A matrix of objectives maps France, Germany, the US and Ireland along different lines, writes DAN O'BRIEN
STATES HAVE no friends, only interests. This is a dictum upon which diplomats are weaned. Interests, and the historical and political processes by which they come to be defined, are central to understanding the formulation and conduct of foreign policy.
With Europe suffering a severe, protracted and deepening crisis, many countries believe their interests are very seriously threatened. For Ireland, obtaining better bailout terms is an immediate interest. But achieving that objective will depend on the interests of other, much more powerful countries.
France has become the major obstacle to the most immediately achievable objective – that of lowering the interest rate on the European tranches of funding. Its explicit linking of the issue with Ireland’s corporation tax has prevented the reaching of any agreement.
France is a great country in so many respects, but it is not good for a small country to get into a tangle with it. France has never fully come to terms with its loss of great power status. It frequently overplays its hand, behaves dismissively towards smaller countries and can be insensitive to others’ sensibilities. There are plenty of examples, ranging from big policy initiatives to off-the-cuff comments by French politicians and officials.
Three years ago, French president Nicolas Sarkozy angered many countries when – unilaterally and with little warning – he announced plans to change radically the EU’s entire policy framework towards Mediterranean countries. In the run-up to the Iraq War, his predecessor, Jacques Chirac, caused fury when, arrogantly, he told the former communist countries who were about to join the EU, but who disagreed with his position on the invasion, that it was “a good moment to stay quiet”.
Over lunch a number of years ago, the not-usually-haughty Dominique Strauss-Kahn shared with his dining companions the opinion that the EU needed to become an empire. (Your aghast correspondent felt obliged to point out politely that some of the peoples of Europe, never mind many of those in the rest of the world, do not look back on the age of empire with nostalgia.)
Ireland is doubly unlucky. Not only is France prepared to play hardball, but there is also no good reason for it to calculate its interests are being damaged by Ireland’s corporation tax rate to any real extent. It is impossible to get a good explanation from any French person as to why the issue has come to be more strongly felt there than in any other country.
If France often forgets that it is no longer so great a power, Germany seems frequently to forget that it is the most powerful state in Europe. The strongest criticism that can be made against Germany – from an Irish or European perspective – is that it has underplayed its powerful hand during the crisis, not that it has used that hand to manhandle small countries.
Apart from the German finance minister attempting to frogmarch Brian Lenihan into a press conference to announce the bailout last November, it is hard to think of examples of Germany leaning on Ireland unduly. This makes recent outbursts of anti-Germany rhetoric, some of which would make even tin-hat-wearing English Eurosceptics blush, appear all the more puzzling.
More often than not during the euro crisis, Angela Merkel has dithered and delayed. Only when matters have come to the brink has she been decisive. This is a cause for concern. Brinkmanship can go very badly wrong.
If the failure of German leadership is dangerous, it is at least understandable. That country’s assertiveness in the first half of the last century led to terrible things. In the decades after 1945, the federal republic exercised great restraint in the pursuit of German interests with the longer-term goal of rehabilitation. Although now fully rehabilitated, Germany has not regained the lost habit of leading decisively in international affairs.
What of the superpower’s role? On the one hand, President Barack Obama’s visit this week raised hopes that the US would put its enormous heft behind Ireland’s efforts to seek better bailout terms. On the other, the claim made recently in this newspaper by Prof Morgan Kelly – that US treasury secretary Tim Geithner “torpedoed” the burning of bank bondholders late last year – raised concerns about a more malign influence.
On the Geithner claim, the way events unfolded was more humdrum and much less malign than portrayed by Kelly, I feel sure. In November, the US was concerned specifically about the costs to American investment banks of paying insurance on senior bank bonds if they were not repaid. It had a more general concern about the implications for global financial stability of defaulting on those bonds. Europeans had exactly the same concern. Because Geithner was on the winning side of the argument does not mean he determined its outcome.
The transatlantic relationship is not one of US hegemony. While the US is very much the senior partner on military and security affairs, on economic and financial matters the relationship is one of equals. The US does not tell EU member states what to do. Nor does it attempt to do so – it would be rebuffed if it did.
There have been suggestions that Ireland should seek to elicit the support of the US in its efforts to persuade other EU member countries to agree to cut the rate. This would be counterproductive. Any attempt to have America intercede would be seen in Europe as undue interference.
The obvious parallel is Turkey’s bid for EU membership. It is hindered not helped by periodic American statements in support of its membership precisely because Europeans see it as interference in their internal affairs. France – the main obstacle to a rate cut – has always been hypersensitive to the US wielding influence in European affairs.
Having the Americans tell Europeans to be more generous with their bailout would be a red rag to the French bull.
All of this does not augur well for better bailout terms.