IRELAND CANNOT demand a European Union-led solution to the economic crisis yet not support efforts like the Lisbon Treaty that attempt to give the EU greater powers to deal with emergencies, a European commissioner has said.
The remark from German commissioner Gunther Verheugen came after he heard calls from some TDs and Senators for stronger EU action.
“You can’t have a cake and eat it at the same time. You can’t ask for centralised policies and at the same time oppose a centralised system,” said the commissioner, who is responsible for industry and enterprise.
Mr Verheugen spent several hours with members of the Oireachtas Committee on Foreign Affairs debating the global economic crisis, following a series of engagements in Dublin.
“I belong to those in the EU who are against a centralised state. I want independent nation states. I do not want a super-state,” he said.
However, he said some of the demands voiced by Irish politicians required some form of “super-structure” that would allow the EU to act centrally and powerfully.
“The EU doesn’t have a single economic policy. It isn’t in the EU treaties. It isn’t a competence of the EU. It is a competence for member states and the Lisbon Treaty doesn’t change that,” said Mr Verheugen. His remarks came after a Fianna Fáil TD, Michael Mulcahy, urged both the European Commission and European Central Bank “to take their hands out of their pockets”.
Mr Mulcahy had favoured the creation of an EU-wide “bad bank” to absorb toxic debt from financial institutions throughout the EU. “I don’t accept that the European Central Bank can step back from the problem. You guys in the European Commission and in the European Central Bank have got to roll up your sleeves,” he said.
However, Mr Verheugen reminded Mr Mulcahy that the ECB is fully independent under the EU treaties, and that this cannot be changed.
Warning against protectionism, the commissioner said the EU cannot protect its companies from the effects of globalisation, and should not try to do so.
“We can’t reverse globalisation. It wasn’t imposed by China, or India. It was the western industrialised countries that have imposed it on them.
“We have forced developing countries to open up their markets, so we should not complain. It wasn’t foreseen that it would create very strong competitors.”
The current crisis would not be solved unless the banking crisis is first fixed but only in a way that does “not put all the burden on the shoulders of taxpayers”.
The European Union – which is funded by the proceeds of a 1.27 per cent share of VAT revenues from the member states – does not have the resources to handle the issue. Illustrating the speed of the economic collapse, Mr Verheugen said European shipbuilders had told him just two months ago that they had orders until 2012.
“Just a few weeks ago they told me that their order books were empty. Orders were cancelled and ships are not being built in the EU.
“We don’t know when it will stop. The social consequences are not yet visible, but they will become visible relatively soon,” he told the Oireachtas committee.
Companies in many EU states have tried to keep their highly-skilled staff employed, and have let go temporary workers, but even the core staff are in danger now, he said.
The commissioner concluded with a message of hope: “There is no need to be in a doomsday scenario. It will take time, but, of course, we will overcome this. After the crisis, in many areas we will be stronger than before.”
