right Christian Democrats (CDU) and the centre-left Social Democrats (SPD) face the unenviable task of jointly governing while campaigning against each other. Last Wednesday finance minister Peer Steinbrück (SPD), renowned for his commitment to balancing Germany’s budget, proposed a whopping additional borrowing requirement of €310 billion for 2010-2013. The German cabinet had little choice but to approve the plan. The projected 2010 deficit of €86.1 billion will be the largest ever in post-war Germany, and that projection probably errs on the conservative side given the liabilities the Merkel government has had to accept.
Germany’s major employment maintenance weapon is its system of kurzarbeit, or short-time working, where businesses keep employees on their payrolls and a national insurance fund steps in to pay around two-thirds of basic salaries. In normal times the system works well as a shock-absorber helping firms through temporary trading difficulties without having to shed skilled employees. Contributions from healthy businesses cover the payments to those in difficulty.
The problem is that we no longer live in normal times, and payments from the fund have significantly outstripped contributions with the German Federal Labour Office making up the difference. In 2008 it paid out just over €200 million. Its 2009 projection is for €2 billion. The German banking system has been rocked – in part through the problems the Dublin-based Depfa Bank dumped on its Hypo Real Estate parent last September. The German banking bailout fund now stands at €500 billion. If OECD, IMF and World Bank forecasts are to be believed, the German deficit for 2010 could reach, or breach, €100 billion – but both Merkel’s and Steinbrück’s parties find reality a zone they prefer to either avoid or deny.
The CDU election platform includes a promise to cut taxes, while the SPD pledges not to support tax increases. All this led Klaus Zimmermann, president of the German Institute for Economic Research (DIW), to publicly wonder “why politicians don’t place more stock in honesty”.
We had our own moment of political surrealism last June during the first Lisbon referendum, even if the decision that each member state will continue to have a European Commission member is a positive by-product. The guarantees and protocols agreed by the recent European Council answer many of the incoherent concerns last year’s No campaigners highlighted – although such concerns were probably not the main cause of the treatys rejection in the first place. The boring reality remains that the elected leaders of Europes other 26 states do not spend their waking hours fiendishly plotting to impose abortion-on-demand and conscription to a non-existent European army on Irish citizens. That’s quite apart from the inherent contradiction between these two political chimeras.
If the plot is for Ireland’s four million citizens (out of 500 million in the EU) to provide canon fodder in some putative war, then the last thing the plotters would seek to encourage is easier access to pregnancy terminations. You can have more soldiers or more abortions, but you can’t have both.
Sinn Féin continues to plough its increasingly esoteric furrow of opposition. Its 2008 guide to Lisbon argued that the treaty gave “the EU too much power and reduces our ability to stop decisions that are not in Ireland’s interests”. The party’s European spokesman, Aengus Ó Snodaigh, echoed this in last Thursday’s Irish Times, arguing that the European Council pledges did not mention “the reduced influence of smaller member states” or the disappearance of up 60 veto areas.
The curious and anachronistic irony is that if David Cameron’s Tories cut-and-pasted material from the Sinn Féin website, all Conservative central office would have to do would be a search-and-replace of “Ireland” with “UK” to have perfectly acceptable campaign material. A photo of Gerry Adams and David Cameron campaigning together would certainly qualify for a strange political bedfellows award.
The major factor in last year’s referendum result was an almost complete lack of political leadership from either Fianna Fáil or Fine Gael when it came to actively campaigning for a Yes vote. Brian Cowen and Enda Kenny demonstrated a chilling absence of political nous in their inability to either grasp or project an understanding of just how vital an improved EU is to our survival, never mind our progress.
It is to be hoped that they have now digested that painful and expensive lesson given that the IMF is forecasting that our economy will shrink by 13.5 per cent between end 2007 and end 2010, with unemployment by then running at over 15 per cent.
German leaders will also have to migrate from Keats’s Season of Mists to face stark choices about higher taxes and lower spending as our economies begin their painful recovery crawls.
At our polling stations, we will all need to remember past Songs of Springand to begin a coherent attempt to write new ones.