We need to postpone ratifying the ESM Treaty until After the the Fiscal Treaty referendum

The relation between two different treaties we are asked to ratify, which people Need to understand

The Government’s announcement of a referendum on the so-called “Fiscal Compact Treaty” (properly titled the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union/TSCG) calls in question its original intention to introduce the quite different European Stability Mechanism Treaty (ESM) to the Dáil for approval of its ratification on Tuesday or Wednesday next, or else sometime in the present pre-Easter Dáil term, as the Taoiseach recently announced.

The ESM Treaty would set up a permanent Eurozone bailout fund of at least €500 billion form this July – an economic firewall against sovereign debt “contagion” spreading to Spain and Italy. It has to be ratified by all 17 Eurozone States by their appropriate constitutional procedures. The ESM Treaty would commit Ireland to contributing €11 billion to the permanent Eurozone fund – so much money up front and so much in guarantees called “callable” capital later if required. There is already talk of boosting this fund by another few hundred billion once it is established, to which Ireland would naturally have to make a contribution also.

The Preamble to the ESM Treaty, which can be easily downloaded from the Internet, states (Recital 5): “It is acknowledged and agreed that the granting of fonancial assistance in the framework of the new programmes under the ESM will be conditional, as of March 2013, on the ratification of the TSCG [that is, the "Fiscal Treaty"] by the ESM Member concerned…”

This means that if the ESM Treaty, is ratified by Ireland sometime this month – we will be committing ourselves to contributing €11 billion to a fund from which we can receive no benefit or advantage whatever if voters should vote No to the Fiscal Treaty referendum that will presumably be held sometime in May or early June, although the Fiscal Treaty need not be ratified until the end of this year. The ESM Treaty was signed on2 February, the Fiscal Treaty/TSCG was signed on Friday last.

Would the Government not be acting in a very foolish fashion to lay the country open to such a possibility?

Would not the Irish State appear to be acting really bizarrely in the eyes of international public opinion if the ratification of these two quite different treaties was put the wrong way round in this way – very much against the Irish People’s interests?

Or has the Government in mind to introduce and ratify the ESM Treaty during March, as the Taoiseach said,

  • thereby binding the State to contribute €11 billion plus to this permanent Eurozone Fund,
  • and then use that as a moral bludgeon with which to browbeat a bamboozled electorate into voting Yes to the “Fiscal Treaty” – on the ground that if they should vote No to it, they will be depriving themselves of possible access to the permanent Eurozone fund at some time in the future?

Could our leaders really be so cynical?

Surely it becomes imperative in these circumstances that the Government should postpone ratification of the ESM Treaty until after the referendum on the Fiscal Treaty has been held?

The 17 Eurozone Prime Ministers and Presidents have agreed that they would try to bring the ESM Treaty into force by July. The original intention with this treaty’s predecessor, ESM Treaty No.1, which Michael Noonan and the other Eurozone Finance Ministers signed last year, in July 2011, had been to bring the permanent ESM fund into being in 2013, although ESM Treaty No.1 was never sent around for ratification. The date of next July would still give Ireland plenty of time in which to hold its “Fiscal Treaty” referendum in May or early June and thereafter ratify the ESM Treaty (No.2) to come into force by July if the people should vote for it.

Anthony Coughlan (Director)

There is still a little time left for Ireland to foil this power grab by the Eurozone elite

“Ireland entered the euro in 1999 and lost control of the two vital monetary instruments: setting interest rates and setting currency exchange rates. Had Ireland remained outside the euro, its bankers would not have gained access to the euro zone’s vast and low interest borrowing opportunities. Without the outlandish credit available within the euro zone, the building bubble, the resultant government tax windfalls and Ahern’s, McCreevy’s and Cowen’s spending splurge would have been impossible. The country would not now be in receivership . . . For Ireland there has not been a shared and equitable European solution. The banks, mainly German, which lent rashly, are receiving a 100 per cent bailout. Not from those who borrowed, but from the Irish tax payer. Apart altogether from the unfairness of the imposed solution, it will not work, because it cannot.”
- Professor Edward Walsh, founding President, University of Limerick, Beal na mBlath oration, Irish Times, 22-8-2011

We need a public enquiry into the sheer civic irresponsibility and governmental incompetence of the politicians and senior bureaucrats who pushed the Irish State into the Euro area in 1999:

  • an area whose one-size-fits-all interest rate policy was set to suit Germany and France and had the effect of turning the “Celtic Tiger” boom into a bubble;
  • an area with which we did little more than one-third of our foreign trade, so that the subsequent falls in the dollar and sterling exchange rates have greatly added to our economic uncompetitiveness;
  • an area whose banking policy is decided by the European Central Bank, which told Messrs Cowen and Lenihan at the time of the blanket bank guarantee in September 2008 that no Irish bank must be let fail, so that the €30 billion debts of insolvent Anglo-Irish would be imposed on Irish taxpayers and the German, British and French banks which had recklessly lent to Anglo and the other Irish banks to stoke our property bubble would get their money back.

British Chancellor George Osborne stated in early August that the Eurozone should move towards a fiscal union, with supranational control on budgets, taxes and public spending in order to shore up the euro-currency, but that the UK would not be joining that.

This marks an important change in UK Government policy, which has sought since 1961 to be at the heart of the EU, sharing basic EU policy-making with Germany and France.

If the Irish State goes along with moves towards a Eurozone fiscal union, while the North stays with sterling in the UK, it must profoundly deepen the political-economic gulf between North and South in Ireland.

The Coalition Government in Dublin is now preparing to ratify the European Stability Mechanism Treaty for the Eurozone which Finance Minister Michael Noonan signed on 11 July, as well as the Article 136 TFEU amendment to the EU Treaties which permits that, without a constitutional referendum.

The ESM Treaty commits Ireland “irreversibly and unconditionally” to contributing €11 billion in various forms of capital to the ESM Fund from 2013, with provision for regular capital increases thereafter.

This mechanism is seen by Germany and France as the way to establish a two-tier EU, with themselves effectively running an inner-core Eurozone, and the Irish State, if it remains with the Euro-currency, effectively reduced to being a permanent financial fiefdom of Germany and its allies.

This ESM Treaty is the first use of the “self-amending” Article 48.6 TEU of the EU Treaties which was inserted by the Treaty of Lisbon.

It is seen by the Fine Gael-Labour Government, as well as by its Fianna Fail predecessor, as a way round the restrictions on ratifying new EU Treaties without constitutional referendums here which were laid down by the Supreme Court in its 1987 Crotty judgement.

There is still a little time left for Ireland to foil this power grab by the Eurozone elite if our political leaders can summon the courage to serve the Irish people rather than themselves.

- Anthony Coughlan, Director, The National Platform for EU Research & Information. First published on Indymedia.ie

The Crisis of the Euro: “Apart from that, Mrs Lincoln, did you enjoy the play?”

“The member states whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality.”
– Amendment to Article 136 of the EU Treaties (TFEU) which was decided on by the 27 EU Member States at the March European Council summit and which licensed the 17 Eurozone States to sign the European Stability Mechanism Treaty on yesterday week, 11 July.
This ESM Treaty would establish a permanent EU bailout fund from 2013. The ESM Treaty and the Art.136 EU Treaty amendment which authorises it now go around for ratification by the Member States. The Government has decided not to put it to referendum here even though it means more power to the EU. The ESM Treaty can be downloaded from the internet.

The Irish Coalition Government, supported by Fianna Fail, intends in the autumn to get the Oireachtas to approve the decision to make the above amendment to the EU Treaties and then to ratify the consequential ESM Treaty for the 17 Eurozone countries.

They do not intend to hold a constitutional referendum, even though the wording of the Art.136 TFEU amendment and the ESM Treaty that derives from it would formally subordinate Ireland’s interests to those of “the stability of the euro area as a whole” … Even though there are no Treaty limits laid down as regards the “strict conditionality” which can be imposed on recipients of financial bailouts from the permanent ESM Fund envisaged … And even though Ireland will be required to contribute some €11 billion in paid-up and callable capital and guarantees once this Fund is set up in 2013.

The Irish Government thereby hopes to circumvent the 1987 Crotty judgement of the Supreme Court that new EU Treaties which extend the scope and powers of the EU and entail further surrenders of Irish sovereignty to Brussels/Frankfort, can only be made if the Irish people agree to them in a constitutional referendum. It is only the sovereign people themselves can decide on further significant surrenders of sovereignty to the EU – not our politicians or our TDs and Senators.

On 12 July Irish Finance Minister Michael Noonan said on RTE that were it not for Spain and Italy he would have been “euphoric” about what happened at the meeting of EU Finance Ministers the day before, when they spoke about the possibility of lowering the penal 6% interest rate being charged for the giant EU/IMF loan that was pushed on Dublin last November.

That was a bit like saying “Apart from that, Mrs Lincoln, did you enjoy the play?” The reason Minister Noonan was (almost) euphoric was because (as he said) the euro crisis is no longer about Ireland, Greece or Portugal but about core Europe.

The ultra-Europhiles in Ireland’s Establishment do not care what happens to Ireland, the euro or the EU, as long as they are not blamed.

The lack of self-confidence on the part of Ireland’s “Federalistas” is astonishing.

The powers-that-be bang on about the loss of Irish “economic sovereignty”, but they all want to have the euro debt federalized so that they can brandish an interest rate reduction on the current EU/IMF loan as a superlative political achievement.

Federalizing the debt means the end of the State’s 12.5% Corporation Profits Tax, which is crucial for attracting foreign investment in the Irish economy, and a lot more besides, as Berlin takes over permanently Ireland’s detailed budget decision-taking under the permanent EMS Treaty.

The Irish State is caught between a rock and a hard place, so far as Ireland’s “Federalistas” are concerned. It is bye-bye euro or bye-bye to what is left of Irish sovereignty.

On 16 July the Irish Times called for an EU fiscal and political union in its lead editorial. “This has always been the project’s ultimate end-point,” it stated.

But there was no mention of that being the “ultimate end-point” as Ireland’s paper of record championed passionately and uncritically every step of EU integration down the decades.

What a catastrophe the Eurofanaticism of Ireland’s “Federalistas” has brought down upon the Irish people:

* Pushing us in 1999 to join a monetary union with an area with which we did only one-third of our trade…

* Leading us to adopt totally unsuitable low interest rates in the early 2000s because these suited Germany at the time, so making our “Celtic Tiger” boom “boomier”, as Bertie Ahern put it, and inflating the property bubble…

* And since 2008 turning us into debt peons of the European Central Bank, whose Jean-Claude Trichet told Messrs Cowen and Lenihan at the time of the infamous blanket bank guarantee of 29 September 2008 that Anglo-Irish Bank must on no account be let go bust and that the foreign creditors/bondholders of the Irish banks must be paid every cent in full.

Which EU country had the highest economic growth rate last year? It was Sweden, at 5.5% . . . In the EU but happily outside the Eurozone. Its people sensibly rejected Eurozone membership in 2003 in a referendum vote of 56% to 44%, even though most of that country’s politicians supported abolishing the Swedish kroner at the time.

Angela Merkel now has to find a way of telling her own people that Germany is about to achieve the ambitions for which they fought and lost two World Wars, but that it will cost them money.

She also has to find a way of saying that without the rest of us noticing! And the other Heads of Government have to find a way of telling their electorates that the price of a continuing Eurozone of 17 is permanent German hegemony plus an austerity economic regime with all that that entails.

The only longterm solution of the current crisis is either federalizing the euro sovereign debt or the break-up of the Eurozone of 17. There are now likely to be moves to try to federalize some of the debts. There will be developments pointing to Trichet’s hoped-for EU Finance Ministry and much else besides, but one wishes that the proponents of the EU developing into a United States of Europe would ask themselves what happens after that. Such a logical end-point of the “great EU integration project” would not be the end of European history.

* Do the Euro-federalists really think that the many peoples of the EU would submit to effective German-French economic rule for the indefinite future?

* Do they really believe that they can institute a European democracy without a European “demos”? …

* Or that the latter can somehow be artificially created? …

* Or that people will submit indefinitely to administration by Brussels-Frankfurt technocrats, fronting for Berlin, no matter how benevolent these regard their own intentions?

These quite unrealistic assumptions have been subscribed to by the EU integrationists from the start. These people are now being exposed for the arrogant blunderers and fantasists they are, but millions are suffering terribly, and will suffer further, as they seek to impose ever more austerity on the PIIGS countries in the hope of saving their grand euro-currency “project”.

History has many examples of failed currency unions even though they were also fiscal and political unions.

The Irish State left the British monetary union after a century of membership. An independent Irish currency was seen by successive generations of Irish nationalists as an indispensable part of an independent Irish State.

Where now is the USSR rouble, the Yugoslav dinar, the Czechoslovak crown or the Austro-Hungarian thaler – all currencies of multinational federations that were monetary, fiscal and political unions for three-quarters of a century or longer, and all now vanished into history along with their creators?

Europe is a Europe of the Nations and the States or it is nothing, as Charles De Gaulle once said. That statement of democratic principle of course is internationalism, not nationalism. We need to adopt it as part of the ABC of political realism in face of the current crisis.

Democrats need to work towards a Europe of independent democratic cooperating Nation States, and abandon the fantasy of turning the EU into a world power under effective Franco-German hegemony, with the elites of small countries like Ireland serving as their well-paid local acolytes.

Anthony Coughlan Director The National Platform EU Research and Information Centre

What the Euro-Federalists want in the face of the debt crisis

“By the end of the summer Angela Merkel and I will be making joint proposals on economic government in the eurozone. We will give a clearer vision of the way we see the Eurozone evolving. Our ambition is to seize the Greek crisis to make a quantum leap in Eurozone government…The very words were once taboo.(Now) it has entered the European vocabulary. . . France has fought for a long time for an economic government of the euro zone. We can’t keep having a currency disconnected from economic policy. We have done something historic … There was no European Monetary Fund. We’re not there yet, but we’re progressing, and we have to continue towards that … To arrive at this economic integration we have to work on convergence. Naturally, France and Germany, being the two biggest countries of the Eurozone, have to lead by example.”

- French President Nicolas Sarkozy, Post-Summit Press conference, Irish Independent 22 July; Irish Times 23 July 2011

“With Italy and Spain infected by the contagion that Ireland, Greece and Portugal were unable to recover from, completing the euro project by creating a fiscal union appears to be the only real alternative to preventing it joining failed monetary unions in the dustbin of history. The issuing of eurobonds has consequences far beyond finance and economics. For euro zone states to fund themselves with euro bonds would be a step towards full political union. But this has always been the project’s ultimate end-point. And for good reason … As long as integration is Europe’s destiny, it is Ireland’s destiny too.”

- Irish Times editorial, Saturday 16 July 2011

“Europe will eventually have to operate more like the United States when it comes to raising funds on international markets, but nobody envisages getting to that point for several years at least. But by expanding the European Financial Stability Fund last night, the early outlines of such a system are clearly visible. Europe simply must act collectively when its individual members have critical debt problems and that will eventually mean some kind of Europe-wide debt agency.”

- Irish Independent editorial, Saturday 23 July 2011

“We have a shared currency but no real economic or political union. This must change. If we were to achieve this, therein lies the opportunity of the crisis… And beyond the economic, after the shared currency, we will perhaps dare to take further steps, for example for a European army”.

- German Chancellor Angela Merkel, Open Europe Press Digest, 13 May 2010

COMMENT ON THE ABOVE by Anthony Coughlan

In mid-July British Chancellor George Osborne said that he now favoured the 17 Eurozone States moving towards a fiscal/political union as the best way of saving the euro-currency, but that the UK had no intention of joining that.

This seemed to signal a major change in UK Government policy as it has been for the past half century. It implies that Britain now favours a two-tier or two-speed EU, whereas up to now successive British Governments have always wanted to be in the inner EU circle along with the French and Germans in deciding fundamental policy.

It means too that Britain is happy enough if the Republic moves with the other Eurozone States towards a fiscal/political union amongst the 17, while Northern Ireland stays with Britain in the wider EU of the 27.

This raises the question so far as Northern Nationalists, are concerned why should they support the concept of a United Ireland if in practice it means little more than exchanging a British-dominated monetary and fiscal union for a Franco-German dominated one? And why should Northern Unionists find the latter prospect more politically attractive than their present one?

The Irish Debacle: the Republic’s path to subordination to the ECB, EU Commission and IMF Troika

Future historians will surely see Ireland’s joining the Eurozone in 1999 and abolishing its national currency to adopt the euro as the worst policy mistake ever made by the Irish State. It was an act of gross irresponsibility on the part of a political class that had come to see themselves as “good Europeans” first and upholders of the national interests of its own people second. Explaining how this mindset came about will be a challenge to the country’s historians and social psychologists.

The Republic of Ireland joined the Eurozone on its establishment even though it did nearly two-thirds of its trade – exports and imports together – outside the area. It did some one-third of its trade with the Eurozone, one-third with the UK and one-third with America and the rest of the world. (The proportions for 2008 were : Total trade – Eurozone 34%, UK 24%, Rest of world 42%; Exports – Eurozone 39%, UK19%, Rest of world 42%; Imports – Eurozone 25%, UK 33%, Rest of world 42%, in the Statistical Yearbook of Ireland 2009). Its Europhile politicians assumed at the time that Britain would adopt the Euro before long, which would put the bulk of Irish trade inside rather than outside the Eurozone. But of course Britain did not and will not.

Moreover when Ireland joined the Eurozone it had been experiencing for over half a decade its “Celtic Tiger” economic boom. The period 1993 to 1999 was the only period in the history of the Irish State, which was established in 1921, that it followed an independent exchange rate policy and let the Irish pound float, thereby giving priority to its real economy of production and employment. This gave it a highly competitive exchange rate, which encouraged massive inward foreign investment, boosted exports and underpinned average annual growth rates in those years of 9% of GDP.

In the early 2000s, the first years of Eurozone membership, the euro itself fell against the dollar and pound sterling, which added to Ireland’s competitiveness in external trade. Unfortunately the growth rate then slowed, as output expansion shifted from exports to the domestic sector in response to the Eurozone’s unsuitably low interest regime and the housing and property boom of the early 2000s.

Eurozone interest rates were low in those years to suit Germany and France, whose economies were in recession. Ireland more than halved interest rates on joining EMU, even though it needed higher rates to cap its boom. This gave huge impetus to the borrowing binge that followed between 2001 and 2007. This was concentrated on the market and expanding domestic demand. It made the Republic of Ireland’s property bubble one of the biggest in the world.

Having surrendered control of monetary policy on joining EMU, the Irish Government let fiscal policy rip. It cut taxes and raised spending, buoyed by revenue from the booming property market. This began the process which landed the State with annual public sector deficits of over 10% of GDP and set the scene for the disastrous bank policy it adopted post-2008.

Ireland’s blank bank guarantee

When the property bubble burst some Irish banks were insolvent because of bad property loans and all had serious bad debts. In September 2008 Irish Taoiseach Brian Cowen and Finance Minister Brian Lenihan gave their infamous blanket guarantee to the Irish banks, from which the intolerable debt burden, the credit crunch, and the current crucifixion of the Irish economy all stem.

It would have been reasonable enough for the Irish Government to guarantee peoples’ deposits in the banks, the savings of citizens, and so head off a bankrun. Its folly was to give a simultaneous State guarantee to the creditors and bondholders of the Irish banks, and in particular the notorious Anglo-Irish Bank, a property developers’ bank which was in no way “systemic” to the country’s finances.

Unlike depositors, who can withdraw their money, creditors/bondholders cannot run anywhere. These were mostly foreign banks from which the Irish banks had borrowed vast sums over the years for on-lending to Ireland’s property market and which had made good profits on those loans.

At the time of the blanket bank guarantee Jean- Claude Trichet, Governor of the European Central Bank (ECB), phoned Finance Minister Lenihan from Frankfurt and told him that on no account should he let any Irish bank fail. If the insolvent Anglo-Irish Bank had been let go, the German, British and French banks which had lent that one bank alone some €30 billion for on-lending to the Irish property market, would have been badly hit. There could have been a chain reaction of bank failures across the Eurozone.

The European banks, and some American ones, had been happy to make money stoking the asset bubbles of the PIGS countries – Portugal, Ireland. Greece and Spain – under EMU and now feared these countries’ banks defaulting. Banks in Germany, France and Britain together had over €300 billion of exposure to the Irish banks and property market. In proportion to population size this was nearly ten times their exposure to Spain.

So with property prices plummeting and the investments of these foreign banks threatening to go belly-up, the Irish Government promised that the Irish State and Irish taxpayers would ensure that foreign creditors got their money back in full. There would be no default on senior bondholders of the country’s banks even if it meant years of pain for the Irish people, a credit crunch for local business, deflation, austerity, high unemployment and a return to mass emigration for the country’s youth.

The Irish Government gave this blanket bank guarantee on the assumption that its banks would have the backing henceforth of M.Trichet and the ECB. They got that for the next two years. During this time the ECB lent money at 1% interest to the Irish banks. Then in September 2010 the ECB grew alarmed at the size of the sums being demanded of it and the poor quality of the collateral the banks were offering against those loans.

Bailout/stitch-up by the EU

That month the two-year blanket bank guarantee was up, but the Irish Government, in line with ECB policy, renewed it. Although the Government had enough money to finance its own bills until mid-2011, it could not simultaneously guarantee the debts of Anglo-Irish and its other insolvent or near insolvent banks. With naïve trust in its Eurozone “partners”, the Government stood by its guarantee that no German, French or British bank would suffer. It would see to it that Ireland’s taxpayers would continue to pay off the debts of its insolvent local banks.

Two months later, in November, the EU pulled the ground from under the Irish Government. The European Central Bank told it that it would no longer lend Ireland money at 1% interest, but would organize a loan instead from its “shock-and-awe” fund which had been set up in May to lend to Greece, the European Financial Stabilisation Facility, at 5.8%. The Irish Government bowed to the harsh terms of the €67 billion loan being pushed on it by the ECB and the EU Commission, with the IMF in tow. US Treasury Secretary Geithner vetoed an IMF suggestion that senior bondholders in Ireland’s banks bear some of the costs. They would be paid in full. A troika of the ECB, the EU Commission and the IMF took over detailed management of Ireland’s finances and began supervising the release of the various tranches of the loan.

It was a humiliating culmination to the Irish political elite’s long love-affair with Brussels. As an editorial put it in the Irish Times, the paper which for decades had been the most uncritical advocate of each step of further EU integration by the Irish State: The EU/IMF loan and the conditions attached to it “represents nonetheless a defeat for this State which has turned us, in the blink of an eye, from European success story to a people at the mercy of the benevolence of others. It was notable that the announcement was made in Brussels and only after that was the Government able to hold its press conference in Dublin.” (29 Nov 2010)

In this way Ireland has been turned into a vast debt-service machine by the criminal incompetence of its own chief policy-makers and the demands of the European Central Bank. It has become a “bankocracy”, ruled by bankers. In December the Financial Times nominated Ireland’s Brian Lenihan, for the second year in succession, as the worst Finance Minister in Europe. In February this year the Fianna Fail Party, which had held office during the Republic’s boom and bust and which had dominated Irish politics since the 1930s, got its deserved come-uppance. It fell from 77 out of the 166 seats in the Irish Parliament to 20.

It was replaced by a Fine Gael-Labour coalition government, with 113 seats between them, which however has to date continued the same policy as its predecessor and is dutifully implementing the provisions of the Memorandum of Understanding with the ECB, the EU Commission and the IMF Troika.

This Irish debacle should make small countries that are outside the Eurozone thank heaven they are not in it.

Ireland after it’s 2011 General Election

Statement from the National Platform EU Research and Information Centre, March 2011

1. FIANNA FÁIL DOWN, FINE GAEL AND LABOUR STILL TO GO

One big party – Fianna Fáil –  that supported Ireland’s blanket Bank bailout, the EU/IMF stitch-up last December,  the 2009 Lisbon Treaty, the 1992 Maastricht Treaty which abolished the Irish púnt,  and every other step towards EU-integration over decades, bit  the dust in the February General Election. We must now wait some time to see the two other big parties that did exactly the same thing, namely Fine Gael and Labour, bite the dust also as they impose on us the savage rigours of the EU-IMF deal over the next few years.  This should open the way for the new political forces that were reflected in the success of the Independent TDs, the trebling  of Sinn Féin’s Dáil representation and the advent of the United Left Alliance, to become the genuine opposition force in Irish politics that is so obviously needed

2. IRISH LABOUR AS THE MUDGUARD OF FINE GAEL

If the Labour Party were really to act in the “national interest” which it prates so much about and in accordance with the programme it sought the votes of the people on, its leaders would let Fine Gael form a government on its own, with Fianna Fail and other support from outside.  Fianna Fail would not dare to vote against a Fine Gael minority government for several years, so that such a government would be quite stable.   Instead, as Sean O’Casey said of Labour at the time of the first Fine Gael-Labour Coalition of 1948-51: “Their posteriors are aching for the velvet seats of office.” Instead of Labour being the largest element in opposing the Fine Gael/Fianna Fail implementation of the EU/IMF stitch-up, Messrs Gilmore, Rabbitte, Quin and Howlin and Joan Burton have assumed Irish Labour’s traditional role of “mudguard of Fine Gael rather than advance-guard of the workingclass”!  It used be said that Labour struggles with its conscience, and Labour always wins. . . Except that on this occasion a handful of ageing Labour leaders were so desperate to get into office for their own benefit that there was not even the pretence of such a struggle.

Since 1948 Labour’s role in Irish politics has been periodically to revive Fine Gael from near terminal decline by putting it into office, simultaneously enabling Fianna Fail with virtually identical policies to revive itself in opposition. Thus the Irish Establishment could afford the luxury of having two big parties to champion its interests rather than one. Labour Ministers got big jobs, good salaries and pensions for their services, while the Labour Party was decimated in the subsequent election. This has happened on four occasions since 1951. The difference on this occasion is that Fianna Fail’s electoral defeat has been so great that it may not be able to recover in opposition. There is no real objective social basis for its continuance as a political party, now that the impact of the financial crisis and the huge increase in its vote has enabled Fine Gael to morph into becoming Ireland’s “natural” conservative party.

Whether this will actually happen depends on the non-Fianna Fail forces on the Opposition benches working together in the period ahead to make themselves into a cohesive, credible and radical opposition, cooperating  with one another at least on fundamentals.  It is inevitable that there will be a major reaction against Fine Gael and its Labour junior partner in the next general election, as they spend years as the local administrators of German-sponsored EU-IMF austerity.  The next election may also come about much sooner than five years because of the continuing national and international financial crisis.

3. THE EUROZONE FRAMEWORK OF IRELAND’S ECONOMIC CRISIS

The Irish State’s economic crisis stems fundamentally from its folly in joining the Eurozone in the first place in 1999, impelled by the longstanding uncritical Europhilia of the Fianna Fail, Fine Gael and Labour parties and others. By abolishing the national currency at that time, Ireland adopted the currency of an area with which it did only one-third of its trade (i.e. exports and imports combined).  Another third of its trade was with the UK and the other third with the USA and the rest of the world.  Last year two-thirds of the Irish State’s foreign trade was still outside the Eurozone!  Moreover, joining the Eurozone led Ireland to adopt negative real interest rates at the height of the “Celtic Tiger” boom and thereby inflated the property bubble which has now burst, leaving both  the State and its State-guaranteed banks objectively insolvent.

The 10 EU Member States outside the Eurozone  – Denmark, Sweden, Britain, Poland, the Czech Republic etc.- have nothing like the Irish State’s problems. These EU Member States are thanking their stars these days that they avoided the course of folly that Ireland’s political elite pushed its people on to. A little thought will show one that abolishing the púnt was by far the worst decision ever taken by an Irish Government. It was far worse than the 2008 blanket Bank guarantee by Taoiseach Cowen and Finance Minister Lenihan, for if the Republic had not joined the Eurozone in the first place, there would have been no need for that guarantee.  It was the European Central Bank which insisted that it be given:  namely, that no Irish bank must be allowed to fail in case the German-French banks from which the Irish banks had borrowed, would not be paid back.

If we had stayed outside the Eurozone there would have been no ECB to bother us.  The Eurofanaticism which led Fianna Fáil, Fine Gael and Labour to push through the Maastricht Treaty and push us into the Eurozone initially has been the most outstanding historical delinquency of Ireland’s political Establishment. Yet deference to the EU is so ingrained in 26-County official and media opinion that many who should know better are too timid even today to recognize and draw attention to these obvious points.

There are calls for a public enquiry into the infamous blanket bank guarantee of September 2008 and why it was continued last September. More relevant and useful would be an enquiry into the folly that led the Irish State to join the Eurozone in the first place, from which the financial collapse and the bank guarantee have both stemmed.

4. SACRIFICING IRELAND’S CHILDREN TO HOLD THE EUROZONE TOGETHER : THE 24 MARCH EUROPEAN COUNCIL MEETING

We are now trapped like rats inside the Eurozone, although it is only a matter of time before the Eurozone breaks up and some or all of its Member States leave it and reestablish their national currencies, for its structural faults are irremediable.  The only question is how soon will this occur and in what circumstances – whether it will be done in an organised or disorganized fashion.  In the meantime Germany, with France holding on to its coat-tails, plans for Ireland and the other peripheral Eurozone countries a punishing regime of austerity and national asset sales that could go on for years.

On 24 March the European Council meeting of EU Prime Ministers and Presidents is expected to agree an amendment to the Lisbon Treaty to set up a permanent EU bailout fund from 2013 – the European Financial Stability Mechanism. Ireland will be expected to contribute to this, but it will not have retrospective effect or alleviate the pain for the Irish people of last December’s EU-IMF stitch-up.  The EU authorities are very anxious to avoid a referendum in any EU State on the establishment of this Fund even though it will entail an amendment to the EU Treaties. The EU Summit meeting will seek to push through this amendment by using the “self-amending provision” of the Lisbon Treaty (Article 48 TEU). Messrs Kenny and Gilmore will be under pressure to push it through in Ireland without a constitutional referendum on the grounds that it is only a minor technical change and does not increase the powers of the EU.
The Opposition TDs in Leinster House will need to consider a Court challenge to this likely course, if the incoming Government seeks to follow Fianna Fail’s policy of denying the Irish people a referendum on this EU Treaty change.  At the same time there is likely to be an attack on Ireland’s 12.5% Corporation Profits Tax rate and a scheme for a common cross-EU Tax Base which would fundamentally subvert Ireland’s attractiveness for foreign investors. The Common Tax Base idea, which the Brussels Commission is proposing, is a scheme for so-called “destination taxes”.  It envisages Corporation Tax being calculated centrally at EU level so that firms pay profits tax to the governments of the different countries in which they sell their goods, and not to the Government of the country where those goods are originally made.

The new Irish Government needs to coordinate its responses to the crisis with the governments of the other so-called PIIGS countries in the Eurozone – Portugal, Italy, Greece and Spain – and resist the Franco-German dictation now taking place. This depends on Messrs Kenny and Gilmore overcoming the  decades-old habits of Irish deference and political kow-towing to the EU and our EU “partners”. It needs them to  show some political backbone and willingness to stand up for Irish interests.  Up to now Irish policy is to keep as far apart from the other PIIGS countries as possible. This is in line with the Iveagh House people’s policy of always seeing Ireland as being the “good boy” in the EU class, happy as long as it receives pats on the head for good behaviour from Franco-Germany!

5. HOLDING THE ECB TO RANSOM

The ECB has lent the Irish Banks some €150 billion. If the Irish banks all closed tomorrow morning, the ECB would not get its €150 billion back because that money is now in the system in Ireland. The ECB knows that Ireland’s banks have not got the money to pay it this vast sum. From the ECB’s point of view its best plan to recover the money it advanced to cover the reckless lending of the banks is to shift the burden of repayment on to the Irish taxpayers. Therefore the political and media suggestion that the ECB will close down the ATM machines so there will be no money in the system, is so much scaremongering to intimidate the public into agreeing to take on these debts it is not responsible for. The central issue at present is that the ECB wants the Irish State and taxpayers to take on the burden of paying this €150 billion back to the ECB as rapidly as possible, so that instead of the Irish Banks owing the ECB this vast sum of money, the Irish State/taxpayers will do so and will pay it back over years by flogging off the Banks themselves to foreign owners, selling off the NAMA loans at knockdown prices, privatizing State assets systematically and screwing Irish taxpayers for this purpose.

This is essentially what the EU/IMF Memorandum of Understanding commits the Irish Government to doing.  The Irish public needs to be warned that what its political leaders are planning is a massive fire-sale to foreigners of the recapitalized Irish Banks and State assets generally – the NAMA loans, Coillte, An Post, the ESB, Bord Gais etc. and Ireland’s natural resources, so that we can pay back the money the ECB is putting in  the Irish Banks, essentially in order to ensure that private banks in Germany, France and Britain do not suffer losses on their Irish operations. Until this fire-sale is completed, the ECB depends on us and we can in effect hold it to ransom.  Hence the new Irish Government should be in no hurry to comply with the ECB’s wishes.  It should act in accordance with the old truism: If you owe the Bank a million you are in trouble, but if you owe it a hundred million it is the Bank that is in trouble!  The ECB stood irresponsibly by while the German, French and British banks punted huge sums on the Irish property market for years and made big profits thereby.  As the Eurozone’s lender of last resort the ECB should now pick up the tab.  The Irish State needs to repudiate the horrendous private Bank debts that it has so foolishly guaranteed, if it is to be able to repay its legitimate sovereign debts and return to the international bond markets at an early date in order to borrow at reasonable interest rates.

6.  MONETARY UNIONS, FISCAL UNIONS, POLITICAL UNIONS

One cannot have an independent State unless it has its own currency, and with that control of either its interest rate or exchange rate policy, for these are fundamental  economic instruments for advancing a people’s welfare.  Those who fought for an Irish Republic historically took for granted that national independence meant that an Irish State would have its own currency and the related economic instruments.  The rate of interest is the internal  “price” of money, so to speak, and the currency exchange rate is its external “price”. A Government cannot control either unless it has a currency of its own in the first place.  That is why former EU Commission President Romano Prodi exulted when the Monetary Union was set up for a minority of EU States in 1999: “The two pillars of the Nation State are the sword and the currency and we have changed that.”

The fundamental problem for the Eurozone and its 17 Governments is that there cannot be a stable, lasting monetary union that is not also a tax and public spending union, and hence a Political Union, so that its component Member States are compensated for loss of their  ability to influence their competitiveness by varying their exchange rate – for they have no independent currencies any longer – by automatic  transfers from richer to poorer States through a common federal-style Eurozone tax and public service system. The latter means a Political Union like the USA, and the dream of building a United States of Europe on similar lines to the US has for decades been a dream/fantasy of the Euro-federalists, of whom there are many in the leadership of the Fine Gael and Labour parties.

A system of common taxes and public services exists within national States, but it does not exist cross-nationally.  It cannot exist cross-nationally because the social solidarity, the sense of community and mutual identification, the sense of being a common political “We”, which is what makes people pay taxes freely and willingly to a common Government because it is “their” Government, does not exist at EU level.  A democracy or democratic State is impossible without a “demos”, a people; and there is no EU or Eurozone “demos”, in contrast to its component Nation States.

This is the fundamental fallacy of the EU integration project, the attempt to turn the EU into a quasi-State, even though already half or more of the legal acts made in each of the 27 EU Member States each year are on average of EU origin. Free trade is one thing, and is normally a good thing.  A common currency, credit and exchange rate policy for very different economies is something totally different. The resistance of German public opinion to financing Greece, Ireland, Portugal etc. in the current  Eurozone crisis is but one small example of this. The solidarity needed for such continual resource transfers between the Member States of the Eurozone to enable it hold together does not and cannot exist. Nor can it be artificially created.

7. REESTABLISHING IRELAND’S NATIONAL CURRENCY

The advantage of a country having its own currency is that it enables its Government either to control credit and issue money for purposes of job-stimulus and the like through varying the rate of interest, or to influence its competitiveness with other economies by varying its exchange rate. Governments can set a target for either the interest rate or the exchange rate, but they cannot achieve both targets simultaneously, for each rate affects the other.

In the Eurozone interest rate and exchange rate policy are quite properly decided in the interests of the Big States, for they contain most of the population of the Eurozone. The one-size-fits-all interest rate regime of the European Central Bank (ECB) must always be unsuitable for some Eurozone countries therefore, for the 17 economies concerned differ widely.  Moreover, as the Irish State does nearly two-thirds of its trade outside the Eurozone, whereas all of the 16 other Eurozone members do half or more of their trade with one another, the exchange rate for the euro must normally be unsuitable for Ireland also. This is vividly shown these days as the euro rises vis-a-vis the dollar and pound sterling. This hits Irish exports to the dollar/sterling areas where we do most of our trade and encourages competing imports from those areas.
Having taken the disastrous step of joining the Eurozone in the first place, it would be foolish to pretend that one can get out of it without pain, especially when Irish Governments have agreed to stand over the mess in the State’s private banks and have built up such a deficit in the State’s public finances. However, re-establishing an independent Irish currency and with that its own credit and exchange rate policy has to be a central objective of all genuine Irish democrats, for without that there can be no truly independent Irish State. People should not be afraid to state this, especially as the pain of remaining in the Eurozone is mounting all the time and the historical trends point to continual strains within it and continual crisis as long as it lasts, and its eventual partial or total dissolution is inevitable.

The threat of repudiating the private bank debt now moved to the ECB  and of reestablishing the Irish pound is the principal lever/weapon the Irish State has vis-à-vis the Eurozone. At present Ireland cannot restore its economic competitiveness by devaluing its currency. It can only become more competitive by “devaluing” – that is, by  cutting –  peoples’ pay, profits and pensions instead for years to come.  The main advantage of leaving the Eurozone and rejoining the 10 EU Member States outside it is that it would enable the Ireland to resume control of its money supply and credit and thereby stimulate domestic demand and employment, while simultaneously it could boost the State’s economic competitiveness by devaluing the exchange rate. The main drawback of this step is that much of the State’s foreign debts would be in euros, if the Eurozone still existed, and would be expensive to pay off in a depreciating currency. On the other hand, the boost to competitiveness and exports arising from having a more suitable exchange rate than the Eurozone one, should enable Ireland earn more foreign currency with which to pay those debts. Temporary exchange controls would also be needed for a transitional period. It is in any case likely that some countries will leave the Eurozone in the next few years, if the Eurozone as a whole succeeds in holding together at all.

If the Eurozone breaks up, a planned dissolution and a related reapportionment of debts would clearly be better than a disorganized one.  There are many examples of monetary unions that have dissolved and been replaced by national currencies. The Irish State itself left the UK monetary union in 1921, although it maintained an overvalued púnt at par with sterling until 1979.  The USSR rouble was replaced in short order by 15 successor currencies in its 15 successor States in 1991. The Czechoslovak crown and Yugoslav dinar were replaced by successor currencies in the 1990s.  In 1919 the Austro-Hungarian thaler was replaced by the different currencies of its several successor States.

What is happening now is that Ireland, Greece, Portugal etc. and the interests of their peoples are being sacrificed in order to save the Eurozone, whose dissolution would be a blow to the entire integration project of building a European quasi-superstate under Franco-German hegemony to become a big power in the world.  The acolytes of that project in Ireland  – in the leadership of the Fianna Fail, Fine Gael and Labour parties, in Foreign Affairs at Iveagh House, the Dept.of Finance and the Taoiseach’s Department, in the Central Bank, the Irish Times, RTE and the senior echelons of the Irish Congress of Trade Unions  – are desperately afraid that their political life’s work may have been in vain, so  they are quite willing that the welfare of the Irish people be sacrificed to save it. These are perhaps the most fundamental issues that are at stake in the current crisis.

People should remember also that the only period in the 90-years’ history of the Irish State when it used its monetary independence, followed an independent exchange rate policy and effectively floated the currency, from 1993 to 1999, gave us the “Celtic Tiger” rates of economic growth of 8% a year – until that was destroyed by the low-interest-rate-induced bubble of the Eurozone from 2000 onward.

The Power-Hungry EU

“We have got a monetary federation. We need quasi-budget federation as well …

We need quasi-federation of the budget.”

- European Central Bank President Jean-Claude Trichet, The Guardian, 1-12-2010

“I deeply respect our Irish friends’ independence … but they cannot continue to say ‘come and help us’ while keeping a tax on company profits that is half [that of other countries]. We cannot speak about economic integration without the convergence of fiscal systems.”

- French President Nicolas Sarkozy, The Irish Times, 14-1-2011

“We have a shared currency but no real economic or political union. This must change. If we were to achieve this, therein lies the opportunity of the crisis …

And beyond the economic, after the shared currency, we will perhaps dare to take further steps, for example for a European army.”

German Chancellor Angela Merkel, Open Europe international press survey, 13 May 2010

“The two pillars of the Nation State are the sword and the currency, and we have changed that.”

- EU Commission President Romano Prodi, The Guardian, 1999

Next month, March 2011,  the EU Commission will propose supranational legislation for a uniform system of assessing business taxes in the EU – a Common Consolidated Tax Base.

This proposal for  what are called “destination taxes”  will undermine Ireland’s 12.5% company tax rate. It put on hold in 2008 and 2009 to help get the Lisbon Treaty referendums through in Ireland.

The idea is that firms selling goods in different EU countries would pay corporation tax to those countries’ governments based on the profits on their sales in those countries, and not to the government of the country where the goods were originally made, as happens now.

Countries would continue to decide their own tax rates as at present. This means Ireland could keep its 12.5% Corporation Profits Tax for profits made on sales in Ireland, but not on profits made on sales abroad.  The attraction to foreign investors of Ireland’s low corporation tax regime would be fundamentally subverted by this step, for most of their profits would be taxed in the countries where their goods or services were sold and not in Ireland where they are produced.

This step does not require unanimity amongst all 27 EU States. It can be done  by a sub-group of nine or more Eurozone States under the “enhanced cooperation” provisions of the Treaty of Nice, even though many or most of the other EU Members are against it.  The EU institutions can then be used to  advance further integration by this sub-group. This provision drove the proverbial coach and horses through the notion which some people believed in: namely, that the EU is some kind of “partnership of equals” in which no fundamental change can be made without all 27 Member States agreeing.

In March too the European Council will finalise arrangements for an amendment to the Lisbon/EU Treaties to set up a permanent “Financial Stabilisation Fund” from 2013, to which Ireland would be expected to contribute, without allowing the Irish people to vote on it in a referendum.

The German paper Handeslblatt reports that a “historic” change of EU policy is now under way in Berlin, with Germany no longer opposing Eurozone economic government. The new plan envisages the 17 Eurozone countries being pushed towards “harmonization” of their State Budget policies.  On taxation levels, wages of public officials and retirement ages, Eurozone countries would have to commit to binding common “bandwidths”, with penalties such as fines for any breaches.

The EU/IMF loan – better called a “stitch-up” rather than a “bail-out”! –  that was pushed on the Irish Government by the European Central Bank last November puts Ireland in a weak position to resist these further transfers of power to Brussels and Frankfurt. They underline once more the folly of our joining the Eurozone in 1999, when we could have stayed outside it like 11 of the 27 EU Member States.

It is now clear to all thinking people that joining the Eurozone  was the worst and most irresponsible decision of any Irish Government – ever.

The politicians of the three main parties who pushed that ruinous course upon us are the real perpetrators of “economic treason” in Ireland, of which our emigrating young people, our 400,000 unemployed and our debt-ridden households are the manifest current victims.

N.B. Note that from 2014, just three years time, the Lisbon Treaty/EU Constitution which was also pushed on us by Fianna Fail, Fine Gael and Labour will put EU-law making on a straight population basis, with Germany’s vote on the Council of Ministers doubling from its present 8% to 17%, France’s, Britain’s and Italy’s vote going from their present 8% each to 12% each, and Ireland’s falling from its present 2% to 0.8%.

The proposals mentioned above are but a foretaste of many more EU diktats to come, once Germany, France and the other big EU States obtain this big increase in their EU law-making power.

(11 February 2011)

Wake Up Time for Ireland! Public Enquiry Needed

A public enquiry is needed into how the Irish people have been turned into indentured debtors of the EU, the European Central Bank and the IMF.

We need to know this if we are ever to recover.  We need to know who was ultimately responsible for the situation we now find ourselves in, trapped inside the Eurozone when we did not need to join it.

EU Member States outside the Eurozone like Britain, Denmark, Sweden, Poland and the Czech Republic are not caught up in the current torments of the Euro. They can weather the economic recession better because they have kept their national currencies and with it control of their rate of interest or exchange rate.

Most Irish economists, the National Platform and several non-governmental groups warned at the time of our 1992 Maastrict Treaty referendum that abolishing the Irish pound would be the biggest mistake the Irish State ever made (John FitzGerald’s ESRI was an influential exception). The second biggest mistake – largely a consequence of the first –  was the 2008 blanket guarantee of all the debts of our private banks

The period 1993 to 2000 was the only period in the history of the Irish State when it followed an independent exchange rate policy and effectively floated the Irish currency. That gave us a highly competitive exchange rate and with it  the “Celtic Tiger” growth rates of over 7% a year.

It is impossible to have a lasting monetary union that is not also a fiscal union, part of one State, with common taxes and a common budget.  However Ireland’s Euro-fanatics pushed us into the Eurozone against all the economic arguments.  They were impelled by their zeal to help build an EU superstate led by Germany and France, without any national democratic control.

Such a construct would inevitably lack the mutual identification and solidarity between its members which would sustain transfers from the rich countries to the poorer ones sufficient to compensate the latter for loss of their capacity to run independent budgetary policies or restore their economic competitiveness through currency devaluation.

It was profoundly irresponsible to abolish the Irish pound in order to join a monetary union with States with which we did only one-third of our foreign trade, while simultaneously halving interest rates at the height of an economic boom.

That made things “boomier”, as Taoiseach Bertie Ahern put it. It set us on the borrowing binge that followed, and the catastrophic course Ireland’s Government has since taken with its Banks.

It is the grand panjandrums of Irish Euro-fanaticism: Peter Sutherland of Goldman Sachs, Garret FitzGerald, Alan Dukes, Pat Cox, Brigid Laffan, Brendan Halligan, Ruairi Quinn and David Begg, who ultimately impelled us to surrender our political independence and democracy in the Eurozone.

As influential, although their names are unknown to the public, are the “career federalists” of Ireland’s Foreign Affairs Department in Iveagh House, who form the policy and write the speeches of successive Foreign Ministers. They are keeping their heads down these days and are happy to let the Department of Finance take the rap for our current economic debacle.

However it is they more than any other element in Ireland’s civil service who have steered our ship of state on to the rocks.  Cheering them on throughout have been uncritical elements in our media, above all in the editorial office of the Irish Times.

There is deep irony in the fact that their zeal for ever more EU integration has turned Ireland into a bomb inside the “infernal machine” of the Euro-currency, hastening its inevitable demise, and in the process possibly plunging much of the world into the second phase of a W-shaped recession.

Henceforth we should be more critical of what these people say when they enthuse for ever “more Europe”.

Anthony Coughlan – (01) 830 5792

Emmett O’Connell – (051) 565 844


(First published on Indymedia.ie)

News Updates: Irish Parliament Abdicates Legislation, Who are the Bond-Holders? EU Propaganda Junkets

Open Europe
Press Summary Archive
11 October 2010
http://www.openeurope.org.uk/media-centre/summary.aspx?id=1204

The Irish edition of the Sunday Times reported that Edmund Honohan, Master of the Irish High Court, has accused the Irish Parliament of failing to assert Irish legislation over new laws from Brussels and delegating much of the workload involved in scrutinising EU law to civil servants.


http://www.swp.ie/editorial/who-are-bond-holders/3669
Who are the Bond-holders?
SWP / Kieran Allen, 08/10/2010

‘We must re-assure the bondholders about the economy’. This line is trotted out daily in the Irish media. But who are these bondholders? The strange feature of current debates is that the Irish people never get told to whom we are supposed to pay all these debts [...]

Last Saturday the Financial Times published data on bondholders for Irish government debt. The figures relate to July 2010 when European banks were asked to provide information to the Committee of European Banking Supervisors as part of a stress test. Although the data is a few months old, we may reasonably assume that the pattern has not changed when interest rates shot up to 6.5%. It should be noted that the figures below pertain only to Irish state debt. We still do not know who the bondholders of Anglo-Irish or the wider banking system because this is supposed to be ‘commercially secret’ information. Read it carefully and you will get an insight into the shocking skulduggery that is going on here.

TOP 10 BANKS WHO HOLD IRISH GOVERNMENT BONDS

    1. Royal bank of Scotland £4.3 billion
    2. Allied Irish banks €4.1 billion
    3. Bank of Ireland €1.2 billion
    4. Credit Agricole €929 million
    5. HSBC $816 million
    6. Danske Bank €655 million
    7. BNP Paribas €571 million
    8. Groupe BPCE €491 million
    9. Societe Generale €453 million
    10. Banco BP1 €408 million

The Royal Bank of Scotland is owned by the British government and Peter Sutherland was one of its directors until 2009. Sutherland often lectures the Irish population on the need for cutbacks – but he never reveals this link. The big surprise, however, is that the two biggest bondholders are Irish Banks. The people of Ireland have already put €7 billion in these two banks – but they then screw us twice by lending back our own money at higher interest rates. Imagine working class taxpayers delivering billions at the front door of the bank and then the directors scurrying around the back door to lend us back our own money and to call for more sacrifices. It is time to end this madness now.


http://synonblog.dailymail.co.uk/2010/10/is-this-how-the-eu-got-a-yes-to-lisbon-from-the-irish.html
Is this how the EU got a Yes to Lisbon from the Irish?
Daily Mail Ireland Online / Mary Ellen Synon, 7 October 2010

The European Commission has just flown 15 Irish journalists to Brussels for a two-day ‘information visit’. Or as those of us who know Brussels and talk straight would put it, for a two-day, two-night taxpayer-funded propaganda junket at a four-star hotel.

Ireland and the other eurozone countries might be suffering savage spending cuts, but the EU self-publicity budget thrives: in 2008 the Open Europe think-tank calculated that the EU was spending at least €2 billion a year on ‘information’.

Much of it bent, which is to say, propaganda. The commission actually admits that its information is bent. One of its publications declares: ‘Genuine communication by the European Union cannot be reduced to the mere provision of information.’

The EU propaganda machine pumps money into lobby groups that support ‘ever closer union’. They push propaganda into schools. And almost more than anything else, they target the Press. Journalists are offered ‘free’ trips and training (yes, just like Scientology offers training). The EU gives out cash prizes to on-message journalists.

A parliamentary Press official told me this week that a large number of Irish news organisations are given free flights to Strasbourg to cover the parliament, plus €360 in cash for expenses. (The Irish Daily Mail takes none of these taxpayer-funded handouts.)

 

[...]I got myself into the middle of it to hear what it was the commission and parliament propaganda machine would say to these 15 EU-innocents coming from Dublin. I cut the hotel and the other freebies – I live in Brussels – and stuck to the meetings. Meanwhile the journalists piled off their EU taxpayer-funded €377-a-head flight and into their EU taxpayer-funded rooms at the Hotel Manos Stephanie (’the Louis XV furniture, marble lobby and plentiful antiques set a standard of elegance rarely encountered,’ the hotel brags, and so it should since the rate is listed at €295 a night for a single room).

I said ‘No, thanks’ to the swish free lunch (well, not free to the taxpayers: it cost taxpayers €30 for each journo) in the private dining room at the European Parliament on Tuesday. It wasn’t hard to say No. The truth is I get gag-reflex when someone offers me taxpayer-funded food. I can never get that line from Abraham Lincoln out of my head, about the lure of ‘the same old serpent that says you work and I eat’.

I only wanted to be there to see how the propaganda machine would seek to mislead. For example: one theme that turned up in briefings on the economy was that the euro had nothing to do with Ireland’s economic disaster, nor indeed with any economic disaster anywhere in Europe.

Yet it was the low interest rates of the early years of the euro that set fire to our property bubble. It was the illusion of eurozone convergence that allowed our banks to suck in billions from saver-countries such as Germany.

The propaganda orthodoxy in the EU will admit no such damage. What the Irish journalists were given this week was the Bart Simpson excuse for the damage done by the euro: ‘I didn’t do it. Nobody saw me.’ This wasn’t information, it was a propaganda pitch.

[...] One of the meetings the Press officers had arranged was a session with five Irish members of the European Parliament.
[...] I thought I’d try to put the concerns of these politicians about the economy into Brussels-perspective. Remember, we were talking to politicians who will bank a half-million euros just from their salaries over the course of this parliament. Last year I added up some of the perks they get on top, everything from daily allowances to business-class air travel to medical allowances to free disposable contact lenses to reimbursement for 60 sessions a year of mud baths. Being an MEP is a lotto win. How do you stay in sympathy with the unemployed in West Dublin with a life like that?

So I asked the five MEPs to justify the decision last week by the parliament’s budget committee to increase the MEPs’ entertainment budget for 2011 by 85 per cent. How could they justify that, given the suffering of people across Europe?

The five said they’d heard about no such thing. Mr de Rossa even denied there was an entertainment budget for MEPs. He suggested that newspapers had made up the story.

Since I was one of the journalists who had reported the story, I knew it had not been made up. I’d had my information from Marta Andreasen, an MEP who is a professional accountant. More to the point, she is a member of the parliament’s Budget Committee.

Here are the figures, as from this professional accountant: the MEPs’ entertainment budget for next year has jumped from €1,105,200 to €

2,047,450. Yet the five Irish MEPs at this propaganda-fest denied it in front of 15 Dublin journalists plus me. Unless I could identify the exact budget line for them right then, the MEPs said they wouldn’t admit such a thing could have happened.

The other journalists, unused to the ways of the parliament, couldn’t make anything of it. But I will give credit to Mairéad McGuinness, who, despite being indignant about my suggestion, had her staff check it. She came back to me a couple of hours later with a piece of paper showing the figures for a budget line labelled ‘Entertainment and representation expenses’. There it was: the huge jump in the entertainment budget that the Irish MEPs had all earlier denied could exist.

Half the eurozone is bleeding to death, but the MEPs will take a jump next year of 85 per cent for their ‘entertainment’.

[...]When Miss Day brought her comments around to the new so-called European External Action Service (the euphemism for the new EU diplomatic corps which is going to lead to the closing of many Irish embassies around the world), she assured the Dublin journalists that this vast army of diplomats and embassies would in fact be ‘revenue neutral, except for the first year.’

I waited for someone to ask, ‘But what about the first year, then?’ None of them did. I realised that even the sharp ones weren’t used to listening to eurocrats’ slimy-speak. If they’d asked (I didn’t, it was 6 pm and I was losing the will to go on), and if she’d given a straight answer, the Irish journalists would have learned the shocking truth.

What her propaganda pitch didn’t mention about Catherine Ashton’s new empire was that the new service is in raging cost-overrun. It is going to head for at least ¤33 million over its ¤455 million budget this year already – and it hasn’t even been launched yet.

Thirty-three million over budget in one year, and that is just called a failure to be ‘revenue neutral’. As I said, eurocrats’ slimy-speak. It’s the painful torture of a life in Brussels.

The EU-innocents last night boarded their flight back to Dublin. Before they left, I asked three of them if they’d felt their trip was a good use of taxpayers’ money. All three agreed it was.

I may ask them again after they see the tax increases that Finance Minister Brian Lenihan has planned for them in the next Budget. How strange that some journalists haven’t figured it out yet: there really is no such thing as a free lunch. Just like there’s no such thing as EU ‘information’.

Anthony Coughlan on the Eamon Dunphy Show

Audio file:

  • 100521_NewsTalk_Dunphy_Coughlan: Eamon Dunphy (”The Eamon Dunphy Show”: NewsTalk106fm) has Anthony Coughlan on with his panel of guests, to discuss the Irish and European economies, and the trials and tribulations of the Euro☚ (time -19:20; format – M4a/Quicktime/iTunes; date – May 16, 2010);

To access via iTunes, either:

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