Irish Sovereignty Lost Before Bailout
Previously published on Dec 1, 2010
Amid a forced bailout of their recently prosperous country, Irish citizens are outraged over how little influence they had in the negotiations that required their government to seriously downsize their national budget and domestic policies. The now crippled Celtic Tiger is a victim of the negative effects associated with globalization in its most extreme form. The European Union, especially the Euro Zone, is a bold example of free trade and other policies designed to entrust power to international bodies taken so far citizens and governments were willing to renounce their sovereign rights to gain a few short-tem economic benefits.
While Ireland faces a potential systematic failure of its banking system, which is far larger than its treasury can handle, Greece's near default on its national debt has revealed its economy was built on inflated growth bought with borrowed money. From these two PIGS nations, Europeans should now understand equally codependent, open partnerships with significantly weaker countries only cost richer countries, especially Germany in this case, over the long run. To a lesser extend, even countries like the United States have pursued free trade policies to a fault where they have lost their capacity to exercise their own sovereign rights over trading partners, to say nothing of foreign owned US Debt. The United States and heavy free traders cannot properly tax, regulate, or enforce law against corporation without fears of outsourcing or lost economic growth, because they treat lesser economy as though they offer equal benefits.
Certainly, a lack of regulation, taxes, and serious human rights was almost a necessity for developing countries to attract more economic opportunities, but the same is becoming true for the developed world. In developing nations like Mozambique, which is a relatively successful African country, poorly negotiated trade agreements primarily benefit foreign corporations and their investors at the exploitation of Mozambique's national resources. In other words, the developed world now competes by lowering taxes and falling to regulation, which means the Third World, where demand is lacking, has far less leverage, thus the power of the purse is stripped from the sovereign nation-state in favor of transinternational corporations and foreign investors, not capable of proper governance.
During the Cold War era, most countries sacrificed their sovereignty to align with the Soviet Union or the United States. In the post Cold War era, the European Union was a result of a push to resist the hegemonic power of the United States, which existed in the monopolar world that arose. Relative US power and influence has waned with the strengthening of the multipolar, far more democratically ruled International Community of nation-states. Consequently, arrangements like the European Union are becoming far more intrusive and burdensome. Under a global trend toward resovereignization, the Euro is an affront to the nation-state and the global financial crisis has only helped fracture fault lines in the concept.
Under the influence of globalization, especially in the post-Cold War world, members of the International Community hastily abandoned their supreme sovereign rights for the nearly powerless leadership of international bodies and unenforceable international laws in our extremely uneven, global economy where no authority actually ensure things like fiscal responsibility or enforcement of intellectual poverty rights. The Irish are reaping the rewards of a rather ill-developed plan to merge countries with very diverse cultures, economies, and governments. Although the vision of a united world and economy, which addresses poverty across the globe, is an agreeable idea, such dreams cannot be achieved overnight nor can they ever be achieved if people continue to neglect the downsides of the policies they pursue, such as untargeted free trade and the Euro.
As the Germans, along with the Irish and the citizens of every other Euro zone country, are learning, economic entropy dictates a balancing of economic benefits and costs where poor countries get a little richer, and rich countries, which does not include wealthy individuals, get a whole lot poorer. Like thermodynamic entropy, this fundamental economic principle can be circumvented, but only with a very sophisticated, well developed mechanism that defies the natural flow of wealth in a "free market". Simply dissolving borders and allowing global economies to work without shaping how they affect each nation-state will only lead to trouble. Moreover, the Irish may resent what policies they are now forced to undertake, but this is what they bargained for when they joined the European Union.