AUTUMN CHALLENGES FOR THE EU

The European Union is facing some pretty severe challenges this autumn.

GAS PRICES AND THE GERMAN ECONOMY

?The biggest one is the high price, and insufficient supply, of natural gas.

This will have a disproportionately damaging effect on Germany and Northern Italy, which are the manufacturing hubs of western Europe. Both countries have already been hit by the recession in China and the loss of export markets that that has entailed.

I have always been of opinion that, without Germany, there would?be no such thing as a real European Union. ,

Germany provides the financial backstop on which all the EU’s ambitious plans, including the Green Deal, and the recently acquired capacity of the EU to borrow, rest. Without a healthy German economy, and a Germany that is prepared to think of its neighbours as well as of itself, the EU would wither. Other EU states need to show energy solidarity with Germany during this winter, when its economic model is under particular stress.

Meanwhile, the EU is facing other threats that could also become existential.

One is from Poland, and the other is from the United Kingdom.

POLAND AND AN INDEPENDENT JUDICIARY

In the Polish case, the courts system there has been politicised, to suit the agenda of the ruling Law and Justice Party.

?In effect, Polish Courts are rejecting the primacy of EU over Polish law, in disputes around issues that are within the competence of the EU under the Treaties.

This principle of the primacy of EU law, to be authoritatively interpreted by the European Court of Justice, is not new.

It dates back to European Court of Justice (ECJ) decisions of 1964 and 1970.

?By having a single ultimate interpreter of EU law, namely the ECJ, we have been able to create a Single market with consistent rules, consistently interpreted, and ?more or less consistently applied, across all 27 countries of the Union.

The Polish government has interfered with the independence of its Courts by putting in place a Disciplinary Tribunal for Judges, one effect of which has been to encourage a nationalistic and Eurosceptic interpretation of the position of Polish law within the EU. ?Some Judges, disliked by the government, were sacked.

Cases on the interpretation of EU laws, as applied in Poland, are not being referred to the ECJ for authoritative interpretation, as is the normal procedure in most EU countries. Thus the primacy of EU law in Poland is being slowly eroded. If a big country, like Poland, gets away with this, there will be many imitators (like Hungary which is an even worse case), and the European Union will begin to decay.

Notwithstanding all this, Poland was, in June 2022, allocated 36 billion euros in EU funds, even though it has not yet dissolved the Disciplinary Tribunal, as required to by previous EU decisions , and had not addressed the primacy of EU law issue at all.

?In a split vote the Von der Leyen Commission voted to release the funds, on the understanding that Poland would meet certain “milestones”, including the abolition of the Disciplinary Tribunal , but not the affirmation of the primacy of EU law.

?Obviously the burden being borne by Poland in aiding Ukraine influenced this decision. But the trade off is fundamentally damaging. The rule of law is one of the EU values for which Ukrainian people are giving their lives, and one the reasons Ukraine and other countries want to join the EU as a full members.

The advantage of the EU, for a small country like Ireland, is that it makes its decisions based on clear rules, and not on the basis of raw power. Ireland should not be indifferent to what is happening in Poland. That said, the EU should also be conservative in asserting what comes within the legal competence of the EU.

Meanwhile the integrity of the Single Market, and the primacy of EU law, is also being challenged, albeit in a less fundamental way, by British tactics over Brexit.

BRITISH BREXIT TACTICS

?Under the Protocol, and to avoid the need for customs controls on the Irish land border, Northern Ireland is to be allowed unfettered access to both the EU and the UK Single markets.

But the UK says it does not want the ECJ to be the final interpreter of EU rules, as applied in Northern Ireland, and it also wants NI exempted from EU State aid and VAT rules. Such a precedent for a territory within the EU Single Market, if set, ?would , like the one the Poles are attempting, undermine the level playing field that is ?essential to the EU Single Market.

The incoming UK Prime Minister, Liz Truss, appears willing to provoke a major crisis with the EU on these matters.

?She seems to believe that, if she is strong, the EU will cave in. In a way, the problem is that UK has never taken the EU very seriously and takes a patronising attitude towards it.

So the EU should not wait until the UK has started to disapply the Protocol, to outline to the trade sanctions it would impose on the UK. Once the Protocol disapplication Bill reaches Committee Stage in the House of Lords, the EU Commission should publish the full list of its proposed trade sanctions, to come the day the legislation is implemented. That ?advance notice would give time for cooler heads to assert themselves in London.

Meanwhile, I have no doubt that practical compromises can be reached on the implementation of the Protocol.

?In July, ?the Europe Committee of the House of Lords published a very interesting report, with the evidence it received, on the Protocol.

It was balanced. It showed that the Protocol had adversely affected the retail sector in NI, but had advantaged manufacturing investment there

I drew two conclusions from reading the report and the evidence.

UK UNLIKELY TO WIN IN COURT

The UK will lose the Court cases it is facing, for attempting to walk away from the Protocol. Under the Vienna Law on Treaties, the UK would have to show it had been suffering from “coercion”, or “improper process”, when it signed and ratified the Protocol. Given that the negotiations had been going on for more than a year, the UK will not be able to do that.,

EU AND UK OFFICIALS SHOULD HOLD JOINT CONSULTATIONS IN NI

The other conclusion I drew was that the best way to find solutions to practical problems thrown up by the Protocol would be for UK and EU officials jointly to meet the various sectors of the NI economy. Each have had separate meetings with the sectors, but that cumbersome format is not conducive to constructive thinking or to problem solving.

One of the advocates of Brexit, Michael Gove, suggested in February 2021 that there be a joint EU/ UK Business Consultative Group of officials, ?who would to talk, together in the one room, with all the relevant economic actors in NI. If Liz Truss wants to keep open the option of a negotiated agreement, as she says she does, she should activate this proposal of Michael Gove this week.

Otherwise we are all heading for unnecessary trouble, when we have so many other problems to deal with.