Ireland’s days of hiding behind Britain in Europe are over

After a year of post-Brexit group therapy, expectations are growing that the EU27 is ready to move on later this year with a new spring in its reform step.

Last weekend in Athens, name-checking everyone from Minerva to Hegel, French president Emmanuel Macron demanded the EU rediscover its enthusiasm of old and embrace change, “not with technocrats and not with bureaucracy” but through a six-month, pan-European citizens’ discussion.

European Commission president Jean-Claude Juncker will this week add his own zest to the trifle with a state of the union speech calling for deeper EU integration. The title: Sailing with the Wind.

With all eyes now on Germany, ahead of the September 24th election there, official Berlin’s view of growing EU reform ambition can be summed up in one word: meh.

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Why should any proposed euro zone government have a finance minister but not a prime minister?

Ask senior figures, on the campaign trail or the corridors of power why the EU, and its future, is absent from the election campaign and you get the same answer: German voters don’t want theoretical European discussions but concrete answers to real-life questions. How can EU co-operation spread prosperity, secure jobs, and develop climate protection? People want to see the EU make them feel secure, they argue, not put itself up on blocks for two years while mechanics tinker with the engine.

No one in Berlin has a problem with putting EU reform on the agenda but, after a dozen years in the Brussels carnival of animals, chancellor Angela Merkel knows that steady, tortoise-paced progress brings better results than the hare-tempoed spurts of a newly arrived leader.

Above all, before it shows its hand on reform, Berlin wants others to define their terms and flag their red lines.

Euro zone prime minister

After all, real reform, such the proposed euro zone government, poses real questions: should the proposed European finance minister be a toothless bureaucrat or have veto powers over national parliaments – and budgets? And why should any proposed euro zone government have a finance minister but not a prime minister?

And more than one leading mind in Berlin is wondering: how would Ireland feel about a euro zone government with powers to set harmonised taxes or dole payments? That is why, on his first Berlin visit as Minister for Finance, Paschal Donohoe told his counterpart Wolfgang Schäuble last month that he is in no rush over EU reform.

Berlin’s point: it is simplistic to dismiss reform advocates as progressive and reform go-slows as regressive. But announcing reforms is not the same as formulating or implementing them.

After 12 years in power, Merkel knows that major reform of how the single currency operates will be a slow, painful business requiring explicit mandates for governments – at either or both ends of the process – and require attention to detail and to other euro and non-euro member states.

Her officials hope the reform buzzword – “economic/euro government” – is sufficiently ambiguous to mean everything to everyone, providing sufficient political cover during any actual negotiations.

Anxious to be helpful to her new French counterpart, Merkel has dropped her refusal to consider treaty change and backed ideas for retooling the bailout fund into a full-time European Monetary Fund. But dig deeper and Merkel officials are cool on French proposals for a general purpose fund, saying no government would contribute their taxpayers’ money to a common pot without a predefined purpose.

Merkel made clear over last weekend her condition for future reform in a fourth term: 'If there is no solidarity on migration, neither will there be in other areas – and that would be bitter for European cohesion'

Macron’s calls for an EU 2.0 are welcome, Berlin officials suggest, but he should concentrate first on meeting the EU 1.0 budget deficit rules.

Franco-German friction

Berliners are actually relishing return of some friction to Franco-German relationships. Flashing rows and exhausted compromise between the EU’s key couple, missing in the last decade, is what pushed the EU forward in the past.

Macron said last week he wants to sketch out by year’s end principles and a roadmap for European reform. But that may be ambitious: by the precedent of previous elections, Berlin will be lucky to have a new government by early December.

And Merkel made clear over last weekend her condition for future reform in a fourth term: “If there is no solidarity on migration, neither will there be in other areas – and that would be bitter for European cohesion.”

As for Brexit, also strikingly absent from the German election debate, Berlin officials are taking bets on how long before the first British walkout in Brussels. The smart money is around October’s Conservative Party conference, for maximum political effect. In that eventuality, the Germans point to the maxim: “Whoever leaves the room has to come back in.”

As for Ireland, Berliners were impressed with how effective Irish diplomacy was in getting particular concerns to the top of the Brexit negotiating agenda. Given that, it will be noticed if Dublin is any less ambitious in putting forward proposals either on Macron’s reform proposals or Merkel’s shared solution migration demands.

And, as the EU moves towards a future without Britain, seasoned German officials are watching with interest to see how countries such as Ireland recast themselves on the European stage. A taste of things to come is the looming proposal to squeeze more tax from big multinationals – many based in Ireland – on the basis of turnover, not profits.

Whether on trade or tax, German officials say it will be up to the Dutch, Irish and others to vocalise views previously aired by London. In the new EU, Berlin predicts, the days of hiding behind the British are over.

Derek Scally is Berlin Correspondent