The Irish vote and after

Ireland votes `yes' for European Union enlargement, but the expansion prospects are still dicey.

LOOKING at the scenes of undiluted joy that greeted the "yes" vote in the Irish referendum over the enlargement of the European Union (E.U.), one would think that the issue is settled once and for all, and, bar the shouting, it is all over for the euro-sceptics. But the more cautious E.U.-watchers believe that winning the referendum was only a part of the battle for a larger and unified Europe, and the easier part.

The more difficult phase begins now as the E.U. gets down to the business of enlargement, and tries to reconcile the competing interests of its member-states, not to mention the widespread sense of unease in some countries, including Ireland, over the prospective flow of immigrants from the E.U.'s poorer cousins into Paris, Berlin and Dublin. Call it xenophobia, or simply fear of strangers, because of ignorance and propaganda, there is apprehension that immigrants from the new member-nations, most of whom are economically less developed than the existing members, will come, take away local jobs, add to the pressure on public services and cause social tensions.

But, first a word about the referendum, which remains a significant landmark in Europe's journey towards a new future.

On October 19, a major hurdle in the way of the E.U.'s contentious enlargement was removed when the Irish Republic, a reluctant europhile, gave the green light in a bitterly contested referendum in what was billed a "rendezvous with history''. The country's nearly three million voters, sharply divided at the start of a long campaign, gave a "yes'' verdict as emphatically as they had given a negative vote barely 16 months ago. It was a dramatic turnaround with more than 60 per cent of the people saying "yes'' this time as compared to 35 per cent in a previous referendum in June 2001. But it would be misleading to attribute this to a wholesale conversion of eurosceptics. True, some may have changed their minds as the implications of the impenetrable Nice Treaty a 90-page, dense document on the future of Europe which they were asked to approve in the referendum were explained to them, but more crucially the positive outcome was the result of a larger turnout of pro-Europe voters who had stayed home last time because of a lacklustre campaign by the "yes'' camp.

Having lost the first referendum, Irish Prime Minister Bertie Ahern took personal charge of the campaign, pulling out all the stops to avert a replay of June 2001 to the extent that there were allegations that his government "rigged'' the rules and the format of the referendum. There was also some anger that another referendum should have been inflicted on the people so soon after they had given a "clear'' verdict. Even before the results were declared, a Conservative Member of the European Parliament, Daniel Hannan, accused the Ahern administration of using "undemocratic'' means to win the referendum. "In order to push ahead with Nice, the Irish government disregarded last year's clear referendum result, changed the rules and changed the question,'' he said.

But Ahern's anxiety was understandable, considering what was at stake not only for the E.U. but also for him personally. A "no'' vote again would have plunged the E.U. into turmoil, damaged his own standing in Brussels and raised questions about his authority at home. Critics would have certainly seized on a negative verdict as they did last year to portray it as a vote of no-confidence on his domestic policies, which have not been very popular lately. The outcome has been greeted with a collective sigh of relief across Europe, most palpably in the 10 countries, mostly former East European Communist states, whose entry into the E.U. would have hit the buffers if Ireland had rejected the Nice Treaty, which forms the legal basis for the E.U.'s enlargement from 15 members to 25.

The countries whose entry into the E.U. by 2004 is now a certainty are: Poland, Hungary, the Czech Republic, Slovakia, Slovenia, Latvia, Estonia, Malta, Lithuania and Cyprus. Bulgaria, Romania and Turkey are in the line for a second round of enlargement in 2007. In Poland, an ecstatic Prime Minister Leszek Miller even let go of the famous Polish vodka to raise a glass of Guinness (branded beer) to Ahern and his people for paving the way for his country's admission into the E.U.

Ahern hailed the "yes'' vote as a "truly historic'' one and said: "This decision shows above all that, as a nation, we want to welcome the people of applicant countries into the Union with open hearts as well as open minds.'' Romano Prodi, President of the European Commission, declared: "We can proceed with enlargement without any more obstacles''.Really?

AT the best of times, the E.U. is fraught with tension. The differences range over a host of issues, but most crucially over agricultural subsidies, the "big brother'' attitude of the more powerful members such as Germany, France and to some extent Britain, and national sovereignty. The entry of as many as 10 new members with varying levels of economic development and expectations is likely to add to the tension. Already there is grumbling that the investment-related incentives, which some of the prospective countries offer, would give them an unfair advantage over existing members.

``Established members such as the Netherlands, Spain and Austria are threatening to block swift enlargement unless the East Europeans fall in line on competition policy. Most candidate-countries offer investors tax concessions that extend beyond E.U. accession. That is regarded as unfair competition by older members,'' The Times said, highlighting the obstacles that still remain in the way of E.U. enlargement despite the Irish vote.

There are fears among existing E.U. members that businesses might move out because of lower wages and state subsidies offered to investors by their new comrades. The Netherlands, for example, is said to be worried that its steel would become less competitive because of subsidies on steel in the Czech Republic. The problem is compounded by the domestic political compulsions of some of the existing members. Both the Netherlands and Austria face elections in November and their politicians cannot be expected to be seen making concessions on what are regarded domestically as crucial vote-catching issues.

Even pro-Europe commentators have cautioned that the Irish verdict does not necessarily guarantee a smooth enlargement, and one of the sticking points is likely to be the cost of expansion. "Who would foot the bill?'' is a question being asked. Britain and France were engaged in a war of words recently when President Jacques Chirac suggested that Britain meet the cost of expansion from the 2 billion rebate it gets from the E.U. to compensate it for its small income from the Common Agricultural Policy (CAP).

"We are not saying that enlargement is now a done deal. There is a lot of work to be done to secure the necessary agreements," a senior official of the European Commission warned a day after the Irish referendum.

Critics of the one-size-fits-all idea, which they say characterises the E.U. regime, point to the recent row over the Stability and Growth Pact which Prodi himself described as "stupid". The pact, which imposes a uniformly rigid fiscal discipline on all member-states irrespective of the size or state of their economy, has been flouted by the E.U.'s Big Two Germany and France to cope with economic downturn causing a backlash among other members. And now a review of the pact is on the cards, but amid fears that Brussels might be inclined to acquire more powers to "steady" national budgets, Britain has made clear that it regards fiscal policies central to national sovereignty and would not brook any interference.

Given the varying sizes and national self-interests of member-states, it is not surprising that there are few areas where there is complete agreement; the Nice Treaty itself is a result of a messy compromise. Signed in December 2000, it is a blueprint for a larger and more unified Europe raising fears that it is aimed at creating a European "super state''. This was a theme fully exploited by the "no'' camp in the Irish referendum and remains a sensitive issue across Europe. Even committed E.U. members want it to be understood that they would not allow Brussels to do anything that might compromise their own national sovereignty.

Among other things, the Nice Treaty provides for institutional mechanisms such as the weightage to be given to members while voting on major issues. It seeks to remove the national veto in many areas, to which there has been a mixed reaction from the larger and richer nations. The Treaty also envisages a military role for the E.U., which has raised the hackles in some quarters, and became an issue in the referendum. The "no'' campaigners, comprising a curious mix of liberals and right-wingers, said that it would undermine Ireland's neutrality. Their slogan was, "No to Nice: Defend sovereignty and neutrality''. Indeed, this was a major factor in tilting the balance in favour of the "no's" in the earlier referendum. This time, however, the benefits of E.U. membership, highlighted by Ahern and his official machinery, outweighed the fears raised by his opponents.

Yet the Treaty remains a contentious document "the despair of ardent federalists'', as one commentator said. "They fear that it will give the big powers Paris, Berlin and London enough votes in the E.U.'s top council to form a `directoire' that ignores the little states,'' an analysis in The Daily Telegraph said, quoting approvingly a French MEP who called the Treaty "the death of the European dream".

The Daily Telegraph, right-wing and congenitally europhobe, is expected to exaggerate the difficulties, but even liberal analysts and enthusiastic Europeans wish the Nice Treaty had been a "fairer'' and less complicated blueprint. The Guardian, left-wing and pro-Europe, warned of "serious problems (that) still lie ahead for enlargement''; and British Foreign Secretary Jack Straw, conscious of the sheer scale of the task, tempered his enthusiasm with caution. "We stand on the edge of an historic moment. It is essential that we keep our eyes on the prize of a united Europe,'' he said.

The Independent, whose pro-European credentials are unquestionable, stressed that an Irish "yes'' vote did not mean that the factors that led to the defeat in the first referendum had disappeared. These, it said, included the "centripetal power of the big states'' within the E.U. and too much obfuscation about the cost of expansion and how it was to be paid. "Before the water closes in over the welcome result of the referendum in Ireland, the European Union ought to pause to recognise the problem it has in eliciting popular consent,'' it cautioned in an editorial sharply headed: "Ireland's Yes Vote Does not Mean that Europe can Ignore the Reasons for No.''

There is speculation that if the differences over the cost of expansion and related issues are not resolved in the next few weeks, the timetable for enlargement could be in jeopardy. But those who have seen the E.U. from close quarters say that it is known to work best under pressure, and having stumbled through many sticky situations in the past there is no reason why it should not be able to ride the present difficulties as the dramatic agreement between France and Germany on capping agricultural spending shows. The bottom line is that there is far too much at stake for anyone to rock the boat at this stage. Still, it could be a while before they are ready to raise the toast.