• English Site
• >Europe
• >European Union
• >

  Letter From Berlin: As Financial Crisis Grows, EU Emerges Stronger

Letter From Berlin As Financial Crisis Grows, EU Emerges Stronger

By Christopher Glazek in Berlin

Part 2: Ireland Takes a Second Look at Lisbon

According to Gunnar Harraldson, director of Iceland's Institute for Economic Studies, the surge in EU support suggests that Icelanders have lost faith in their own government. "The system here is very rigid," he told SPIEGEL ONLINE, "and a lot of people don't trust Icelandic politicians." This is particularly true in the more developed south-eastern portion of the island, in and around the capital city, Reykjavik. The big spike in EU support has come from the educated middle-class, Harraldson stresses, a large segment of whom "would rather give power to Brussels" than risk financial oblivion. Rural populations, especially those involved in the country's sprawling fishing industry, remain wary of surrendering national sovereignty.

Ironically, precisely because of the country's "political rigidity," Harraldson doesn't see EU membership on the horizon for Iceland anytime soon. Even though the idea now enjoys broad support among the populace -- as well as broad support in Brussels -- key politicians in Iceland's Independent Party, the senior partner in the country's governing coalition, remain hostile.

The Independent Party has announced it will meet at the end of January to reopen debate on the EU issue, though it is by no means certain to change its position. Two months is a political lifetime in any country, and polling has already recorded a slight drop off in EU enthusiasm. In a poll taken in October, when the financial crisis still seemed fresh and scary, support for joining the EU climbed as high as 68.8 percent. As the intial shock wears off, support for the EU could erode further.

Still, should the crisis worsen again, the "join now" chorus could get louder. In Harraldson's view, most countries have historically joined the EU because of "some kind of crisis." For Iceland, the economic storm of 2008 might be the one that pushes it over the edge.

The Celtic Tiger Loses its Claws

By rejecting the Lisbon treaty in a referendum in June, the people of Ireland brought the EU to its knees. Now, after a bruising ride on the financial crisis roller coaster, they might be the ones that get the EU back on its feet.

The Irish economy used to be envy of Europe. Now it holds the dubious honor of beating all its peers to the punch by becoming the first to fall into recession. With jobs disappearing, migrants leaving, and total debt standing at an eye-popping 265 percent of GDP, Ireland can ill-afford the added burden of frozen credit markets. According to a report released last week by Ireland's Economic and Social Research institute, unemployment is expected to rise from 6 to 8 percent next year, with double-digits remaining a significant possibility.

Somewhere in economic storm, Ireland lost its fiercely independent swagger. Many are now saying the country might hold a second referendum on the Lisbon Treaty, expecting that this time the "yes" camp would have an easier time cobbling together a majority. A poll published on Nov. 17 by the Irish times showed that the Lisbon Treaty would pass if given another chance, with 52.5 percent in favor and 47.5 percent opposed. That represents a 12-point swing from the vote in June, which saw the treaty defeated by a margin of nearly 7 points.

Why exactly the financial crisis would cause the Irish to reconsider isn't entirely clear. Unlike Denmark and Iceland, Ireland is already a member of the euro zone. But Steven Collins, political editor for the Irish Times, says the financial crisis has "clearly" been the main factor in moving the debate. Just like in Iceland, the biggest movement in Irish opinion has been with the urban, educated middle-class. "It's ironic, really," Collins told SPIEGEL ONLINE, "because the working class are the ones losing their jobs, but it's the middle class that is paying close attention to the crisis." Although the urban middle-class tended to support the Lisbon Treaty before, they now do so in overwhelming numbers.

That doesn't mean a new referendum is a sure thing. Although Collins believes a new vote would have "good prospects" for passing, the "no" camp could score another victory if it can capitalize on discontent with the current government, which is deeply unpopular. The government in Dublin recently indicated it was going to put off a new referendum till next autumn, but Collins figures that whenever it happens, it will require support from the opposition to get through. Although the government could theoretically avoid another vote by passing most of the treaty through parliamentary means, it probably lost its opportunity to take this route when it decided to hold the June referendum.

Ever Closer Union

The EU might not be out of the woods yet, but it is in a considerably stronger position heading into 2009 than many feared would be the case six months ago. This uptick in institutional strength comes at an especially important time.

In January, the rotating EU-presidency will shift from France, one of the most loyally integrationist member states, to the Czech Republic, historically considered one of most independent. Czech President Vaclav Klaus, a committed EU opponent, has made headlines several times this year for likening the EU to "a communist state" and for urging skeptics across Europe to unite in opposing the Lisbon Treaty.

But even in the Czech Republic, a new day might be dawning. Klaus's position as president is mostly ceremonial, and on Wednesday the highest Czech court removed a significant obstacle for the Lisbon Treaty by declaring the agreement to be compatible with the Czech constitution. If the Czech parliament manages to push it through, the treaty would still need Klaus's signature for final approval.

Even the cantankerous Klaus has indicated in the past that he would sign the document if the Czech Republic were the only country left holding up the treaty's ratification. That would seem to throw the ball back into Ireland's court, but the Irish economy continuing to tank, the world may soon get to call Klaus's bluff. Europe's dream of ever-closer union might be happen sooner than we think.

For reasons of data protection and privacy, your IP address will only be stored if you are a registered user of Facebook and you are currently logged in to the service. For more detailed information, please click on the "i" symbol.

Post to other social networks:

• 
• 
• 
• 
• 
• 
• 
• 
•