They argue that over the last twenty years discussion in this country over European issues has increasingly lost touch with reality or rationality. Even those in theory favourable to a full British role in the European Union have found it difficult to stand against this torrent of wilful ignorance, political opportunism and media manipulation.

The authors conclude that Britain’s position within the European Union is currently in greater jeopardy than is generally realised. The European Union’s supporters within the United Kingdom need fundamentally to reconsider the tactics and rhetoric they have employed to make their case until now.

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Gerald Wolf, from the economic affairs department of the German embassy (but speaking in a personal capacity), outlined the thinking behind the treaty and need for fiscal restraint that it implies.  Germany, he said, had reformed its labour markets and economic structure over the past 10 years, reforms that had been difficult and controversial at the time and which had cost the previous Chancellor his job, and was now to see the benefit of them.  This was an important lesson for Germany and for the rest of Europe.  The Germans should not be criticised for their policies but, in some senses, emulated.

Philip Whyte (picture CER)

Philip Whyte, senior research fellow at the Centre of European Reform, spoke of his doubts that the German model could be emulated generally in Europe.  It rested not merely on domestic economic reforms but also on an external current account surplus.  Germany was a net exporter, both inside the eurozone and outside it.  It was not possible, he said, for every eurozone country to run surpluses – there was not sufficient absorptive capacity elsewhere in the world – which meant that adjustments in Europe needed to be undertaken by all parties and not merely by the periphery.  His optimistic scenario was that this would be understood and that economic growth could return; his pessimistic scenario was that it would not, and that much of Europe would be condemned to economic depression.  If so, what would be the future of the European Union then?

(Read a more comprehensive account of Philip Whyte’s argument here.)

The discussion that followed highlighted the fact that different eurozone countries were in difficulty for different reasons – in Greece, it might be government profligacy, but in Spain or Ireland, the crisis had its origins in the private sector – and that expecting the same economic medicine to work in every case might not be correct.  Some hope was expressed that the European elections in 2014 might crystallise the options in front of Europe – austerity or investment for growth – and that a party political contest, led by candidates for Commission president, could give the people of Europe the choice (and the awareness that they had to make that choice together).

The afternoon session of the conference turned to the Anglo-Scottish union.  With the prospect of a Scottish referendum on independence in 2014, what could be done by the English to persuade the Scots to vote No, and how would that affect the United Kingdom as it is today?

Sir Brian Barder (picture Owen Barder)

Sir Brian Barder, a former diplomat, now writing and blogging about politics, constitutional and other current issues, opened the session with a call for change.  As a British nationalist, he said, he did not want to see Scotland leave the United Kingdom, but that meant that the UK could not continue on its current path.  Its quasi-federal system – it was not a unitary state but a union of two countries – left the West Lothian question unanswered, and there would be no stable future without a satisfactory answer to that question.  A federal United Kingdom was the right way forward: there were many federations around the world that worked fairly well, and the British should do the same.

(Read articles about Scotland, Devo-Max and federation on Brian Barder’s blog here, here, here and here.)

Dr Andrew Blick, Associate Researcher at the Federal Trust (and also a Visiting Senior Research Fellow at the Institute for Contemporary History and a Senior Research Fellow at Democratic Audit) looked at the historical origins of the Anglo-Scottish union.  In 1706, the Scottish parliament had proposed that union should consist of two self-governing parliaments under a single crown and with common arrangements for agreeing common matters.  This proposal had been called “Federal Union” but had been rejected at the time by the English parliament, in favour of a united parliament for the two countries.  If Scotland was not to become independent, it was very likely that something similar might be agreed as the alternative.

In the discussion that followed, it was clear that if more devolution in Scotland was likely, that fact needed to be clear before the referendum vote was held.  There was a strong case for including the devolution option, so called “Devo-Max”, as a third option on the ballot paper.  The special nature of the Anglo-Scottish union, created by the Act of Union of 1707, clearly revealed how hollow the notion of parliamentary sovereignty really is: there are things that parliament cannot do, regardless of the writings of A V Dicey in the 19th century.

Opinions differed as to whether a stable federation could be created from the United Kingdom if England were one of the member states.  With 80 per cent of the population, there was the possibility that it would be so dominant that the other states would seek to leave.  On the other hand, the English regions were not nearly significant enough in the public mind to be an alternative: the break-up of England would be as unacceptable to the English as English dominance would be to the Scots.

There is also the European dimension.  Scotland, as a newly independent country, would be required to apply for admission to international organizations such as the United Nations and the European Union.  In the case of the EU, while there is certainly some unease at the prospect in countries such as Spain, with regional issues of their own, it was hard to see that Scotland could readily be prevented from becoming the 29th member state of the EU – it has already implemented the bulk of EU law in the acquis communautaire, making the negotiations for its accession very different from those of a completely new member such as Croatia.  But looked at from the other side, if Scotland is already in the EU, participating in the policies and implementing the laws, how much difference would there be in practice between independence and Devo-Max in any case?

These notes were written by Richard Laming but have not been checked with the speakers themselves; any errors therefore should not be attributed to the speakers.

Martyn Bond

By John Parry

Review of “The Council of Europe” by Martyn Bond (Routledge Global Institutions Series, price £75 hardback)

It was summer 1949. In the village of Le Hohwald, tucked away in the heart of the Vosges pine forests, the staff of the Grand Hotel were busily clambering over the roof putting up a variety of national flags to celebrate the first meeting of the Council of Europe’s consultative parliamentary assembly which was about to take place in Strasbourg. Most of those working at the hotel were from Alsace, a province which four times over the past hundred years had changed hands in wars between France and Germany. Others came from Yugoslavia, Russia, and even one from Britain. For all of them the creation of this new Council of Europe offered hope for the future.

The public enthusiasm which greeted this step towards a united Europe is now largely forgotten yet at the time it was seen to offer our continent and its citizens a glimpse of a better, more democratic future. World War II – the second such conflict in one generation – had ended only four years earlier. In most countries – those not under Soviet occupation and where free discussion was possible - there had already been much debate over the future of our continent and even talk of a European federation. In 1948 at a large-scale Congress of Europe in The Hague chaired by Winston Churchill and attended by 700 delegate – civil society representatives as well as politicians – a resolution was table calling for a United Europe with ‘free movement for persons, ideas and goods’, a Charter of Human Rights enforced by a Court of Justice, and a European Assembly. It received overwhelming support.

Within a few weeks the participating governments had agreed and the Council of Europe was born. It was to be an intergovernmental body headed by a Committee of member states’ ministers but with a Consultative Assembly made up of representatives of the member states’ parliaments. Its stated purpose was to promote democracy and human rights in Europe.

Unsurprisingly – for memories of the Gestapo and Hitler’s concentration camps were still vivid – its first tasks were to draw up a European Convention for the Protection of Human Rights and to establish a Court of Human Rights whose judgements would be binding on its member states. For those who had suffered under fascism this move was particularly meaningful. Moreover, with most of eastern and central Europe then occupied by the Soviet Union it was also intended as a demonstration of the superiority of democratic institutions based on respect for the individual as compared to the restrictive practices of communism.

Popular attitudes to “Europe” have changed since those heady days, perhaps largely because of inadequate coverage of European issues in the popular press and other media. Or else because, to put it bluntly, over half a century without a major European war has dulled the previous sense of urgency. To make matters worse, the distinctive functions of the Council of Europe on the one hand and the European Union on the other seem at times not always to be understood even among the cognoscenti.

Martyn Bond’s recently published book, entitled simply “The Council of Europe” and covering both its origins and later developments, is therefore particularly welcome. In it he outlines the Council’s intergovernmental structure with its political decisions being the responsibility of the Committee of Ministers – that is, ministers nominated by and acting on behalf of member states’ governments. He also makes some interesting observations on the role of the Council’s parliamentary assembly which may freely discuss and vote on political issues but has no legislative power. Yet since the collapse of communism it has played a valuable role in assisting ex-Warsaw Pact countries to develop their own democratic institutions and been particularly active in forming personal links with parliamentarians in eastern and central Europe including Russia.

He also points out that today the Council has become “a forum where Russia and Ukraine are important, active members along with other states which belong to the EU and NATO. It also offers an arena where Turkey has a major and independent role to play alongside other states.”

Moreover, the European Union which came into existence originally as an economic community now insists that all countries applying for membership should first join the Council of Europe and adhere to the principles of human rights and democracy as set out in its Conventions whose provisions must be incorporated into their domestic legislation. The European Union itself has also signed the Convention on Human rights and there is talk that it might wish to join the Council, a move which would have an interesting impact on Europe’s political architecture.

Martyn Bond is especially thorough in his treatment of the political context within which the Council has had to operate. In particular, he is critical of the west’s failure to react adequately to what he calls “the destabilizing effects of national minorities” in recent crises following the collapse of communism. The shifting of the political tectonic plates of central and eastern Europe, visible in events such as the Serb/Kosovar conflict and other problems in ex-Yugoslavia or the tensions between Russia and Georgia which have yet again demonstrated our continent’s need for an authority able to monitor and safeguard the fundamentals of democracy and human rights. On present evidence it is questionable whether an organisation such as the Council of Europe can continue – as now organised – to continue to fulfil this role effectively. As he points out, only 33 of the Council’s 47 member states have so far recognised Kosovo’s independence, and hardly any have recognised South Ossetia and Abkhazia.

Secretary-General Thorbjørn Jagland once said: “Our aim should be to build a pan-European network of cooperation that involves all member countries and fosters greater unity, on the basis of human rights, democracy and the rule of law. This cooperation should be based on the principles of equality and respect for every member state, and on the strict observance of all the commitments the member states have undertaken.”

This book spells out in practical terms some of the problems of establishing a multinational political authority in post-World War II Europe and of maintaining its effectiveness. It is probably the most thorough account of how the Council of Europe works and its achievements to date. Federalists might wish for a more closely integrated structure. In the long run that might still emerge. Meanwhile, no-one reading this book can doubt the giant steps which Europe has already taken towards that goal.

FINAL NOTE: While clearly aimed at the USA’s academic market, hence the American spelling, this book should find a place on every federalist’s (and every student’s) bookshelf. It also contains so much of interest to readers in Britain and the rest of Europe that the publishers would be well advised to consider bringing out a cheaper edition.

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Buy the book from Amazon here

Angela Merkel, chancellor of Germany (picture Jacques Grießmayer)

By Patrick Mc Nally

Is it so radical?

January 2012, another European Summit and yet another treaty. A treaty that Germany wants but the other 26 countries do not. The treaty’s final text is an acknowledgment of German dominance in Europe rather than an acceptance of German stability-driven anti-Keynesian economic thinking.

The new treaty is designed to reduce mismanagement of public finances in the eurozone. After Ireland’s fiscal disaster more checks and balances in the political system are to be welcomed and not feared. They will severely limit the room for manoeuvre of elected governments for years to come and restrict the ability of politicians who use economic policy for electoral gain. President Van Rompuy sees the treaty as being more about self-control rather than austerity.

The treaty requires that public spending is broadly in line with tax revenues over the medium term. It requires, at a European level, a greater domestic commitment to fiscal discipline on the part of eurozone countries in order to rebuild mutual trust in their finances and each other. It is a necessary condition for the introduction of other measures to improve the stability of the euro,

There are two views circulating here in Ireland in regard to the proposed treaty. The first is that the new treaty will mean that Brussels will be more intrusive and that financial supervision will be more intensive as national budgets are synchronised. The argument is that Ireland is signing up to a generation of austerity and that while Ireland remains in the EU and the eurozone structures there is no chance to develop a realistic alternative economic policy. The country is therefore tying future governments to a certain fiscal policy which calls into question the nature of Irish democracy.

The other view is that there is nothing new in the proposed treaty that we have not signed up to already. What is new is the mechanism which countries will be obliged to create to ensure compliance and this is merely the latest attempt to make it harder for governments to evade the uncompromising strictures of Europe’s economic rulebook.

The bigger picture is that the fiscal treaty is not the solution to the debt crisis. It is the price that donor countries demand for providing the solution. There is also a broader agenda which we can see in Dr Merkel’s frequent press interviews where she speaks of the need for an eventual creation of a European political union – which is now likely to come sooner rather than later – with many more national powers ceded to a central government, with a strengthened bicameral European Parliament and the European Court of Justice assuming the role of Europe’s supreme court.

German officials now acknowledge that the treaty agreement puts more pressure on Berlin to move on issues from pooled sovereign debt to a larger bailout fund. The treaty provides a perquisite for Dr Merkel to embrace eurobonds and increase German’s commitment to bailout loans. She can sell the treaty as a German-led paradigm shift to more discipline in European finances and this should help in terms of German domestic politics.

For German MPs facing their electorate there is no sense of a German march on Europe but rather a series of retreats. First they were told that Greece could support itself, then a one-off loan was required, now a second bailout is necessary. The temporary European rescue fund has now become permanent. At every stage Germany has been the largest financial contributor thus attracting voter ire. We are clearly on the verge of the biggest change since the foundation of the EEC. The question is whether the European electorate is willing to accept these changes.

There has also been a cultural shift between the Commission and national governments with France and Germany making the running without reference to the president of the European Commission. This explains the plea by Catherine Day, Commission secretary general, that smaller member states should support the Commission against the French and German domination of the EU’s agenda. The smaller countries appear to be flexing their muscles a little as there appears to be an emerging backlash against this dominance.

Is a referendum necessary?

A recent opinion poll shows that three-quarters of Irish citizens want a referendum on the new treaty. Ireland is no longer the europhile country it once was, as it is not clear to Irish citizens that Ireland has been rewarded for being Europe’s poster boy in meeting EU / ECB / IMF targets. The treaty has therefore been specifically crafted to minimise the possibility of an Irish referendum. When the final treaty is signed at the European summit planned for 1 March the Irish Government will decide if a referendum is necessary. The stakes are high for the state is not really at liberty to stay outside the treaty, even if it turns out that this is what the public wants. Failure to accept the treaty means loss of access to the permanent European Stability Mechanism when the facility is established in mid 2012.

The Attorney General, in the meantime, is currently studying the draft text to see if the treaty is compatible with the constitution. If the Attorney General decides that a referendum is unnecessary it is expected that the decision will be challenged by an appeal to the Supreme Court by one of the opposition parties. A request for a referendum could be based on the treaty requirement that binds future governments to fiscal requirements and aims. This will limit future freedom of action to the extent that sovereignty is circumscribed. The crucial question is therefore to what extent the treaty limits governments in the future.

The other option is for the president to refer the Bill to the Supreme Court to test its constitutionality under Article 26 of the constitution when his signature is required. If the Court decides the Bill is constitutional it would fireproof the government against further challenges on a referendum and it has the further advantage that it avoids the perception that the government was forced to yield on the question of a referendum by the opposition.

An interesting press item has appeared over the weekend. Declan Ganley of Libertas fame has purchased the yestoeurope.ie website which was used to promote a “Yes” vote during the 2009 referendum campaign. If you click the website you are linked to the German Federal Ministry of Finance website.

The austerity template

An old policy question has arisen as a consequent of the financial crisis. Should economic policy be based on a pre-specified set of rules or should policymakers have discretion to set policy as they see fit? During the depression of the Thirties the independent role of the Bank of England under Montague Norman was seen as too rigid to deal with the crisis. After the Second World War, the independence of the Bank was curtailed until new Labour came to power in 1997. The fashion has now changed again towards independent central banks.

During the current eurozone crisis, that nobody foresaw, the ECB has been forced to take actions nobody envisaged. Its lack of accountability, flowing from it having been made the most independent central bank in the world and enshrining that independence in constitutional law, has only recently become clear. This conflict is being played out between Germany and France in regard to eurozone governance.

From the Irish perspective, ECB monetary policy is seen as playing a role in Ireland’s financial crisis by fuelling the credit bubble and by the Bank’s failure to monitor that situation. There is also the feeling that Ireland is being asked to shoulder too great a share of the bill for the financial crash and the Bank’s insistence that the state repay non-guaranteed bond holders in full, has never been fully explained in public by the Bank.

What is the reason for this German insistence on financial austerity? As usual it is experience learned from their history from the development of the post war economic recovery to the incorporation of East Germany into the West German economy after the fall of the Berlin Wall. In the view of German finance minister Wolfgang Schäuble, Greece and the other programme countries need a collective national mentality shift similar to that which East Germany had to undertake. This shift allowed economic and structural changes to take place. German unification only came about because the people in East Germany didn’t want to go on living as they had been before. The biggest problem was that it wasn’t possible to transform eastern Germany immediately to western standards. The massive investment and stimulus programme planned for eastern states could only work if encrusted East German structures were dismantled first. The Finance Minister comments that he has never ruled out further eurozone stimulus measures or even extending further Germany’s liabilities in the eurozone, nor has he ruled out eurobonds. He believes the time is not yet ripe for a stimulus. According to this view austerity and stimulus are equally important but in that order. He believes that the German public is still in favour of helping out Greece, but it cannot be a bottomless pit. For this reason Greece must finally build a bottom to their pit, then Germany can add something. Mrs Merkel’s policy is for discipline, structural change and for growth in that order within the eurozone. The current German position is that the fiscal treaty is essential to win back market trust

The next step

The current financial crisis has led to a level of political toxicity between countries never before seen in the history of the European Union. The European project is an economic solution to a political problem, namely the relationship between France and Germany and the need to dissolve Germany in Europe. The current crisis has brought Ireland’s relationship with Europe to the centre stage and foreign nationals are contributing to that debate.

According to the President of the American Chamber of Commerce in Ireland, Ireland’s involvement in the European Union is vital for attracting investment from overseas and is a strategic interest of US firms seeking to invest in Ireland.

China’s Vice President Xi Jinping came to Ireland on a three day visit last Saturday, expressing support for European integration and stating that the eurozone crisis was only temporary. He stressed Chinese support for a strong Europe and a strong eurozone. He did not exclude Chinese support for both the temporary and permanent loan facilities. It is anticipated he will become President of China next year when power is transferred to the next generation.

According to Thomas Klu of the European Council of Foreign Relations, the political choice is for national leaders to take charge and assume control, initiating a bold jump into a federated eurozone power or they can yield to the power of the markets.

Others argue that that the future of Ireland will lie in an EU in which member states pool their sovereignties even further and that national sovereignty will have a very different meaning then it had in the last century. Shifts within Europe permit sovereignties to evolve and this is better than being at the mercy of the markets. A federal Europe is being forged by current events and the current eurozone crisis can only be resolved on a European basis. At a world level the future will be governed by larger political entities. Britain’s isolation in trying to protect the most powerful bastion of finance capitalism, the City of London, may go down in the history books as a last-ditch effort of the international finance lobby to avoid tighter financial control by democratically elected governments. The European Union needs to establish itself as a polity for its citizens rather than merely as a facilitator for the free movement of capital, goods and services.

Joschka Fischer was in Dublin recently. He made the point that Europe is at the crossroads, and that the root cause of the current eurozone crisis is a political crisis. and that Ireland will pay a high price if it rejects further integration. Unless the political power in Europe is Europeanised with the current confederation evolving into a federation, the eurozone and the EU as a whole will disintegrate. The German Ambassador made a similar point but phrased it rather differently, namely that the only way forward was to repair the defects at the heart of the euro’s construction, which was the failure to create a genuine political and fiscal union.

It appears that Irish voters will be expected to understand, if they are asked to vote on the treaty, that the treaty provides far more than rules imposing fiscal discipline but opens the way for a German commitment to some form of deeper political union

Fischer recognises that the democratic deficit implied in the treaty changes and proposes a second chamber in the European Parliament to represent national parliaments. He believes that the direct election of the European Commission president will not solve the democratic deficit because there is an absence of a European polity. He notes the difficulty of the European Parliament in achieving legitimacy and the decline in voter participation in European elections even though the powers of the European Parliament have increased.

Mrs Merkel’s vision will encourage a debate which Europe is now more ready to listen to. Using federal methods in the EU does not mean creating a federal state – for there are different kinds of federal structures – but it will contribute to a better way to combine shared rule and self-rule and the politics of doing so can create a demos that was not there before.

Lucas Papademos, prime minister of Greece (picture Greek Ministry of Finance)

Letter in the Daily Telegraph

SIR – Peter Oborne calls for Greece to be “allowed to default and devalue” (Comment, February 16). It does not need to be allowed: it is already free to do so. It would mean turning its back on economic integration and the financial support it is currently receiving from its European partners, but it can make that choice.

The insistence by other member states on economic reform, which Peter Oborne calls “cruelty”, is based on the belief that no further loans should be made without evidence that previous promises are being kept. What conservative would reward broken promises with more money?

Richard Laming
Chairman, Federal Union
London NW2

Alarmed at the continuing financial instability and economic difficulties across Europe,

Noting that the new intergovernmental treaty will contribute to the strengthening of fiscal discipline but does not address the problem of sovereign debt,

Call on the European Parliament to use its powers under Article 48(2) of the Treaty on European Union to initiate the formation of a fiscal union in which national debt is issued in the form of Eurobonds backed by mutual guarantee of the eurozone states;

Insist that such fiscal solidarity needs a common budgetary policy run by a federal economic government which is democratically accountable to the European Parliament and subject to the jurisdiction of the European Court of Justice;

Strongly support the use of enhanced cooperation to complete the single market and to undertake structural reforms aimed at raising competitiveness and employment;

Urge the Parliament to draw up a comprehensive agenda for a new constitutional Convention charged with making the changes needed to create the fiscal union, reform the EU’s financial system and restore market and democratic confidence in the future of the European Union.

Click here to sign the petition

Colonel Gaddafi (picture Antônio Milena/Agência Brasil)

By John Parry

Civil wars can be the most vicious form of conflict as recent events in Libya have demonstrated. The Benghazi-based rebels’ swift victory, achieved with Nato air support, resulted in the capture and assassination of Colonel Gaddafi while also destroying much of the country’s vital infrastructure particularly in the north-west region of Tripolitania and although services such as electricity, food supplies and medical care can be restored and housing rebuilt, agreeing new social, administrative and political structures will be a much bigger problem.

The National Transitional Council promised ‘to supervise the election of a founding assembly charged with developing a new constitution…..(based on) ‘respect for human rights, guarantee of civil liberties, separation of powers, an independent judiciary and the establishment of national institutions that provide for broad and pluralistic participation, peaceful transition of authority and the right of representation for every segment of society.’ This draft constitution is then to be ‘submitted to public referendum’. It is too early, particularly for outside observers, to predict whether the resulting proposals will lead to a unitary state or, alternatively, to a looser federation based perhaps on the country’s traditional three main regions—Tripolitania, Cyrenaica and Fezzan–but a brief glance into the past might provide a useful background.

In land area Libya is one of the largest African states but much of it is desert and it therefore has a comparatively small population, the majority living in the fertile northen strip bordering the Mediterranean. It was here, in earlier ages, that trans-Saharan trade in gold, precious stones and other products led to the foundation of Mediterranean trading posts such as the Greek city of Berenice (Benghazi) and the three Roman cities of Lepcis, Oea  and Sabratha from which modern Tripoli (Tripolis) takes its name. It was in fact Greek traders who first used the name Libya though at the time it referred only to the Benghazi area (Cyrenaica) plus the nearby desert.

Historically Libya’s development took place without, or in spite of, any European contact. In the 7th century—that is, during Europe’s ‘dark ages’—came the arrival of Islam and the Arabs who spread  across the Mahgreb [itself an Arabic word meaning ‘west’], settling and eventually making many converts among the local Berbers and others. This Arab/Islamic migration also brought education with it, leading to wider literacy and an impressive level of scholarship. By the 12th century their medical knowledge was so far in advance of anything achieved in Europe that Constantius Africanus added the teaching of Arab medicine to the Salerno medical school’s syllabus [i]. North African Arabs were also keen travellers and wrote learned accounts of the lands they visited. Ibn Battuta, one of the most famous of these scholars, was of Berber stock [ii]

But history is never static. In 1510 Spain occupied Tripoli, prompting the Ottoman Turks to intervene [iii].  Politically it was but one more incident in the ongoing conflict between the Islamic and Christian worlds but it led to Libya’s incorporation into the Ottoman Empire. Meanwhile trans-Saharan trade also continued. From Kufra in the south to Benghazi and Tripoli in the north caravans arrived with gold, guns, leather, ostrich feathers and even slaves for the Turkish market. These caravans had to pay ‘tributes’ (taxes) as they passed through each tribe’s territories–a taxation system which, when extended to ships at sea by the so-called Barbary (Berber) pirates, led to the newly-formed USA’s first foreign war: against Tripoli! [iv]

By the 19th century, with the industrial revolution in Europe creating a need for new markets and new sources of raw materials, European ships were already visiting other parts of Africa and Asia. What started as trade soon developed into the illusion that every self-respecting European country needed an overseas empire if only to gain international status. For Britain, France, the Netherlands, and eventually Germany and Italy this became the age of colonialism. In 1869 the Suez Canal opened to traffic, offering a direct trade route to East Africa, India and the orient. This focussed the attention particularly of Britain and France on the need for stability in the Mediterranean which the slowly crumbling Ottoman Empire could no longer secure. When therefore the main European powers met at the Congress of Berlin in 1878 to agree each European country’s “sphere of influence” in Africa—in effect to carve up Africa between themselves–the southern Mediterranean coast, though not on the agenda, was certainly on their minds.

Britain, which already held Gibraltar and Malta, had bought the Suez Canal from the French in 1875 and was now negotiating to occupy Cyprus while France took over Tunisia as a protectorate in 1879. Privately they both let it be known that they would raise no objection to Italy taking possession of Tripolitania. The European powers were in effect establishing the political borders which remained largely unchanged throughout the colonial period and are identical (with very few adjustments) to those of the independent African states today.

In due course the Italians began to prepare their invasion of Libya by establishing a few ‘facts on the ground’ such as buying land and promoting local economic enterprises, some sponsored by the Banco di Roma, yet when they finally launched their large-scale military invasion in 1911 they met with resistance not only from the Turkish ‘occupiers’ but also from the powerful Sanussi order of Cyrenaica. The Turks had long accepted that the Sanussi tribesmen of Cyrenaica ‘formed a religiously and culturally homogeneous community’ and had therefore administered them separately.  This continued under the Italians though it did not prevent them bringing in settlers to help develop agriculture and opening schools with the aim of promoting the use of the Italian language in their new province.

Yet despite the success of Italy’s economic infiltration and eventual take-over of Libya, officially absorbing the province into the Italian state, these new colonial masters did not succeed in winning over the Libyan people whose primary loyalty remained foccussed on their own tribes and the wider Muslim community. Nor did the concept of a modern state with established borders seem realistic in the desert where inter-tribal confederations, unacknowledged by the colonial authorities, traversed the Franco-Italian divide without even noticing it was there. As for the claim that a town, village or oasis could ‘belong’ exclusively to one or other side of the divide—well, maybe, but only in the minds of French and Italian colonial officials [v].

At the same time opposition to the Italian occupation was increasing. Operating in small groups with each tribe forming its own guerrilla band [vi] they were able to launch numerous small-scale surprise attacks against the enemy while avoiding full-scale battles. The Sanussi, always ready to defend themselves against intrusion, were among the most active. Led by the legendary ‘Umar al-Muktar their attacks were so effective that the Italian commander, General Graziani, herded some 80,000 of Cyrenaica’s civilian population into concentration camps at Sirte and cut off their food supplies from Egypt by ordering the construction of a 300km barbed wire fence.

Italy’s Fascist government’s aim was to ‘build a great nation worthy of being the heir of ancient Rome’ by launching a program of colonisation with cash subsidies for would-be immigrants  who, by the outbreak of World War II in 1939, already made up 12 per cent of Libya’s total population. Then, with the fall of France in 1940, the battle between fascism and the democracies spread to North Africa where, after bitter fighting, the Italian and German forces were defeated and a British military government was installed in Libya.

But what was to be Libya’s future? It was one of the world’s poorest countries. Its limited exports relied in part on salvaging scrap metal from the battlefields. At a meeting of the newly established United Nations Organisation the British and Italian foreign ministers suggested a joint trusteeship for the whole area with Britain taking responsibility for Cyrenaica, Italy for Tripolotania, and France for Fezzan. This was defeated in the General Assembly but in its place a resolution for the independence of a united Libya was adopted in November 1949. A United Nations commissioner was appointed to help the Libyan advisory council to draw up their new constitution. It was not an easy task. The population was mostly uneducated. Tribal sheikhs and other local leaders were not comfortable with the idea of universal suffrage, fearing it would undermine their authority, and the two smaller regions were worried that Tripolitania with its much larger population might become too powerful.

A compromise produced a two-chamber legislature with an Assembly consisting of one deputy for every 20,000 males plus an unelected Senate and a King with powers closer to those of a medieval overlord than of a constitutional monarch. Independence followed in December 1951 with the aged Idris al Sanussi as its King though relying financially and for security on Britain and the United States, both countries having military air bases in Libya.

But a new spirit was abroad in the world during those postwar years. The founding of the United Nations Organisation with its emphasis on human rights and democracy was of course its first manifestation. But this new spirit also led to the break-up of old empires, the independence of  Indonesia, India and Pakistan among others. It reached Egypt with the abolition of the monarchy and Colonel Nasser’s nationalisation of the British-owned Suez Canal in 1956, a move later to be much admired by a group of trainee army officers in Libya who resented what they saw as their own country’s subordination to Britain and America.

Already in 1959, Libya’s economy had begun slowly to improve with the discovery of oil in the Sirte basin. More schools were opened though the shortage of teachers meant that many had to be recruited from among Palestinian refugees and from Egypt. Their classes were crowded and the consequent rise in literacy raised Libyan awareness of events elsewhere in the Arab world [vii].

King Idris now began to introduce his own constitutional reforms, dividing the provinces into smaller political units, centralising power in his own hands, and effectively demolishing the country’s federal structure. In the eyes of that group of young army officers, among whom was Muammar al-Gaddafi—himself born into a Bedouin family and a true son of the desert– it was time to modernise the Libyan political structure with its tribal divisions and medieval monarchy. Impressed by Colonel Nasser in Egypt they set up a Revolutionary Command Council and waited for the right moment to strike.

It came in 1969 while King Idris was on holiday in Turkey. In a bloodless coup d’état they took over the administration and appointed a new cabinet with Gaddafi as prime minister and Commander-in-Chief of the armed forces. [viii] Domestically the change seemed beneficial. New schools were built, health centres (mostly staffed by Egyptian doctors) appeared even in the villages, and residents of the many shanty towns were rehoused in newly constructed two or three storey apartment houses. In the streets people seemed noticeably more self-confident.

After his experience of the previous regime Gaddafi had become critical of the parliamentary form of representative democracy. His argument was that ‘dividing the population into constituencies means that one member of parliament represents thousands. . . .  (and) the masses therefore are completely isolated from the representative and he, in turn, is totally separated  from them.’ He therefore introduced a new form of ‘direct democracy’ based on locally elected committees and congresses. This he called the Third Universal Theory and presented it to the public in his short and pocket-sized Green Book. Later he went farther, proclaiming Libya to be ‘The Libyan Arab Popular and Socialist Jamahiryya [i.e. ‘Peoples’ State] and establishing Revolutionary Committees of Gaddafi loyalists. [ix]

However eccentric some of these ideas may seem the experience gained by those who served on such committees could prove useful in post-Gaddafi Libya. With its regional differences some form of federal structure would seem the logical way forward and it is not too ridiculous to claim that, without realising it, the Gaddafi revolution has prepared the ground for a less doctrinaire but more effective Libyan Federation.

Yet federation or not, from Tripoli to Murzuq, from Kufra to Benghazi, the desert remains the only true reality. With the fall of Gaddafi many of the African soldiers he had recruited for his army have now fled home to Niger taking with them their modern rifles, ammunition and even artillery. According to recent reports most have joined the Islamic jihad, a disciplined force whose activities spread across the Sahara’s invisible borders and remain a threat to security in the region.

Christine Lagarde, the eurozone's last chance (picture IMF)

Last year was dominated by the crisis in the eurozone.  It dominated the debate about the future of European integration, obviously, but has also turned out to be a major influence both in the UK and around the world.

Taking Europe first, it is absurd that the public finances of Greece, no matter how wretched a state they are in, should have been allowed to do this much harm to the wider European economy.  Greece represents only 2 per cent of the European GDP, after all.  But the interconnections between the different European countries are more strongly economic than they are political, and national governments found themselves almost overwhelmed.  Banks in France, Germany and elsewhere have billions of euros outstanding in loans to the Greek government, and the governments in those other countries are gravely afraid of a further need to bail out their banks.

The Greek-inspired debt crisis arose hard on the heels of the American-inspired banking crisis, leaving the banking system in already poor shape and in no condition to bear yet another major blow.  Only the resources of the national governments could save the banks, but as the crisis has gone on, even those national government resources are starting to become stretched.

But it was all unnecessary.  While Greek government debt amounts to 142 per cent of Greek GDP, eurozone government debt as a whole amounts to only 85 per cent of eurozone GDP.  This level is high but not unmanageable, if only the eurozone were ready to manage it.  Economics has integrated faster than politics.

Politics made an effort at striking back at the European Council summit meeting in December.  News coverage in Britain focussed on David Cameron’s decision to boycott the efforts by the other heads of government to build a political counterpart to their macroeconomic interdependence, but the substance of the new European treaty may well yet prove significant.  Bringing in new rules on budget balances and compelling national governments to justify their budgetary plans in front of each other might be the route back to order in the European economy.

Of course, it was out of the question that Britain might agree to be bound by the terms of this new treaty – the coalition agreement has seen to that – but the opportunity for Britain to help draft it was rejected as a sacrifice made to the eurosceptics in the Tory party.

This is how the eurozone crisis dominates British domestic politics.  Everything done by the coalition government has to be weighed up between the conflicting parts of the coalition – the Liberal Democrats mostly on one side and the Conservatives mostly on the other – and the conclusion is based on politics and not policy.  Anything that either side wants to achieve has to be traded off with something that the other side wants, and thus has to be traded off against anything else that its own advocates support, too.  There is a continual uneasy balance between the different centres of gravity within the government, and it is maintaining that balance that determines future government policy.

For example, the Lib Dem defeat in the electoral reform referendum in May 2011 obliged the Conservatives to permit the Liberal Democrats some other, minor victories in order to keep the grassroots of their party onside.  Perhaps the proposals to reform the House of Lords would have been abandoned if the referendum had gone the other way: concessions would have been needed for the right wing of the Tory party.  As it is, House of Lords reform is long overdue and shows no sign of emerging yet.  Coalition tensions are to blame.

It did not have to be this way.  Insiders were predicting confidently at the end of 2010 that disagreements over how to handle Europe had been settled within the government and that it would not be a divisive issue or a cause of instability.  That confidence was flawed, founded as it was on a lack of appreciation of how far-reaching the European Union really is, both in terms of what it does and also what it cannot do.

There seems to be a better understanding of the powers and the limitations of the EU elsewhere in the world.  Attempts by the EU to raise funds to support its bailout programme from rising economic powers such as China and Brazil were rebuffed precisely because those limitations were well-understood.  Allowed to install Christine Lagarde at the IMF after Dominique Strauss-Kahn’s position as managing director was blown away, the Europeans were left in no doubt that this was the last gasp of the old Euro-centric order in world finance.  The financial surpluses of the growing BRIC economics are not at the Europeans’ disposal, nor can they expect to retain the same dominant role in the global institutions in the future.

European influence will have to be earned in the future rather than inherited.  Crucial to that earning power will be a resolution of the debt crisis that started in Greece and has been allowed to threaten the whole of Europe.  If the markets cannot be reassured that the peripheral and no-so-peripheral members of the eurozone can grow their economies and service their debts, then the economic gloom will spread and deepen.  That market assurance can only come from more integration.  Die-hard eurosceptics who believe that national sovereignty should be protected always and everywhere must be terribly conflicted.

Richard Laming

The answer to the question in the title of this talk is of course, yes, the time is right, but I think you would like to hear a little more from me than that.

I am here as chair of Federal Union which was founded in 1938 and my predecessor as chair then would have given the same answer.  What kind of a commentary on current affairs is it that gives the same answer to that question, regardless of the enormous change in the politics of the world since the 1930s.  That’s what I really need to explain this evening.

A lot has changed, but some things have stayed the same.  One thing that has stayed the same is the fact of interdependence between countries.  No single country can look after itself in every respect any more.  Each of them is dependent on the decisions and actions of others.  For that reason, we need a world order founded not on the independence of countries but on their interdependence.  That was true in 1938 and it is true today.

The change over that period has been that interdependence has increased.  The big news each day is about the crisis in the global economy: the efforts of any country to reduce its debt and increase its wealth are hugely affected by the economic policies followed by all the others.  Prosperity in Europe depends on prosperity in China, and vice versa.  If we think about the environment, which in the midst of this economic crisis often we don’t, the impact that one country can have on the others is very clear.  Climate change will affect us all; there is no national policy that can escape from it.  Pandemic diseases, too, cross borders freely and strike all of us equally.

And if these are ways we are interconnected that we know about, there are also the interconnections we have that we have not yet discovered.  If, five years ago, someone had said we need a better way of taking economic decisions to protect western capitalism from the mortal threat that is Greece, they would have been treated as mad.  Today, the finance ministers are desperately trying to take those decisions.  How much better to have sorted out the decision-making method at a time when there was not the same pressure to put it to use.

But let us listen to the critics.  A new way of organising the world would be lovely, they say, but it can’t be done.  People are too different, cultures are too different, countries are too different.  Taking decisions in common means having an understanding in common, and that common understanding we do not have.

Yes, I reply, people are different, that’s true, and the lack of a common understanding is a good and objective explanation of why we do not have a better world order at present.  But it is not an explanation of why we cannot have one in the future.  That common understanding can be created.  And if you will come with me into the gardens here at Avenue House, I will explain how.

I would show one of our critics, someone who points out the lack of a common understanding, I would show them one of those splendid oak trees in the garden and ask them how they thought it got there.

A tree like that is perhaps 20 metres high, and is 20 metres across, and there is as much of it in the roots below the surface as we can see above it.  It weighs as much as 50 tons.  How did it get there?

Our critic would start to think about the earthmoving equipment that would be used to dig a hole big enough, and what kind of crane might be needed to move the tree into the hole, and how a lorry big enough might get anywhere near the site in the first place.  It’s a civil engineering puzzle, that’s for sure.

But we know better.  If you want a large tree in the garden, you don’t get it by starting with a large tree.  No, you start with something much smaller, and you nurture it and care for it over time, and it grows.  The gardener here at Avenue House will have planted a smaller tree, a sapling, many years ago, and someone else, even earlier, will have taken an acorn and planted that first.  Those small steps were what were needed to give us the garden of beautiful trees we have today.

And not only trees, that’s how we can create our common approach to solving the world’s problems, too.  It doesn’t come all at once, it comes slowly.  We might have the new world order in mind, but we start with our saplings and acorns.

And what are those saplings and those acorns?  If we truly want to create a new world order, how do we start?  I mention a few ideas, starting with the acorns first.

My first acorn is the idea that disputes should be settled peacefully.  Disputes are easy to come by – they are what social life is made of – but how they are solved should not simply be down to force.  No-one can look at the recent history of humanity, say, and think that we have been served well by violence.  The cost of war, the cost of conflict, is far too great, and potentially getting greater.  There has to be a better way.

That better way is the rule of law.  Peaceful settlement of disputes should be derived rationally, on the merits of the issues at stake.  We need disinterested parties to act as judges, to ensure that the peaceful settlements that are reached are also respected.

My third acorn is the idea that all of us are equal before the law, regardless of rank or status in society.  No king or president or general should escape the obligations imposed by the law by virtue of the post that they hold.  In fact, the more exalted the position, the more intense the scrutiny should be.  With power comes responsibility: we will criticise people for their behaviour if it falls short.

But if we will criticise people for what they do, we will never criticise people for what they are.  Not only is everyone equal in being subject to the law, everyone should also be equal in making that law.  We should reject prejudices and discriminations of every kind: whatever community or society we might be part of, each of us is entitled to be judged and treated as an individual, with our own merits and virtues and also with our own responsibilities and duties.

These are four characteristics of a world we want to live in.  Certainly, they describe the world as I think it should be, and I hope you agree with me.  But, next, if those are the little acorns that form the start of our new world order, how does it come into being.  What does it look like as those acorns grow?

There are many examples I could quote, but the first sapling I will mention is the International Criminal Court.  This is a ground-breaking institution in that it provides the first means by which people in positions of government and power might routinely be held to account for crimes they might have committed.  No more is there an exception for acts undertaken in the role of the state: those acts, if criminal, are just as culpable as any others.  The state must be subject to the law just as surely as it makes and enforces the law.

Secondly, there are organisations such as the World Trade Organisation and the World Bank which, while imperfect in the way they are run, are seeking to relieve poverty and spread prosperity and to do so by removing barriers to trade.  Removing barriers to trade gives more people more freedom to earn their own living, using their own talents and imagination and judging their own risks.  Those barriers might be created by governments in thrall to domestic vested interests, they are certainly created by governments trying to discriminate against foreigners.  If we truly believe that we are all equal, then removing trade barriers is a necessary step towards equality.

Thirdly, there is the European Union.  In the light of the current financial crisis, it is hard to be enthusiastic about the EU, but nevertheless I am.  It has brought Europe to an historic condition of peacefulness, both compared with the rest of the world and compared with its own history.  It has done so because traditional enemies have agreed to submit their disputes to disinterested mediation by a system in which all citizens have an equal say.  Country after country has decided that this is a better way to relate to its neighbours.  The current crisis shows that the system is not perfect, but it is worth defending and improving.

Lastly, in the context of the United Nations, let me mention the idea of a UN parliamentary assembly.  The UN is another sapling of a sort, but it represents states and not peoples.  Its meetings are gatherings of governments, all of whom have much in common with each other that they do not share with their own citizens.  A parliamentary assembly, composed of people there to represent those citizens and not those governments, would provide a different kind of voice at the global level, and would help the UN develop into a better and more authentic representative of humanity.

To ask for a new world order is a bold step.  The existing political systems in the countries of the world, flawed and problematic as they often are, have taken centuries to develop and bring to a point at which we might start to be satisfied with them.  How can a global system even be contemplated, let alone be commenced?

By understanding how a political system is founded, by thinking about values and the institutions that underpin it, and by having the imagination and the determination to live by those values and build those institutions.  A new world order is within our grasp, if only we learn how to reach for it.

Based on a talk by Richard Laming, chair of Federal Union, at a meeting of the Bahá’i community of Barnet, on 12 November 2011.  The opinions expressed are those of the author and not necessarily those of Federal Union.

The mood is subdued. This is an underwhelming summit deal. The summit failed to deliver a decisive result in favour of the single currency and has made a grave problem more difficult by embarking on a new institutional debate over the relationship between an intergovernmental treaty operating outside the EU, yet expecting it to police budgets and rules set down in EU law.

There is a realisation that the proposed funding to support the euro is inadequate. The fundamental problem remains that there is not enough money to see all the weakened states through the crisis. It is now realised that more austerity will not solve Europe’s problems indeed if all countries introduce austerity programmes they will drag each other down and the programmes won’t work. There is a real danger that Europe will face a return to the 1930s. It is still not clear that the euro will survive. We will have to wait and see how soon the markets thrash the latest European Council offerings

The summit conclusions show no substantive advance on previous commitments. The focus is all on financial discipline. All that has happened is to demonstrate that European members will be subject to tough financial disciplines once the current crisis is over. It has done nothing to solve the immediate financial sovereign and debt crisis.

A new treaty was seen as the price rather than the mechanism for saving the euro. It was believed that some form of German-backed ECB action would follow as this was the only way to save the currency. If Germany got new treaty guarantees that eurozone countries wouldn’t abuse the ECB facility then Germany would assent to massive central bank intervention in the markets. After last week’s summit, that view is being revised. The anticipated new intervention by the ECB is still awaited.

One commentator believes that nothing will change until Germany feels the white heat of contagion. Another shock may be required before everyone in Europe reads from the same page; perhaps if a major German bank experiences difficulties in the market then this would produce the recognition that everyone is in the same boat.

The other disappointing aspect of the summit was the inability to strike the right balance between austerity and growth. It seems that the German definition of fiscal union is tighter regulations only. Every European crisis summit solution has been trashed by the market when the small print has been analysed. If this is repeated this time a high political price will have been paid by Europe and enormous damage done to the idea of the European Union for nothing.

The result of the summit has been a setback for Ireland, Germany and the European Commission. Ireland has lost a key heavyweight supporter in European negotiations. Without the weight of the British, Ireland will have to face these treaty sessions with only small countries as allies. This leaves them open to more bullying from France and Germany.

Germany has lost a counterbalance to French statism and the European Commission has been sidelined. France has gained because the intergovernmental arrangements will increase its influence in the eurozone. Already many countries are uneasy about the direction of current Franco-German policies. With such power moving to a European level and without a corresponding increase in democratic arrangements such developments are worrying. If a referendum is required in Ireland many previous pro-Europeans will be reluctant to support a Yes vote for what appears to be a fiscal austerity union based on an intergovernmental process. The government will try to frame the question so that the vote will be whether Ireland should remain in the euro. The argument in favour will be that the euro has increased in value over the past ten years, it has increased inter-European trade by 50 per cent and it has been a better antidote against inflation. The drawbacks of withdrawing from the euro will also be highlighted.

Britain’s relationship with Europe appears to have changed and a looser arrangement between Britain and Europe is anticipated. The fact that Britain may be isolated in Europe is not a welcome development from the Irish point of view as Britain is still our biggest trading partner. Ireland is Britain’s fifth largest trading partner and we consume more British imports than Brazil, Russia, India and China combined. The value of imports and exports between the two countries is £1 billion (€1.2 billion) a week. The Government has insisted that Britain’s opt-out would not affect Ireland’s trade relationships as we are both covered by the Single European Act, but there is fear however that Britain and Ireland could be operating under different trading arrangements sometime in the future. Should it ever come to pass that Britain leaves the Union there is a concern that custom barriers will be erected again south of Newry between Northern Ireland and the Republic, the UK’s only land frontier with a fellow European member. Then the two parts of Ireland will be operating under different European regimes and the Republic would be operating different rules to our biggest trading partner. One consequence would be that Ireland‘s financial services industry could be hampered if a new tax on financial services applied in Dublin and not in the City of London, leading to a flight of business to London though this can be overstated.

It is not in Ireland’s interest that Britain would be left isolated. To prevent this, it is been proposed to institute a more regular series of bilateral meetings between Britain and Ireland concerning their positions within the EU on common matters of interest. The key issue is to ensure that Britain is not isolated from the process that will unfold over the next three months. This will include such policy issues as employment, enterprise and financial services

Ireland may now be approaching a crossroads. Does it choose a closer relationship with its nearest neighbour or does it choose its continental EU partners? If European states can secure the stability of the euro, there is really no choice. Ireland’s prospects are inextricably linked to the euro and the country needs to support the measures necessary to sustain it.

All twenty-three members of the euro-plus economic pact are being invited to the special monthly summits. It has now been confirmed that the other four countries will be invited to these meetings on an observer basis. The first draft of the proposed intergovernmental agreement will be available to governments before Christmas.

The summit agreement means that it is necessary to construct a new body of law, outside the ambit of EU law. This will give a greater role to the eurozone governments where France’s voice will be amplified. This has been one of France’s strategic interests since the crisis began. The UK decision to sideline itself served French interests well.

Through this arrangement we are being forced to sideline the Community institutions and structures which have provided a buffer for the smaller countries and have served small states well. This has reversed the notion that the integration of Europe always proceeds in the same direction, albeit at a different pace. Europe is turning longstanding principles on its head and it is not clear where that may lead. The euro crisis is turning into a crisis for the whole European project and as a result the union is facing the gravest crisis since its foundation.

The Council’s legal services presented its opinion on the proposed intergovernmental agreement. It concluded that it would be illegal to involve EU bodies in any deal involving less than the 27 member zone. There was a reported sharp exchange between the German delegation and the Head of the European Council’s legal service. A day later the legal opinion was reversed however there is still a concern in Germany about the legality of the intergovernmental structure yet to be agreed. Eurozone sources also express scepticism saying that the plan to create a non-EU structure to oversee an EU budget was fraught with legal uncertainty and it is far from clear that the scheme will work.

The crisis of the euro has become a crisis of the entire European project. The European model is failing and this raises the question as to whether it is capable of further development. A study by Janis Emmanouilidis of the European Policy Centre shows that the vast majority of citizens in European countries have lost confidence in the European project, and some elites seem to share this judgement.

If the European model cannot take the next step in integration, the belief that it is a model for government structures in the 21st century takes a big knock.