Discourses surrounding the Economic and Monetary Union: empirical evidence from parliamentary debates and print media in Finland and Ireland Jari Riiheläinen Dept of Political Science and International Studies University of Birmingham

Paper presented in the workshop ‘Public Policy and the Mass Media’, ECPR Joint Sessions, Helsinki, 7-12th May 2007

Draft Paper – Please do not quote without permission

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Introduction

Economic and Monetary Union (EMU) has been, and continues to be, a controversial

issue in the Politics of European Union (EU). This was illustrated by recent debates about the the

viability of the Stability and Growth Pact (SGP), and debates about punishing countries, such as

France and Germany, for breaking its rules. Before EMU was achieved, it required a lot of

persuasion from the political elites to make it acceptable and legitimate among European citizens.

Against this background, I will compare elite and media discourses in two EMU-member states

(Ireland and Finland) in order to shed light on these strategies, concentrating especially on how

EMU is perceived to affect the welfare state and public spending. I have gathered empirical

evidence from the parliaments and print media in Ireland and Finland around important milestones

in the development of Economic and Monetary Union, over the period between 1992 and 2003.

The main goal is to establish to what extent there is evidence of elite strategies in order to (de)-

legitimate Economic and Monetary Union in the eyes of citizens. Hay and Rosamond (2002) argue

that political elites use discourse instrumentally in order to legitimate political choices, where EMU

can be seen as one such political choice. Since Finland and Ireland have both some similarities, but

perhaps more importantly, they have different welfare regimes (Esping-Andersen 1990), it makes

them good comparators in issues relating to EMU and the welfare state.

Economic and Monetary Union is an issue that goes into very heart of statehood, since a

national currency has traditionally been seen as an important symbol of a soverign state. Therefore,

the issue of EMU-membership is expected to be very controversial. Moreover, it is not only the

fact that Economic and Monetary Union results in losing the national currency, it has been argued

that membership in EMU will limit the room of maneuvre in domestic policy by imposing

constraints on public spending through the Stability and Growth Pact (SGP), which stipulates that a

member state cannot have a budget deficit of more than 3% of the Gross Domestic Product. The

effect of EMU is is seen in two opposite ways in the academic debate. On one hand, EMU is seen

as ‘naturalisation’ of neoliberalism, thus prioritising monetary policy and fighting inflation over

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fiscal policy and employment, which imposes constraints on public spending due to SGP

(McNamara 1999, Ryner 2002). On the other hand, EMU is seen as a buffer protecting national

welfare institutions from the harsh pressures of globally integrated markets (Jones 2002). My aim

is to see to what extent these opposing arguments are articultated in the discourse. Given the

differences in welfare regimes in Ireland and Finland, one would expect to find different strategies

in articulating these arguments.

This paper is divided into three parts. First, I will briefly set the scene for the case studies

and show the justification for comparing Ireland and Finland. Second, I will present empirical

evidence from parliamentary debates and editorials print media. Third, I will highlight the main

similarities and differences that emerged from the analysis.

Background to the case studies

At first one may wonder why take Finland and Ireland as object of comparative

analysis. The comparison can be justified on the basis of important similarities and differences that

they have. Firstly, Finland and Ireland are small member states in the European Union, and now

also members of the Economic and Monetary Union, with populations of 4.1 and 5.2 million

respectively. They have long history of political neutrality, which they have sought to maintain

also as members of the European Union. Both countries are also peripheral countries in Europe,

and they are also culturally relatively homogenous. The main difference between the countries is

their welfare regime. Ireland is a ‘liberal’ welfare state, which resembles the United Kingdom and

the United States, for example. Finland, on the other hand, is a ‘Social Democratic’ welfare state,

which has universalist coverage of benefits (Esping-Andersen 1990), and which uses larger

proportion of its GDP to fund it. Hence, one would expect certain differences to emerge in the

EMU-debate in arguments that relate to the welfare state. Another difference is that Ireland joined

the European Union (then Europen Communities) already in 1973, while Finland joined alongside

Austria and Sweden in 1995.

Analysis of the parliamentary debates

The collection of the speeches in the Finnish parliament was undertaken through search engine on

the internet, with the search term “EMU”, concentrating around important milestones in the

development of Economic and Monetary Union:

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1. The crisis of the Exchange Rate Mechanism in August 1992

2. The ratification of Treaty of Maastricht in November 1993

3. The debate and vote on EU memberhship in the Finnish Parliament in November 1994

4. Decision by the European Council to name the currency ‘Euro’ in December 1995

5. The adoption of the Stability and Growth Pact in June 1997

6. The debate and vote on EMU mebership in the Finnish Parliament in April 1998

7. The launch of the Third Stage of EMU in January 1999

8. Reprimand by the EU-commission for Ireland for expansive budget in February 2001

9. The launch of the physical currency in January 2002

10. The referendum in Sweden on Euro in September 2003 and the debates on punishing

Germany, France and Ireland due to flouting the rules of the Stability and Growth Pact

My selection criteria were that either the speech had to be explicitly about the relationship between

EMU and the welfare state, or it had to be about whether the country should join EMU or not.

Therefore, I excluded speeches in which EMU was mentioned in a context not directly linked to the

debate. I found 732 speeches in Finland around the above dates (see figure 1, Appendix 1). When

undertaking the search for Ireland, the number of speeches was very low compared to Finland.

Therefore, I included the whole time period between August 1992 and September 2003 in the

analysis, not just the timeframe above the above events. Strikingly, even by including the whole

period, I found only 218 speeches relevant to the debate. This suggests that Economic and

Monetary Union was more controversial issue in Finland than in Ireland. One caveat should be

mentioned here, however. In Finland it is possible for parliamentarians to request short replies of

no more than one minute to any issue under discussion, whereas in Ireland this did not happen. As

a considerable number of the speeches found in Finland were such replies, this may have inflated

the number of speeches found. Nevertheless, if this kind of speaking opportunity was used often, it

also suggests that the parliamentarians wanted to have their voices heard in this issue. Furthermore,

as the difference between the number of speeches is so large between Ireland and Finland, even

with the whole time period included in Ireland as opposed to a limited period for Finland, one can

relatively safely argue that the issue was debated more intensely in the Finnish parliament.

I also categorised the arguments that emerged from the parliamentary debate in order to enable a

quantitative analysis of the speeches, although by no means do I attempt to draw any far-reaching

conclusions on the basis of such limited number of cases. The categorisation here is merely a device

of seeing what type of arguments were most common in each case.

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Policy required by the SGP is good economic policy

0

20

40

60

80

FIN 50 6.83

IRE 80 36.7

speeches percentage

The category that included arguments about “policy required by the Stability and Growth Pact is

good economic policy”was by far the most common one in Ireland, with 80 occurrences which is

36,7 per cent of all speeches. However, it was only the fourth largest category in Finland, with 50

speeches and 6,83 per cent of all speeches. The economic policy that is required by the Stability

and Growth Pact means that the budget deficit must be below 3 per cent, thus making Keynesian

demand-management in the economy to boost employment, for example, and borrowing for

maintaining public services more difficult. The result is thus quite clearly what one might expect

when the histories of the two countries is taken into account: traditionally, the welfare state in

Finland has used more public finances than in Ireland, and therefore there would expected be less

acceptance of policies that might limit the ability to finance the welfare state.

5

0

20

40

60

80

EMU brings stability into economy

FIN 67 9,15

IRE 30 13,76

speeches percentage

The above category was the second largest in Ireland and the third largest in Finland. Again, one

can see that when looked in proportional terms, this category was more common in Ireland than it

was in Finland, although in absolute numbers there were more speeches in Finland. However, the

difference is not very large. This suggests more wide-spread acceptance of the so-called “stability

culture” (prioritising monetary policy and fighitng inflation over employment) in Ireland than in

Finland, examples of which the two above categories are. However, these two categories were the

most common pro-EMU arguments in Finland, but they were not the most common arguments

overall (see Appendix 2).

0

5

10

15

20

EMU creates employment

FIN 4 0,55

IRE 19 8,72

speeches percentage

EMU was perceived to affect employment in two ways: On one hand, it was argued that EMU

creates employment, and quite clearly, this argument was more common in Ireland than it was in

Finland, in both absolute and relative terms. On the other, however, in Finland it was also argued

strongly that EMU is in fact detrimental to employment (the most common category, with 74

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occurences, and 10.1 per cent of all speeches). By contrast, this argument was completely missing

from the Irish debate.

0

20

40

60

80

TofM convergence criteria are too strict

FIN 71 9,7

IRE 8 3,67

speeches percentage

The above argument was one that most explicitly criticised EMU and its relationship with the

welfare state, i.e. highlighting the potential problems that EMU might cause in funding the welfare

state. The results suggest that EMU’s negative effect on the welfare state was articulated more

often in Finland, which is something that would be expected, when Finland’s tradition as Social

Democratic welfare state is taken into account.

Comparison of different political parties

After the initial categorisation, I also grouped together categories that were pro- and anti-EMU,

which would allow pretty basic comparison between political parties to see which ones were most

in favour or against EMU (See figure 2 in Appendix 1 for share of speeches).

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PRO/ANTI EMU by Party and Country

0

20

40

60

80

100

120

140

PRO 96 125 90 30 4 0 14 0

ANTI 2 13 44 7 10 9 78 4

Con/Fin Con/Ire SD/Fin Lab/Ire Gre/Fin Gre/Ire Left/Fin Left/Ire

Note: As the classificiation parties in terms of “leftness” or “rightness” is not very clear in Ireland, the choice of Fianna Fáil (as

opposed to Fine Gael) in this comparison was made on the basis of larger number of speeches. Figures for Fine Gael were 47 pro-

and 7 anti-EMU speeches, indicating that both parties were strongly pro-EMU.

In both countries it was the Social Democrats (Labour) and Right-of-Centre parties (Fianna Fail and

Fine Gael) that were most strongly for EMU, while the Greens and Left-wing parties were most

strongly against. When the potential negative effects of EMU are considered (more unemployment,

welfare cutbacks), it is perhaps surprising that the Social Democrats and Labour were overall more

pro-EMU. This would imply that there is a pro-EMU coalition emerging organising between

centre-left and centre-right parties, and also the move of Social Democrats and Labout more

towards the centre. However, the exception in Finland was the Centre Party (former Agrarian

Party, right of centre in political spectrum), for which there is no counterpart in Ireland. They have

been very critical of the European Union and also EMU (with 22 pro- and 87 anti-EMU speeches),

due to potential problems EU and EMU would cause for Finnish agriculture.

Other issues regarding EMU

In addition to the above categories, certain similarities and differences emerged. To a

large extent, the issue of EMU was ‘depoliticised’ in both countries, i.e. it was presented as means

to achieve sensible management of economic policy, to which there really is no other alternative,

thus strongly rejecting Keynesian economic policies. In both countries the criticism of EMU came

mostly from smaller parties (with the exception of the Centre Party in Finland), and the governing

parties often attempted to marginalise criticism, by arguing that anyone who opposes EMU is

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somehow reactionary or “enemy of European integration” in general. The depoliticisation was

taken in Finland as far as accusing opposition to EMU of ‘politikointi’,which translates as “making

politics”. This argument was used so as to marginalise the arguments of the opposition by saying

that joining EMU was such an imperative that it should not be ruined by party politics. In both

countries the political arguments for joining EMU were common, i.e. that joining EMU would

allow them to be at the core of decision-making in the European Union. This argument was backed

by arguments of reducing dependence from the UK (in Ireland) and westernisation (in Finland)

which would be completed by “going to Europe”. These similarities seem to illustrate the will of

the peripheral countries to be at the heart of Europe or European Union, which were, in fact, often

treated as synonyms. When the will for joining EMU is so strong, this may cause the possible

negative economic effects of EMU to be sidelined, of which there is some evidence on the basis of

the analysed material. However, in terms of number of speeches, the economic arguments were

used more often than political ones. All in all, in both cases, the most common arguments for

joining EMU concerned economic stability and economic growth. (For most common categories,

see Appendix)

Analysis of the print media

When comparing the print media in Ireland and Finland, there are certain differences. The main

difference is that there is only one truly national quality daily newspaper in Finland that would be

sensible choice as object of analysis, i.e. Helsingin Sanomat. In 2006 Helsingin Sanomat had a

daily circulation of 426,117 on weekdays and 476,211 on Sundays according to the Finnish Audit

Bureau of Circulation Statistics. This is not an insignificant amount of readership in a country with

a population of 5.2 million, and as a result, Helsingin Sanomat has strong influence as opinion

former. Indeed, Pertti Klemola calls Helsingin Sanomat “a state authority, an institution with its

own independent social and political will” (Klemola 1981: 13).

The situation is quite different in Ireland, however, so there is need to examine more

than one newspaper, in order to have a more balanced view of the debate. My choices were Irish

Independent and The Irish Times. When it comes to circulation, they are the two largest quality

dailies in Ireland, with circulations of 164,202 and 117,030 respectively (Audit Bureau of

Circulations). My justification for choice of these papers was that The Irish Times is the

‘Newspaper of Record’ in Ireland, while Irish Independent is the most popular quality daily

newspaper in Ireland in terms of circulation.

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0

10

20

30

40

Editorials in newspapers

Positive 36 7 23

Neutral 34 6 22

Negative 5 13 4

HS Times Indep

The above figure shows the editorial attitudes in a simplified classification of how pro- or anti-

EMU each newspaper is. The result suggests that Helsingin Sanomat clearly endorsed EMU-

membership), with only five clearly negative editorials. On other hand, in Ireland the picture was a

mixed one: The Irish Times was more critical of EMU than Irish Independent. One common feature

for all the newspapers was the fact that there were nearly as many neutral as there were positive

editorials.

The editorial line of Helsingin Sanomat

The debate focused first on the debate whether Finland join the European Union, and

thus EMU was not explicitly discussed very often, being only mentioned a few times, since in the

first half of the 1990s it was not at all clear whether EMU will be born on schedule, or indeed, at all.

Helsingin Sanomat was somewhat critical of EMU at first, with its title of an editorial “Monetary

union membership leads to ball and chain.” They go on to argue that “ EMU will be a straitjacket.

It will be a doubt whether Finland will fit into it and whether it can breathe” (16.12.1994). The

argument about straitjacket did not concern welfare spending directly, but it was about the need of

flexibility in wages and raw material prices, when the exchange rate can no longer be flexible.

However, Helsingin Sanomat took the view that staying outside would be a bad option as well, and

would probably require even tighter fiscal policy.

When it comes to the Finnish EU membership, it is necessary to mention what the view

on this was, as this would be reflected later in the EMU-debates as well. In its editorial on

15.10.1994, Helsingin Sanomat takes explicit view supporting Finnish EU-membership. Their

argumentation goes along the lines that the current conditions in Europe will not continue anyway

and “Finland either joins the politically and economically dynamic group of countries, or will

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willingly stay outside and thus join Baltic and East-European states”. Furthermore, “EU-

membership is also an image question: Finland either belongs to EU that is known by everybody, or

it does not belong to it, and we will not be recognised by many” and “one should not be hindrance

to development, but one must give also young people means to build the country as a part of

enlarging Europe that belongs to all of us”.

This kind of argumentation continued later in the debates about EMU-membership, and

it could be argued that the fear of being left out in the European developments might override the

purely economic arguments, first regarding EU-membership and later EMU-membership. Overall,

it seemed that there was an inbuilt bias of “Europe good” and “Staying out bad”. Although the

paper was not uncritical of everything related to EU and EMU, the underlying theme was that we

must “go to Europe” and we “cannot afford to stay out”, with Europe being synonymous with the

European Union.

In 1992, when the recession started to approach its lowest point, Helsingin Sanomat had

rather ambivalent view on the welfare state. On one hand, “even the shock treatment of savings

will not cure the basic problem, the public sector that is based on state income levels of 1990 and

maintained through debt” (20.9.1992). But then, three months later (13.12.1992) they argued that

“the social policy traditions reflecting our political culture have been strong ... there is willingness

to maintain the current welfare state both in Europe and in Finland”. But again, in 1994, they go on

to argue that “Aho government has not made enough cuts, so the following government has to

continue on that road to avoid the growth of debt” (12.9.1994) and “only budget cuts can be used to

alleviate debt” (22.9.1994). At this point they do not cite EMU as a reason for budgetary cuts, but

in 1995 the link between EMU and budget consolidation becomes clear, when the paper states that

“government’s economic policy is even tighter than required by EMU, which characterises next

year’s budget” (6.9.1995). Furthermore, on 29.12.1995 Helsingin Sanomat argues that “EU

membership has brought stability for Finland ... the only way to increase international

competitiveness through further integration”. Although they do not say it clearly, further

integration here means EMU, and this is presented as the only way to rescue the Finnish economy.

Their view on the welfare state is still somewhat critical, when they argue that “there should be

more incentives and clarity in social benefits” (30.12.1995). On 26th June 1997 they advocate

“thorough examination of the role of the public sector” and say that the public sector cannot be

maintained with debt, which corresponds to the aims of EMU as well, even though it is not said

explicitly.

On 18th May 1997, Helsingin Sanomat takes the explicit view that Finland should join EMU among

the first wave of countries, with arguments ranging from ‘being outside would be more risky’, and

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‘EMU would bring stability’, to political arguments about being in the core of European decision-

making, as well as “EMU being a step in the security policy road started with EU-membership”.

They accept that getting into EMU-shape was a tough road, and problems are not over, and also the

economy of Finland does not fit well with other European economies. But still they advocated the

membership, and the overall theme is that Finland cannot afford to stay outside EMU. This view

was reinforced after the Finnish Parliament voted for EMU membership on 17th April 1998 (135

yes, 61 no, 1 empty votes, 2 absent, with 2/3 majority in favour). They argued that “Prime Minister

Lipponen pushed Finland through a rock to EMU ... he managed to get Social Democratic Party,

Left Alliance, Trade Unions and also Greens behind EMU membership in a long process, which

was skillfully mastered ... in public EMU discussion we have not had the chance to have influence

whether Finland would join, only about when it will join ... It is easier to be inside with large

majority than to stay out with only a few countries” (18.4.1998). After EMU was born, Helsingin

Sanomat envisaged some problems that might arise, for example that Finland would have to have

tighter fiscal policy than the balance of our own economy would require (3.1.1999). In the end,

however, they did not see any other viable option but to join EMU.

When the physical currencyof the EMU was coming into being in 2002, Helsingin

Sanomat had quite a clear, somewhat neoliberal view of the welfare state: in a discussion about

Finland’s stability programme, they again demanded more incentives in the unemployment benefit

and pension system, and also advocating the discussion about values, which “cannot be avoided:

maintaining the welfare society means clear choices” (24.11.2001). They also criticise European

governments for not doing enough during economic boom, what EMU required of them, meaning

budget consolidation (25.1.2002). Helsingin Sanomat goes on to state that “Finnish people can be

proud that we have been able to make difficult cuts and have disciplined economic policy. Now

that we have been accepted among the best countries when it comes to our credit rating, there will

easily be temptation to loosen the purse strings and say that now we can afford all the things that

have been denied from us for ten years ... as far as welfare society is concerned, the basic question

is what is the responsibility of the society in basic services and the income of the citizens. In a post-

industrial society, in which the nature of work is changing, this is a “fire prone” question. And it is

a central question, when thinking how to make economy more dynamic” (3.2.2002). In 2003 they

go on to criticise France and Germany for breaking the Stability and Growth Pact, as this would

bring instability into Europe and possibly force higher taxes, which in turn would make investors

avoid Europe (14.9.2003). Furthermore, in their opinion, the fines for flouting the Stability and

Growth Pact should be automatic, which would prevent accusations between EMU member

countries (5.11.2003).

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In order to summarise the view of Helsingin Sanomat and welfare state, one could

conclude that at first they were slightly concerned about the effects on the Finnish economy, but not

on welfare state as such, as the cuts during the deep recession were necessary anyway. On one

hand, they argued that maintaining the welfare state is important, but one the other, they go on to

say that we really cannot afford to have the welfare state in the present form. There were also signs

of embracing neoliberal rhetoric, when they advocated strict control of EMU member states’

finances, and also they seem to question the universalism of the welfare state by asking what really

the function of the welfare state is. The paper also strongly emphasised the necessity of

westernisation of Finland through EU and EMU membership, and the policy of staying outside not

being an option.

Editorial line in the Irish Times

In 1992 withing the timeframe examined, there was only one editorial about EMU, which only

stated that “the current market turmoils are also related to the move to EC economic and monetary

union. The commitment of EC members to the EMS (European Monetary System) is part and

parcel of the move to EMU” (21.7.1992). However, they did not really say whether the move

towards EMU was positive or negative. The Irish Times returned to the issue of EMU in their

editorial on 30.1.1996: “It is ironic that doubts about the single currency timetable are being raised

just as the European Commission launches its campaign to persuade the public of the project’s

merits ... The main motivations for the move to EMU are political. Europe’s politicians must

persuade their voters that the project also makes good economic sense.” On May 26th 1997, the

paper raises doubts about the discipline imposed by the Stability and Growth Pact: “It is essential if

monetary union is to work that member governments have sufficient scope to adjust their budgets

within these rules ... For Ireland, such budgetary flexibility is essential ... We must have sufficient

flexibility to respond to adverse circumstances such as sharp fall in sterling by adjusting taxes and

spending levels.” Although they do not question the Pact as such , they make the point the

flexibility is needed. But on the other hand, they also argue that “it is a most serious flaw in this

Government’s record that it has consistently missed its own spending targets. And it has not

emphasised the need for greater control during the campaign to date” (ibid.). Thus, the calls for

flexibility are not raised so that the Government could maintain public spending, but having the

emphasis on maintaining competitiveness through, for example, tax cuts and maintaining wage

restraint through Social Partnership (ibid.).

The issue of UK participation was also brought up in the editorials. For example, there

was discussion about the possible exchange rates with Sterling (1.4.1998), and they argued that

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“Ireland enters EMU economically strong and politically confident that it can deliver reduced

transaction costs, low interest rates, price transparency and diminished uncertainty, despite the

initial non-participation of the UK” (4.4.1998). It seemed to be the case that even though the

problem of UK not being a member in EMU was recognised, it was thought that they would

eventually join, and the political reasons for Ireland joining EMU would override these concerns.

The political aspect of EMU was also seen as important: “It is artificial to separate the

politics from the economics of the EMU-project. In both dimensions it is a response to the end of

the Cold War and the resultant prospect of unifying the continent after decades of division.

Economically it is also necessary to complete and underwrite the Single Market ... The EU is

ambitious experiment in domesticating inter-state relations, transforming diplomacy into politics.

The Euro brings that process a decisive stage further. But it must be borne in mind that it is also an

unprecedented experiment, which cannot be judged by the standards of previous developments in

building nations and states”. (2.1.1999).

When the Finance Minister, Charlie McCreevy, was reprimanded by the European

Commission and also other member states in February 2001 for having expansive budget, which

was not in line with the agreed budgetary guidelines within EMU, the Irish Times was critical of his

handling of the affair. McCreevy was defiant, and argued that Ireland should be able to have the

expansionary budget, as her economy was doing so well. The Irish Times argued that “what is far

more puzzling – and worrying for the future – is Ireland’s complete isolation on the question and

the extent to which this State’s political capital in the EU has been needlessly and thoughtlessly

expended in recent days and weeks” (13.2.2001). Even though they were critical of McCreevy’s

actions, earlier they stated that “it would be wrong to suggest that Budgetary policy is the main

reason for the high inflation rate ... a reversal of Budgetary tax cuts would be unlikely to have a

measurable impact on the inflation rate, while any postponement of capital investment plans would

be unwise” (2.2.2001). Thus, the paper seems to defend some of McCreevy’s actions, but they are

afraid that there are negative political consequences for Ireland. But then again, in the same

editorial they say that “there must also be a suspicion that dislike of our low corporate tax regime in

some of bigger EU capitals has been a factor in the Commission’somewhat heavy-handed tactics.

However, the Government here cannot ignore the views of our EU-partners”(ibid).

On the eve of the introduction of the physical currency, the Irish Times took a very

positive view of EMU, with the headline “Out With The Old, In With The Euro”. they stated that

“the introduction of the Euro is a powerful symbol of closer EU-integration” but conceded that “It

is now evident that the benefits of the euro can only be built in the long term, and that their

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emergence cannot be taken for granted” (31.12.2001). They also argued that “inevitably other

issues - such as tax harmonisation – will also come onto the agenda” (ibid.).

In autumn 2003 the Irish Times also criticised the Stability and Growth Pact: “there is a

case that low debt countries such as the Republic [of Ireland] should be allowed to borrow slightly

more to fund key infrastructure projects. In theory there is a good argument for this; in practice,

however, there are still many issues here in terms of getting value for money from current

investment levels” (29.10.2003). It seems that even though they criticise the borrowing levels, the

case is made for more to investment borrowing, rather than maintaining social spending, for

example. After the ‘no’-vote in the referendum on EMU in Sweden, the Irish Times argued that

“The single currency has been successfully introduced and is functioning well as a key player in the

international economy. Its design and optimal policy framework must be subject to continuing

review, balanced against the need to ensure its stability and credibility” (15.9.2003). Although they

do not say it explicitly, the “optimal policy framework” clearly refers to the Stability and Growth

Pact, and to the need to change it slightly.

The editorial line in Irish Independent

When examining the editorials from the Irish Independent in 1992, it is remarkable how positive

they are about the Treaty of Maastricht, in which the aim of creating EMU was specified. However,

first they seem to argue that the Treaty of Maastricht is not about EMU: “It is a stock chant of the

“No” lobbyists that we are trying to enter post-Maastricht Europe for monetary reasons. How this

condescending attitude is going to deter us baffles comprehension” (4.6.1992). They also argue that

the Treaty will help solve the unemployment situation, and fearing that the country would not

survive a “no”-vote: “This point is recognised by the vast majority of the firms surveyed by the

Confederation of Irish Industry” (15.6.1992). On 18th June 1992, the day of the refendum on the

Treaty of Maastricht, the paper gives its explicit backing for it: “Ireland has shared amply in the

benefits of Community membership. The economic advantages are there for all to see, but we have

also broadened our horizons, overcome part of our sad historical legacy and our psychological

dependence on Britain. To vote against Maastricht would be to throw away the psychological no

less than the economic advantages. The unfavourable economic consequences – on investment,

interest rates and employment – would make themselves felt quickly”. It seems that the Treaty of

Maastricht is presented as something that would either make Ireland succesful or not. Later, at the

time of the currency turbulence in Europe, they argue that “Above all, the Taoiseach (Prime

Minister) and the Minister for Finance must continue to support European Union whatever the

French [referendum] outcome. For only with a single European currency under the control of an

15

accountable single banking authority can it be ensured that narrow national self-interest never again

threatens the economic progress of this country and that of all our European partners” (19.9.1992).

In 1995 the Irish Independent seems to have adopted very neoliberal view. On 3th

December 1995 they argue, after a receiving information on confidential report on welfare: “...

examples of the problems created by a complex, and excessively lax, social welfare code cobbled

up to meet specific apparent needs and not designed to encourage people to work”. They go on to

point out that “it will be argued that the Government has adequate funds at its disposal to provide

for increases in social welfare and other areas, cut taxes and still meet the “Maastricht criterion” ...

There is another Maastricht criterion that we do not fulfil: reducing overall public debt to 60pc of

GDP. We should be making this a priority” (11.12.1995). They also criticise Government

spending: “To be fair, it must be said that attempts have been made to cut down on Government

spending. The spirit is willing, but the pace is slow. Far too slow” (19.12.1995). This argument

was reinforced on 29th December 1995: “It is also incredible that, with such money flowing in, a

Government is once again heading for a budget deficit. It should be a surplus. Nor is the

Government apparently able to reduce its borrowings, which would mean a reduction in the annual

charges”. It seemed that the old policies of deficit spending that characterised Ireland in the 1970s

and to some extent in 1980s, were completely rejected by the Irish Independent.

The paper continued along similar lines in 1997, when they criticised France after

their election, as “he [Lionel Jospin] can hardly expect either his EU-partners or financial markets

to look with favour his plans to relax fiscal discipline” (20.6.1997). They go on to argue that

“Ireland has stayed the course [towards EMU] admirably, and has earned its place in the first line,

therefore reckless U-turns or swerves at this late stage in what has been at times a very difficult

journey could be disastrous. It is simply too late to allow the wheels to come off or to renegotiate

the rules of the road as the new Socialist French Prime Minister Lionel Jospin would appear to

demand” (7.6.1997). Thus, it seems that the Stability and Growth Pact and the policies it requires

were accepted, with limitations. This, indeed, is consistent with their earlier comments about too

high Government spending. They also criticised both France and Germany for jeopardising EMU

with their policy (31.5.1997).

The pro-EMU arguments continued in spring 1998: “The advantages of a single

currency are many with stability being perhaps the most important. The consumer can look forward

to more transparency seeing as everything will be bought and sold in euros it will be difficult for

traders to distort prices. Our Government will have to observe the strict limits on borrowing and

they will no longer have the luxury of of exchange rate controls to fall back on. In short, there is

no hiding place” (2.5.1997).

16

When Euro came into being in January 1999, the paper did not mention EMU

explicitly, but traced the history of European integration in Ireland, and concluded that “It is Europe

that has transformed us, opened our eyes, presented us with challenge and opportunity, liberated us

as a distinct and unique society, taught us to drop our old-fashioned pretentions and replace them

with a new-found realism” (2.1.1999). When the timing of the article is considered, it seems as if

EMU was a culmination of modernisation in the Irish society. They also argued that there are no

regrets about joining EMU because “our currency could never be truly independent. It had to be

tied to one of the giants. That meant sterling until we had the choice of the Euro-zone” (4.1.1999).

Again, the need to break free from the influence of Britain was brought up. However, in the same

editorial they mentioned the possible problems arising if Britain stayed outside EMU. They also

argue that pay settlements become more important in EMU (7.12.1998).

In February 2001 they criticise Charlie McCreevy for the European Commission

reprimand, stating that “McCreevy all but invited the reprimand ... he promised to control

[inflation]. Then he brought into an expansionary budget and planned for 13pc increase in public

spending ... from the European viewpoint, Irish fiscal policy is dangerously out of line” (25.1.01).

The Irish Times thus consistently continued with their support of policies stricly in line of the

Stability and Growth Pact. The criticism of Government spending continued in December 2001,

when they argued that “He [McCreevy] was right when he spoke of the sad legacy of unsound fiscal

policies in the past ... Less commendably still, he failed – in his fifth Budget , after well over four

years in office – to impose the fiscal discipline he once promised” (6.12.2001). In 2003, the Irish

Independent was no less critical of the Irish fiscal policies: “For there is no disguising the fact that it

was the Budget steered through by Minister for Finance Charlie McCreevy more than anything else

that has brought our inflation to a two-year high of almost 6pc, through a combination of higher

taxes and so-called stealth charges” (8.1.2003). They continue: “The biggest obstacle [to economic

recovery] to date has been the unsustainable rate of Government expenditure. This has been

addressed in the last couple of years, but there’s more to be done.” (14.11.03). Moreover, Germany

and France were criticised for their fiscal policies, and regeretted the fact that they escaped

punishment (26.11.03).

Conclusion

The aim of this paper was twofold. Firstly, the aim was to examine the similarities

and differences in the parliamentary and media debate what the (perceived) effects of EMU on the

welfare state were. Secondly, I wanted to examine what kind of strategies political elites used when

attempting to legitimate EMU in th eyes of the citizens. On the first issue it can be argued that the

17

welfare state issues were brought up more in Finland than in Ireland, and the politicians overall

were more critical of EMU’s effects on the welfare state and employment in Finland. Conversely,

the policies that are required by EMU-membership were more widely accepted in Ireland, which

indicated wide-spread acceptance of stability-oriented economic policy. In both countries, it was

the Conservative Parties and Social Democrats/Labour, who were most keen on EMU membership,

while the criticism came from smaller parties on the left of the political spectrum. One striking

feature of the parliamentary debate in both countries were attempts to de-politicise the EMU-issue,

which was used to legitimate the membership. Also, to certain extent leading politicians argued that

there is in fact no other sensible choice but to join EMU. This effectively marginalised critics of

EMU as “enemies of European integration.” When the editorials of major newspapers in each

country were examined, certain differences emerged. The only major national quality newspaper in

Finland, Helsingin Sanomat, clearly supported the Government’s policy of joining EMU among

first countries, and they had more pro-EMU editorials than anti-EMU ones. They were also critical

of the welfare state, and EMU was not seen as problem in that respect. When it comes to Ireland,

Irish Independent was clearly more positive of EMU-membership, while the Irish Times was more

critical. The political arguments about joining EMU were often cited in the guise of reducing

dependence from the United Kingdom (Ireland) and Westernisation (Finland) and “going to Europe

where decisions are made” in both cases, although they were not among the most dominant

discourses in either case. However, this nevertheless suggests that the elites in these peripheral

countries wanted to impose themselves on the European decision-making arena, and thus potential

economic problems related to EMU might have been sidelined in the process. One difference

between the countries was that in terms of numbers there were more criticism of EMU in Finland,

whereas in Ireland the majority of speeches were pro-EMU (figure 3, Appendix 1). This indeed

suggests that EMU was more controversial issue in Finland, and there were more concerns about its

effects on the welfare state, as indicated by the number of most common discourses in Finland

(Appendix 2).

When the parliamentary discourse and newspaper editorials are compared, it would

suggest that the view of Helsingin Sanomat relatively closely mirrored the arguments made by

dominant political elites: They used political arguments for EMU-membership (Finland cannot

afford to stay outside from the core of Europe in decision-making), but they also saw the cuts in

welfare spending as necessary. In Ireland the Irish Independent was very critical of Government’s

spending policies, but the political arguments about EMU resembled the views of dominant political

elites. The Irish Times, on the other hand, was overall slightly more critical of EMU, especially of

the economic arguments made for membership.

18

Bibliography: Esping-Andersen, Gosta (1990) ’The Three Worlds of Welfare Capitalism’, Cambridge: Polity Hay, Colin & Rosamond, Ben (2002) ’Globalization, European integration and the discursive construction of economic imperatives’, Journal of European Public Policy 9:2 April 2002: 147–167 Internet-pages of the Finnish Parliament, speech archive: http://www.eduskunta.fi/triphome/bin/akxhaku.sh?lyh=PTKSUP?lomake=akirjat/akx3100 Internet-pages of the Irish Parliament, speech archive: http://historical-debates.oireachtas.ie/en.toc.dail.html Jones, Erik (2002) ’The Politics of Economic and Monetary Union: Integration and Idiosyncracy’, Oxford: Rowman & Littlefield Klemola, Pertti (1982) “Helsingin Sanomat, sananvapauden monopoli”, Helsinki: Otava McNamara, Kathleen (1999) ‘Consensus and Contraint: Ideas and Capital Mobility in Monetary Integration’, Journal of Common Market Studies, Vol 37(3), pp.455-476 Ryner, Magnus (2002) ‘Disciplinary Neoliberalism, Regionalization, and the Social Market in German Restructuring’ in Ryner, Magnus & Cafruny, Alan ‘A Ruined Fortress: Neoliberal Hegemony and Transformation in Europe’, Oxford: Rowman & Littlefield Ryner, Magnus & Cafruny, Alan (2002) ‘A Ruined Fortress: Neoliberal Hegemony and Transformation in Europe’, Oxford: Rowman & Littlefield

19

Appendix 1: Figures Figure 1: Spread of parliamentary speeches over time:

N.o of speeches over time

0

50

100

150

200

250

300

350

year9

2

year9

3

year9

4

year9

5

year9

6

year1

997

year1

998

year1

999

years

00/01

years

02/03

FINIRE

Figure 2: Share of speeches between political parties

Breakdown of speeches by party in Finland (total 732)

Con14%

Christ.9%

Lib.0%

NuSu1%

Centre23%

Populis5%

Swedish4%

SocDem24%

Left14%

Greens5%

Others1%

20

Breakdown of speeches by party in Ireland (total 218)

Prog.Dem9%DemLeft

3%

Fianna Fail47%

Labour20%

Fine Gael17%

Others1%

Soc.1 %Greens

2 %

Figure 3: Pro-Anti EMU

0

100

200

300

400

Pro-Anti EMU, number of speeches

PRO 244 224

ANTI 305 59

FIN IRE

21

Appendix 2: Most common discourses in parliamentary debate, with number of occurrences and % of the total Finland: 1. “EMU has negative effects when attempting to improve the unemployment situation, and

therefore Finland should not join EMU” (74, 10.11%)

2. “EMU will force welfare cuts, EMU will result in more inequalities in society, and Nordic

model of welfare state is threatened”(71, 9.70%)

3. “EMU will bring stability, credibility, low interest rates and stable economic growth”(67,

9.15%)

4. “Policies required by the Stability and Growth Pact are good economic policy” (50, 6.83%)

5. “It would be at least as difficult to be outside EMU as it would be as a member” (29, 3.96%)

6. “It is bad to lose our monetary policy independence and economic policy instruments”(24,

3.28%)

7. “Finland will be in the political core of the EU decision-making through EMU-

membership”(21, 2.87%)

8. “EMU will not influence social policy, we decide it ourselves” (18, 2.46%)

9. “Welfare cuts (or budget consolidation) are necessary regardless of EMU” (15, 2.05%)

10. “There is accountability/legitimacy problem of the ECB, it needs more openness” (19,

2.60%)

Ireland:

1. Policies required by the Stability and Growth Pact are good economic policy (80, 36.70%)

2. Accepting Treaty of Maastricht (later EMU) will bring stability (low interest rates/strong

currency) and security for economy (30 13.76%)

3. Concern if the United Kingdom stays outside EMU (22 10.11%)

4. Accepting Treaty of Maastricht (EMU is good politically) (19 8.72%)

5. EMU will create jobs (19 8.72%)

22

6. EMU will bring economic growth (16 7.34%)

7. Criticism of lack of debate on EMU issue (14 6.42%)

8. Ireland should join EMU whether UK stays out or not (11 5.04%)

9. Treaty of Maastricht referendum was endoresement of EMU as well (9 4.13%)

10. Social Partnership is needed in the environment created by EMU (7 3.21%)

23