THE FISCAL COMPACT TREATY—THE CHOICE THE IRISH PEOPLE HAVE TO MAKE

BASIC PRINCIPLE BEHIND COMPACT WAS ACCEPTED BY IRISH PEOPLE TWENTY YEARS AGO

Most of the   commitments in the Fiscal Compact Treaty (formally known as the Treaty on Stability, Coordination, and Governance i the Economic and Monetary Union) are ones to which the Irish people have already agreed in principle in previous EU related referenda.
Irish people voted on 18 June 1992 to ratify the Maastricht Treaty. In so doing we democratically committed ourselves to a single currency, stable prices, sound public finances and a sustainable balance of payments. As we have learned, we have failed to adhere to the last two of these, sound public finances and a sustainable balance of payments.
We also committed ourselves in that referendum to treat economic policies here as a “matter of common concern”, which we would “coordinate” with our partners in the European Union. In particular, we committed ourselves to keep our Debt/GDP ratio below 60%, and our budget deficit below 3% of GDP.
 It was natural that we should have agreed to this, once we agreed to a common currency in the first place.
 If one country in the euro was free to “print” as many euros as it liked, by running uncontrolled Government deficits, that would automatically debase the value of the currency, and rob other countries in the euro of the value of their savings.
I make these points simply to reiterate that the Fiscal Compact Treaty does not involve some new principle or some novel incursion into national prerogatives. We accepted EU involvement in our budgetary policies twenty years ago, and we did so by the most inclusive method possible, by a referendum in which every voter had a say.
WHAT IS NEW ABOUT THE FISCAL COMPACT TREATY
In essence what the Treaty does which is new is to require us to incorporate into our
 “national legal systems through binding and permanent provisions, preferably constitutional” 
a ” balanced budget rule”.
A   balanced budget   is something we have accepted as a goal when we accepted the Maastricht Treaty , in the Stability and Growth Pact agreed in Dublin in 1996, and in detailed rules that were brought into force late last  year, under existing EU Treaties, as part of the so called “six pack” of measures to confront  the  financial crisis.
The novelty in the Fiscal Compact Treaty is that it defines a balanced budget more precisely, and requires that each country write a requirement to have a balanced budget into its permanent law.
What is new therefore is that we will no longer just rely on EU level rules to ensure that we move steadily towards balanced budgets. If we accept the Fiscal Compact Treaty, we will incorporate that requirement into our own domestic permanent legislation as well.
The Fiscal Compact Treaty defines a balanced budget in a very specific way. It says that a country will have a balanced budget if
“the structural  balance of the general government  is at its country specific medium term  objective as defined in the  revised  Stability  and Growth Pact with a lower limit of 0.5% of  its GDP at  market prices”
A rule along these lines has to be written into the country’s own  permanent law.
A “structural “  balance  is different from an ordinary budget deficit or surplus. It is an estimate of what the deficit or surplus would have been if economic conditions were normal.
In other words, if the economy is in the middle of a temporary recession or depression, it might have  a budget deficit, which would become a surplus of its own accord, without any  change of tax policies or spending commitments, once conditions returned to normal.
Conversely, if a country is in the middle of a temporary boom, it might have an apparent budget surplus in ordinary money. That was the position Ireland was in from 2002 until 2006. But once conditions returned to normal, if tax policies and spending commitments remained the same, the surplus would turn into a deficit. This is what happened in Ireland after 2008.
There are obvious difficulties in defining what “normal “conditions are.  If the concept of the economic  cycle is used to determine what is “normal”, there will be debate as to when the cycle began and when it will end.  But the definition would have to be exact, if it is to be legally enforceable as a means of forcing a country to change its budget.
This is where the words in the Treaty about a “country specific medium term objective as defined in the Stability and Growth Pact” come into play. This “medium term objective” will have to be negotiated between the country and the European Commission. So also would the time frame for reaching that objective. So the definition of what would be the permitted actual level of deficit or surplus, to comply with the 0.5% structural rule, would be negotiated in advance, and the budget would then have to comply with what had been agreed.
This detailed formulation of this will be incorporated in a Fiscal Responsibility Act to be passed into law by the Dail and Senate. It is important that we use the maximum scope in this legislation to define the term “structural deficit” in a way that takes Irish conditions into account.  For example Ireland is   dependent of foreign investment, which does not move in the same “cycle” as consumer spending does. Some argue that the Irish economy is so open , that it does not have an economic cycle in the normal sense at all.

AN IRISH RULE, ADMINISTERED IN IRELAND, TO KEEP IRISH POLITICIANS IN LINE
 But the bottom line is that, where previously we might have relied on external EU disciplines to keep spendthrift politicians in line, we will, if we accept the Treaty, commit ourselves to introduce permanent Irish laws to do so as well, to reinforce the rules we have made at EU level.
 In general this is a better approach.
 It is much better, in the first place, to have an Irish Fiscal Council, composed of  people most of whom  live here in Ireland , forcing an Irish Government to recast its budget, to  bring it into line with an balanced budget rule, as negotiated with the European Commission .This is preferable to relying solely  on Commissioners in Brussels to  do that job of keeping  our finances honest. That is the basic change that the Fiscal Treaty will bring about.
When is the risk of dishonest, or unbalanced, budgets most likely to arise?
The biggest dangers will be in the year before a General Election, and when the economy is booming.
Part of our problem today is that we had unduly expansionary budgets in 2002, and 2007, just before the Elections in those years. The 2007 budget, in particular, contributed a lot to today’s problems.  That temptation will arise again.
When the economy is booming, revenues will be flowing in, the temptation, to agree to permanent spending commitments that one ultimately cannot afford, will be greatest .
 That is what happened in Ireland during the time when there was an artificial and temporary housing boom, revenues from house sales were flowing in, and the Government agreed to permanent   increases in pay, welfare and pension levels, on the strength of revenues flows that could not last.
 A strong balanced budget rule, written permanently into Irish law, administered by Irish people, would ensure we do not repeat those mistakes ever again. Of course, that Irish rule will be reinforced by EU vigilance.  And the terms of the rule will have to conform to  the Treaty,  and be subject to  appeal to the European Court of Justice on that point.
 But the first line of defence against another outbreak of pre election budget irresponsibility will in future  be in Dublin, not in Brussels.
Rules like this have had a good effect elsewhere.
 In Chile, Government revenues are  dependent on royalties from copper of which the country is a major producer. A balanced budget rule in its constitution has forced the Chilean Government to run big surpluses when copper prices were high. As a result, when copper prices fell, Chile had the savings to maintain its social programmes without big cuts.
 Without a balanced budget rule in its constitution, the Chilean Government  would have had  great difficulty  persuading its people  that it should run a 10% budget surplus during the copper boom.
But if it had not done so, it would have had difficulty maintaining spending during the downturn in copper prices.
In Sweden, a balanced budget rule forced the Government to run surplus budgets during the   boom, and ,as a result, Sweden has come through the recent  crisis in much better shape than almost any  other  EU country.
EVEN WITHOUT THE TREATY, IRELAND WILL HAVE TO HAVE ‘STRUCTURAL’ BUDGET SURPLUSES ANYWAY
In the short and medium term, the balanced budget rule , which will require  every country  in the euro to have a “structural “ budget deficit no greater than 0.5% of it GDP, will have little effect here.
This is because Ireland is already obliged anyway, under new rules made last December pursuant to the Maastricht Treaty, to systematically reduce our Debt/ GDP ratio to  60% . Our Debt/GDP ratio   will peak at around 120% in 2015, so for the following twenty years, Ireland will have to run substantial budget surpluses to enable us to reduce the debt/GDP ratio, either by a repayment of debt , an increase in the GDP, or a bit of both combined.  It will only be when the Debt has been substantially reduced, that the 0.5% rule will take over as a discipline. And, as I have said earlier, this rule really only makes a difference in boom times. When times are bad, the markets force a country to  try to reduce its deficit anyway, because otherwise it will have difficulty borrowing.
The Fiscal Compact will not prevent countries running budget deficits during recessions. The 0.5% limit takes account of normal up and down cycles in the economy. That is what the word “structural” before deficit means. That is why even non euro countries like Sweden, with generous welfare systems, have signed up to the Compact. The idea that the Fiscal Compact outlaws Keynesian counter cyclical policies, put forward by commentators like Fintan O Toole, is wrong.
There are a number of other things in the Treaty, which simply reiterate and entrench rules that have been already adopted. There are also new provisions for Euro area Heads of Government to meet more often , and  for  the Dail’s budget committee to work more  closely with committees in other  Euro area parliaments.
To summarize, the Treaty will bring greater credibility to the finances of all EU countries. It complements controls at EU level with new controls at national level. For these reasons, I  urge people to vote  Yes in the referendum.
It is important now to turn to what might happen if people were to vote No. Some will argue that we should consider that as a tactic, a sort of bargaining approach.  That worked in the past, they might say. Why not try it this time? This time the rules are different, and the potential downsides are much bigger.


THIS DECISION, THIS TIME, IS NOT THE SAME AS THE ONES ON LISBON AND NICE
If Ireland votes No to the Fiscal Compact Treaty, and as a result the Irish Government is prevented from ratifying the Treaty it has already signed, the Treaty will probably come into effect anyway for the countries that have ratified it.
This is because the Treaty itself provides that, once 70% of euro area states have ratified it, it comes into force.  So if 12 of the 17 states ratify, we have the Treaty in effect for those 12 countries. No matter what the other 5 do.
 This means that the  scenario whereby Ireland was able to vote No to the Nice and Lisbon Treaties and, because Ireland’s ratification was essential for everybody else, it could negotiate for further clarifications or protocols to meet popular concerns  in Ireland, does not apply in this case.
 This sort of threshold provision is not unusual in international treaties.  Few international Treaties require ratification by 100% of signatories to come into effect.

DENYING OURSELVES ELIGIBILITY TO APPLY FOR EUROPEAN STABILITY MECHANISM
But a decision not to ratify would have a consequence for Ireland. The Treaty says
“the granting of assistance in the framework of new programmes under the European Stability Mechanism(ESM) will be conditional, as of  1 March 2013, on the ratification of the  Treaty by the  Contracting Party”
Ireland was a Contracting party, and if it does not ratify, it will not be eligible for assistance from the ESM.
We all hope Ireland will not need assistance from the ESM, and that once our present  EU/IMF programme expires  , we will be able to borrow, at  low interest  from commercial markets, all we need to cover   the ongoing shortfall between our tax revenue and our spending . But there is no guarantee of that.  We could find, when the EU/IMF programme expires, that commercial bond markets are still a bit nervous about Ireland, and  ask us to pay higher interest rates than we had  got used to paying to  our EU partners, and to the IMF.
Ratifying the fiscal compact Treaty is really like buying ourselves an insurance policy.
 We hope we will not need to make a claim on the ESM, but it is nice for us, and for those who might lend to us,   at least to know  that we are at least eligible to do so.

VOTING NO WOULD BE REJECTING AN INSURANCE POLICY..................... 

By voting No, Irish people would be saying that they do not need any insurance policy for our public finances after the current EU/IMF programme expires.
In that sense, I would argue that those who will be advocating a No vote to the Treaty, will, in practice, be advocating more, and faster, austerity in the immediate future.
To be able to survive without the possibility of turning to the ESM after the present EU/IMF programme expires, Ireland would have to convince commercial bond market lenders that we had everything fully and permanently under control, as far as tax revenue and spending was concerned. Only then would we be able to be sure they would lend to us at reasonable rates of interest.
 And we are not there yet, by any means. Even if we paid no interest at all on our debts this year, we would still need to borrow 10 billion euros to cover the gap between our spending on salaries, pensions, welfare etc and our revenue from taxes.
AND OPTING FOR FASTER AUSTERITY..................NOT A CLEVER MOVE 

In other words, we have what economists call a “primary deficit ’’ of 10 billion euros.
A primary deficit is the deficit we would have if we had no debts and had to pay no interest on debt. Most countries have debts. So most of them should run a primary surplus, so they have room to keep spending going, and also pay the interest they owe.
Ireland is not in that fortunate position.
 Our primary deficit will be about 4% of GDP this year and about 2% next year. This puts us in a vulnerable position because, even if all our debts were abolished (which is not going to happen) we still have to borrow new money just to keep going.  Those who think we can play hardball with bondholders or bond buyers, should keep the primary deficit in the forefront of their minds. 

We cannot tell them to get lost because we need  them to lend us some of the money  to pay salaries  etc, because  we are not raising enough tax ourselves yet, to cover  all of our  outgoings, even without interest on debt .
That is about to change. The Government is budgeting to have a tiny primary budget surplus in 2014, and a slightly larger one in 2015. 

In other words, if things go according to plan, we will still be borrowing in 2014 and 2015, but then  we will “ONLY” be borrowing to pay interest on, or roll over, past debts!

That is if a number of further, some yet unannounced, revenue raising and expenditure cutting  measures, are successfully implemented by then.

Suppose the Irish people reject the Fiscal Compact Treaty.
Then, to be sure we would be able to borrow without the possibility of turning to the ESM, I believe we would have to introduce a budget for 2013 that had no primary deficit at all.
This would mean  about 5 billion euros more spending  cuts  and tax increases than are now planned by the Government in agreement  with the EU and the IMF.
 I have no doubt that the advocates of a No vote do not want that. But that is the logic of their rejection of the Fiscal Compact Treaty and its consequent removal of Ireland’s   eligibility to apply, as a fall back, for funds from the ESM, if we need them.
Of course, they will try to change the subject, rather than answer that key question. They will get into the blame game. But blame does not pay bills.
Some have suggested that linking eligibility to apply for the ESM with ratification of the Fiscal Compact is some sort of “blackmail”. If it is, then any condition imposed by any lender to ensure they have a good chance of getting their money back could be called blackmail.  It is not blackmail. No one, with any sense, lends money with some conditions to secure repayment.

IT IS NOT ALL ABOUT BANKS, IT IS ABOUT DAY TO DAY SPENDING TOO

Advocates of a No vote might say Europe owes us the money anyway, because, they will say, we indirectly bailed out Europe’s banks, when we bailed out our own banks.
There is some truth in that,  as I pointed out to President Barroso of the European Commission myself  when he made some one sided remarks about Ireland in the European Parliament, but it is beside the point as far as the decision we have  to make now is concerned.
Of Ireland’s present national debt, only 21 to 27%, or 37 and 46 euros billion of it,  is attributable  bank rescue.
The rest is due to
1.) servicing other debts we have run up which have nothing to do with our banking problems and
2.) funding   the gap between day to day Government spending and revenue, a gap that is still very wide,
We have to find this money  by  borrowing.......from someone,   among  lenders who has plenty of  other  options for the use of their money apart from lending it to us.  
CONCLUSION
The next few years will not be particularly easy.
We have made progress. We have a balance of payments surplus. People are accumulating savings. Foreign investment here is at an all time high. But consumer confidence is low, and unemployment high.  The oil price rise is a threat, but the increased demand for food is an opportunity. Confidence in politics has been shaken by the Tribunal findings, but the Irish political system is fundamentally stable and capable of making decisions.
Ratification of the Fiscal Compact Treaty would reinforce the sense that Ireland is getting its act together. Failure to ratify would not derail the euro, which can go ahead without us, but it would, unfortunately, derail Ireland. 

Speech by John Bruton, former Taoiseach, and current vice President of Fine Gael, at meeting on the Fiscal compact organised by Malahide branch of Fine Gael in the Grand Hotel, Malahide, at 8pm on Monday  26th March 2012

 

AN IRISH CENTURY.... ’STUDIES’ , 1912-2012

 Remarks by John Bruton, former Taoiseach, in Newman House, St Stephens Green, Dublin 

 

I am delighted to have been asked to speak at the launch of this beautifully produced volume, which is an exceptionally well chosen, and contemporarily relevant, selection of essays, published  over the last 100 years in the Jesuit journal “Studies”.

“Studies” first appeared in March 1912, exactly a century ago. 

In the time since receiving an advance copy of the book, I have read most, but not all of Bryan Fanning’s selection of essays.

Undoubtedly the most startling essay in the book is “The Canon of Irish History,   A challenge” by Father Francis Shaw SJ.

It was intended for publication in 1966, but was deemed too controversial for publication by the then editor of Studies . It was eventually published in 1972 under the courageous editorship of Fr Peter Troddyn S J , who happens to have  taught me at school. 

As we prepare to commemorate the enactment of Home Rule in 1914, the sacrifices by Irish soldiers in the Great War, and the deaths in and after rebellion of Easter 1916, the content  of Fr Shaw’s essay is as relevant, and probably as controversial,  today,  as it was 46 years ago, when it was first offered for publication.

Fr Shaw analyses the physical force tradition of Irish nationalism and , in so doing, quotes extensively from the writings of Patrick Pearse.

He questions Pearse’s identification of Nationalism with Holiness , his  hatred of England, and his  glorification of   death and violence.

Writing in December 1915, when the horrors of the Great War were already all too well known in the homes of Ireland , Pearse said

“The last 16 months have been the most glorious in the history of Europe. Heroism has come back to the earth.  It is good for the world that such things should be done. The old earth needed to be warmed with the red wine of the battlefields”

On another occasion, Pearse sought religious vindication for such a view. He said

“The Christ that said   ‘My peace I leave you, my peace I give you’,  is the same Christ that said  ‘I bring not peace but the sword’”

Pearse expressed the view that Ireland would not be” happy again”, until she recollects the “laughing gesture” of a young man going into battle, or “climbing to a gibbet” for  his  hanging.

All commemorations serve an educational purpose for the future. It is important that such sentiments as these not be glorified in 2016, and that their consequences be fairly assessed.

They were misleading to people 100 years ago, and they are just as misleading today.

Warfare may sometimes be necessary as a last resort in self defence, but it is never glorious or holy in the way Pearse, and many others of his generation, apparently saw it.

The wonderful thing about this volume is that it enables us to read what authors thought, at the time, without the opportunity for selective reinterpretation in the light of subsequent events .

Yet much of the writing is remarkably up to date and pertinent.

We have John Maynard Keynes 1933 critique of what we now call globalisation, George Russell (AE)’s 1923 critique  of the negative cultural impact of   what we now call Armed Struggle, and a controversy in 1938 about Daniel O Connell and his view of his Gaelic heritage.

We have interesting insights from Tom Garvin and Raymond Crotty about what people thought about economic development in the time before the Celtic Tiger and the Celtic Bust. 

There is an essay , written by 1983 ,by John Sweeney on Social Inequality, something that has not  diminished in the intervening years, and which may  have been contributed to by  the globalisation that Keynes had written about,  50 years before.

We have Sean Lemass’ recollection of the 1916 rebellion, and excellent biographical essays on John Redmond and Tom Kettle.

Kettle, who died  at the front in the Great War, had a different attitude to war to Patrick Pearse. 

He said

“I want to live to use all my powers.....  to drive out of  civilization the foul thing called war, and put in its place  understanding and comradeship”,

And he regretted the 1916 rebellion, because he felt it spoiled his dream of a”free united Ireland, in a free Europe”.  

 

I hope Tom Kettle will be remembered in 2016, which will be the centenary of his death, because his message has great relevance to our times.

Stephen Collins essay on John Redmond deals with the career of a man whose memory he says was “systematically buried” when the new state came into being in 1922.

It is important to say that Home Rule was enacted into law in 1914 as a direct result of John Redmond’s work. I also believe that  the institutions of the state, that became operational in 1922,  owed much to the civil service work done in the  1912 to 1914 period, in preparation for Home Rule .  

As befits a Jesuit publication, there are interesting essays on religious practice in Ireland, on the theology of Dr Paisley, and the response of the Catholic Church to the abuse scandals.

I congratulate Studies, and the UCD Press, on an excellent publication.

BRITAIN AND THE EUROPEAN UNION

In a recent poll, 57% of Britons said they felt EU membership is bad for Britain. Only 32% thought it was good.

Those with a negative view tend to be older, and those with a positive view of EU membership  younger, so  there may be a  gradual move in a more positive direction. Of people under 34 years of age, 45% have a positive view of EU membership, as against only 22% of the over 55 year olds.

It is a pity that British public opinion is so negative towards the EU,  because it inhibits British influence in the EU, which often would be a force for good.

 British political leadership, by Mrs Thatcher and Commissioner Cockfield, helped create the EU Single market. British officials are, in my experience, among the very best in the European Commission.  British pragmatism is a useful antidote to the doctrinal approaches that sometime influence the policies of other EU member states.

I was very disappointed that the British Prime Minister did not allow the fiscal compact to be incorporated in an amendment to the existing EU Treaties, and forced the other states to adopt it as an intergovernmental Treaty outside the EU framework.

Since 1992, Britain has an opt out from the euro, written into the EU Treaties, and it could have opted out of the fiscal compact too, while ratifying it for application to  other  EU countries.

That would have consistent with previous British statements to the effect that it wants to euro to succeed, because the euro area is an important British market, but it does not want to join it itself.

The underlying reasons for British, and more particularly southern English, attitudes to the EU probably have very deep historical roots.

 Southern England felt itself directly threatened from continental Europe at the time of the Spanish Armada in 1588, during Napoleons domination of the continent in the early 19^th century, and again, of course, in 1940. The last successful invasion took place in 1066!

On the other hand, the existence of the euro, and of the EU Single market is one of the reasons for the success of London as a financial centre, and for the fact that that part of Britain is more prosperous than any other.

Security is a priority for Britain.  This is reasonable. Without security, there can be neither law nor prosperity.

The Royal Navy was the original guarantor of British security. The relationship with the United States has, since 1940, become even more important that its own Navy, as the guarantor.  I believe that a strong EU, in which Britain played a leading role, would actually provide Britain, including the South of England, with better all round security, than its present  almost exclusive reliance on a power on the other side of the Atlantic ever can.

EXPLAINING EUROPE’S ECONOMY IN JEDDAH

I was in  Jeddah in Saudi Arabia this weekend  to speak at the  Jeddah Economic  Forum. The four day  Forum  has taken place every  year, for the past  ten  years.
Previously it has been addressed by then serving President Mary McAleese of Ireland, and  by then  former Presidents  Giscard d’Estaing of France, Bill Clinton, and George HW Bush of the United  States. John Major and Helmut Kohl have also addressed the Forum.
This year the former Prime Minister of Pakistan, Shaukat Aziz will speak.
Jeddah was founded as a fishing village in 500 B.C. It was incorporated into Saudi Arabia in 1924 after the end of the Ottoman Empire.
Today it is the commercial centre of Saudi Arabia and is  internationally oriented as it is the gateway, through which Muslims from all over the world  pass, on their way to Mecca on pilgrimage.
Jeddah is the headquarters of the Islamic Development Bank, and of the International Association of Islamic Banks.  It was an important place to visit in promoting Ireland as an international financial services centre. Ireland has passed legislation to facilitate the provision of Islamic  finance  from an Irish base.  Ireland also hopes to attract Saudi investment in renewable energy and other sectors.
There is a great deal of construction activity taking place in Jeddah.

GLOBALISATION   -   HOW SHOULD COUNTRIES COOPERATE?
I was asked to speak in a session on “Building Blocks-Models of Regional Cooperation”. The European Union is the most advanced model in the world of regional cooperation and there is a lot of interest in Asia in how it works.
There is a pervasive scepticism in the English language media about the prospects of success of the European Union.  Many of the same people, who predicted that the euro would never even be established in the first place, are now enthusiastically predicting its imminent demise.
But events are proving that EU institutions are able to adapt, albeit slowly, to new challenges.
I explained how the EU works and spoke of the recovery under way in Europe after the economic crisis. It has, of course, been a difficult process.  
Only in the last few weeks have adequate mechanisms been put in place to monitor overdue reforms, and to help remove underlying imbalances in the European economy. These things should have been done when the euro was originally launched in 1999.
During the down turn, Europe lost market share in export markets. Even Germany has had that experience.
If Europe is now to regain its dynamism, it will have to be able to reallocate resources, both human and material, more quickly from sectors where demand is in decline, to ones where it is on the increase.
Restrictive practices and unnecessary rules- in  entry to the professions, in the setting of wages, in education-inhibit the efficient reallocation of resources, and  thus prevent the creation of new jobs.  Getting rid of these restrictions is just as important as restoring the state finances.
 Reports by the European Commission to the heads of EU Governments are beginning to identify these bottlenecks. Passing laws to remove the bottlenecks will be a national responsibility, and vested interests will do their best to slow down progress, as we are seeing in Spain and Italy at the moment.
To meet the challenge of the rising, and more youthful, economies of Asia and Latin America, Europe will also have to put greater emphasis on efficient use of all its limited resources.  For example much energy is wasted in badly insulated buildings.  Only 40% of Europe’s waste is recycled. Huge amounts of food go to waste.  Arable Land is being wasted too. An area the size of Cyprus in concreted over for development in Europe every ten years.
 But the greatest waste of all, is the unemployment of young people.
There is something desperately  wrong with a  situation where, notwithstanding heavy investment in education and free movement of young people from country to country  within Europe,  youth unemployment is  19% in the UK, 22% in Belgium, 28% in Ireland  30% in Portugal,  and 48% in Spain.
 
THE EU IS NOT BECOMING A POLITCAL UNION,  A TRANSFER UNION,  OR A FISCAL UNION—       
IT IS SIMPLY BECOMING A DEEPER “UNION OF RULES”
Notwithstanding the major challenge to the euro posed by the sovereign debt crisis
  + the EU is not, as some suggest,  only able  to meet financial crisis if it first  becomes a political union.  Countries retain their own military forces and thus their own foreign policies.  Their national cultural policies remain unaffected
  +the EU is not about to become a transfer union either.  Countries in difficulty are being offered interest bearing loans, not subsidies. Once the  loans are paid back they will stand on their own  feet.
   +Nor is the EU becoming a fiscal union, because the vast majority of tax and spending decisions will  continue to  be taken at national level. The new EU rules will simply require that countries balance their books. It will for each to decide whether they want to do that at a high, or a low level ,of spending.
The EU is, however, under the recently agreed fiscal compact and other measures recently enacted,  becoming a much  deeper “Union of Rules”. This is a natural  follow on from the  development  of the EU in the past
 Originally , the EU set rules in regard to goods and services, so that these could be freely traded across borders.
 Then, as people moved from country to country, the EU came to set rules on mutual recognition of qualifications and rights to social security.
 With the establishment of the euro in 1999, the EU started to implement rules on debts and deficits.
 Now these rules, which were too weak and imprecise and which were  flouted by nearly every country, are being strengthened and made  automatic.
New norms are being set, on how budgets are presented, on levels of private debt, and on excessive trade surpluses as well as on excessive trade deficits. 
The aim is to ensure that the EU has a consistent economic policy, which will ensure that sort  of difficulties ,which came to a head in  2008, will never  again arise.
This is an evolutionary process. It involves trial and error.