For Your Information: Ireland, EU, Eurozone, Banks & Economy – News & Analysis

Ghosts of debt and jobs will haunt economy
The Irish Times – Tuesday, December 29, 2009
http://www.irishtimes.com/newspaper/opinion/2009/1229/1224261354227.html
Morgan Kelly
OPINION : By 2015, Iceland will almost certainly be a lot better off than Ireland because it dealt decisively with its banks.

For grand corruption, though, we will have to look to Nama. By allowing the banks to dictate the terms of their bailout, the bank rescue was turned into the most lucrative and audacious Tiger Kidnapping in the history of the State, with the difference that, like the sheriff in Blazing Saddles, the bankers held themselves hostage.

Bad banks like Nama were tried on a large scale in the early 1930s in the US, Austria and Germany; and proved to be profoundly corrupt and corrupting institutions, whose primary purpose was to funnel money to politically connected businesses. The German bank is best remembered for setting up what we would now call a special purpose vehicle to fund the presidential election campaign of the odious Paul Hindenberg.

Bad banks do not just happen to be corrupt and anti-democratic institutions, it is what they are designed to be. Effectively, bad banks give governments the power to choose which of a country’s most powerful oligarchs will be forced into bankruptcy, and which will be resuscitated to emerge even more powerful than before.

Nama will get to pick which of the fattest hogs of Irish development will be sliced up and fed, at taxpayer expense, to better connected hogs (remember that Nama has been allocated at least €6.5 billion, considerably more than the Government saved by draconian budget cuts, to “lend” to favoured clients).

While Nama may have momentous political consequences, it has already failed economically: the Irish banks are still zombies, reliant on transfusions of European Central Bank funding to survive until losses on mortgages and business loans finally wipe them out. In the next few months we will discover if the State bankrupts itself by nationalising the banks; or if it has the intelligence to free itself from bank losses by turning the foreign creditors of banks into their owners, as Iceland has just done with Kaupthing bank.

It is ironic that by 2015, having devalued its currency and dealt decisively with its banks, Iceland will almost certainly be a lot better off than Ireland.


Why the eurozone has a tough decade to come
Financial Times – January 6 2010
http://www.ft.com/cms/s/0/54cc3b20-fa62-11de-beed-00144feab49a.html
Martin Wolf

What would have happened during the financial crisis if the euro had not existed? The short answer is that there would have been currency crises among its members. The currencies of Greece, Ireland, Italy, Portugal and Spain would surely have fallen sharply against the old D-Mark. That is the outcome the creators of the eurozone wished to avoid. They have been successful. But, if the exchange rate cannot adjust, something else must instead. That “something else” is the economies of peripheral eurozone member countries. They are locked into competitive disinflation against Germany, the world’s foremost exporter of very high-quality manufactures. I wish them luck.
[…]
Where does that leave peripheral countries today? In structural recession, is the answer. At some point, they have to slash fiscal deficits. Without monetary or exchange rate offsets, that seems sure to worsen the recession already caused by the collapse in their bubble-fuelled private spending. Worse, in the boom years, these countries lost competitiveness within the eurozone. That was also inherent in the system. The interest rates set by the European Central Bank, aimed at balancing supply and demand in the zone, were too low for bubble-fuelled countries. With inflation in sectors producing non-tradeables relatively high, real interest rates were also relatively low in these countries. A loss of external competitiveness and strong domestic demand expanded external deficits. These generated the demand needed by core countries with excess capacity. To add insult to injury, since the core country is highly competitive globally and the eurozone has a robust external position and a sound currency, the euro itself has soared in value.

This leaves peripheral countries in a trap: they cannot readily generate an external surplus; they cannot easily restart private sector borrowing; and they cannot easily sustain present fiscal deficits. Mass emigration would be a possibility, but surely not a recommendation. Mass immigration of wealthy foreigners, to live in now-cheap properties, would be far better. Yet, at worst, a lengthy slump might be needed to grind out a reduction in nominal prices and wages. Ireland seems to have accepted such a future. Spain and Greece have not. Moreover, the affected country would also suffer debt deflation: with falling nominal prices and wages, the real burden of debt denominated in euros will rise. A wave of defaults – private and even public – threaten.

The crisis in the eurozone’s periphery is not an accident: it is inherent in the system. The weaker members have to find an escape from the trap they are in. They will receive little help: the zone has no willing spender of last resort; and the euro itself is also very strong. But they must succeed. When the eurozone was created, a huge literature emerged on whether it was an optimal currency union. We know now it was not. We are about to find out whether this matters.


Are we about to see the end of the much-vaunted eurozone?
The Observer – Sunday 3 January 2010
http://www.guardian.co.uk/commentisfree/2010/jan/03/peter-oborne-end-of-eurozone
Peter Oborne
In putting financial considerations before social ones, the governments of Europe have ensured that things can only get worse

It is nearly 20 years since the Conservative chancellor of the exchequer Norman Lamont made his notorious remark that unemployment was a “price worth paying” for the restoration of economic stability. Lamont was at once condemned for his comments, made at the height of Britain’s ill-fated membership of the Exchange Rate Mechanism. The progressive left universally denounced him as arrogant, brutal and out of touch. And yet, only two decades later, the European left has made the identical calculation. The imposition of the euro, and the rigid economic policy a single currency implies, is having socially catastrophic effects across much of Europe on a scale that dwarfs Britain’s suffering in the 1990s.

Consider the facts. In Spain, unemployment has already reached a gut-wrenching 19.3%. But unemployment for those between 16-24 is a catastrophic 42%. In Greece, youth unemployment is 25%, in Ireland 28.4% and Italy 26.9%. Marginal eurozone countries such as Greece, Spain and Ireland are not just in recession. They are in depression – and so long as they remain inside the euro there is no exit.

Before their decision to abandon economic sovereignty and sign up to the euro, policymakers had a tried and tested response to the kind of global setback of the last two years – depreciate the currency and loosen fiscal and monetary policy[…] But inside the euro, individual countries are stripped of the ability to manage their own economies. That is why the global recession has been far, far more devastating for some eurozone members than would otherwise have been the case – in just the same way that membership of the ERM inflicted wholly unnecessary damage on the British economy in the early 1990s.

The European single currency amounts to an experiment in social and economic engineering on a scale only very rarely before encountered in world history. The great question is whether it will work. There is a universal belief among the European political and economic elite that the euro will continue, no matter how much damage it inflicts or how many jobs it costs.
[…]
I believe that this heartless analysis is mistaken, and that the eurozone will in due course collapse (as Karl Marx might well have remarked) under the weight of its own contradictions. Economically, the euro can be spotted a mile off: it is a classic bankers’ ramp. It is designed to do all the things that bankers have historically wanted: create efficient markets, drive down the cost of labour, impose price stability, eliminate trade barriers, confound national boundaries and maximise corporate profits. Bankers don’t care much about youth unemployment in Madrid or home repossessions in Lisbon or riots on the streets of Athens. They worry about the bottom line and the euro has been very good for the bottom line, with stock markets up by an obscene 50% over the last eight months.


Should we divorce the euro?
The Sunday Business Post – 10 January 2010
http://www.sbpost.ie/commentandanalysis/should-we-divorce-the-euro-46642.html
David McWilliams

Joining a currency union is the economic equivalent of a marriage. If a country decides to give up its currency and get into bed with another currency, it would seem ludicrous to entertain this move without being sure that the union was suitable. As we all know, there is a difference between fancying someone and making the thing last.

To avoid single currency arrangements going sour, there is also a ‘matchmaker’ in economic theory. The economic matchmaker goes by the typically incomprehensible name of the ‘optimal currency area theory’. This theory is a checklist of economic attributes which need to line up in order for a monetary union to work.

For a currency union to work for a country, the most important thing is that the country trades overwhelmingly with the other members of the monetary union.

This ensures that all the countries in the union move roughly in the same economic cycle. It is also important that the structures of the respective economies are broadly similar, so that one country doesn’t experience a huge boom, while the rest are just motoring along nicely.

Having similar structures in banking and housing, for example, will imply that a country should not suffer a monumental bust, while the others are merely experiencing a normal recession. Equally, it is important that there is significant movement of people within the currency union – like there is in the US between its states – so that, if a country does slump, its citizens can move to find work in another member country.

In general, for a currency union to work, there should also be a single fiscal policy so that, when one area of the currency slumps, the rest of the union’s taxes go some way to ease the problems in the region in difficulty. This is how the currency unions in the US, Canada and Australia work.

Guess what? None of these attributes was in place when Ireland joined the EU economic and monetary union (EMU) and the euro. So it is clear that we didn’t join for economic reasons. So why did we join? It seems that we were too insecure to behave logically and this national insecurity – particularly among our senior mandarins – prevented us from having a debate.
[…]
The reason we should ask these questions is that it is clear the euro has been a disaster for Ireland, and will ensure our slump lasts considerably longer than it has to. When we look at other countries, we see that, of the three entrants into the then EEC in 1973,we are the only ones using the euro. However, we trade less with other eurozone countries than either Denmark or Britain.


The Irish Credit Bubble
University College Dublin Centre for Economic Research Working Papers Series – WP09/32 – December 2009
http://www.ucd.ie/t4cms/wp09.32.pdf
Google Cache (Web Page)
Morgan Kelly

While NAMA is intended to repair, for now, the damage to the asset side of Irish bank balance sheets from developer loans, their liability side appears unsustainable. The aggressive expansion of Irish bank lending was funded mostly in international wholesale markets, where Irish banks were able to borrow at low rates. From being almost entirely funded by domestic deposits in 1997, by 2008 over half of Irish bank lending was funded by wholesale borrowers through bonds and inter-bank borrowing. This well of easy credit has now run dry. In the words of Bank of England Governor Mervyn King: “But the age of innocence—when banks lent to each other unsecured for three months or longer at only a slight premium to expected policy rates—will not quickly, or ever, return.” As foreign lenders have become nervous of Irish banks, their place has increasingly been taken by borrowing from the European Central Bank and short-term borrowing in the inter-bank market. Payments from NAMA will allow Irish banks to reduce their borrowing by a trivial amount.

Without continued government guarantees of their borrowing and, more problematically, continued ECB forbearance, the operations of the Irish banks do not appear viable.
[…]
By pushing itself close to, and quite possibly beyond, the limits of its fiscal capacity, the Irish state has succeeded in rescuing Irish banks from their losses on developer loans. Despite this, these banks remain as zombies entirely reliant on continued Irish government guarantees and ECB forbearance, and committed solely to reducing their own debts.

While bank capital levels are, probably, adequate for the markedly smaller scale of their future lending, we will see below that even fairly modest losses on their mortgage portfolios will be sufficient to wipe out most or all of that capital. Having exhausted its resources in rescuing the Irish banks from the first wave of developer losses, the Irish state can do nothing but watch as the second wave of mortgage defaults sweeps in and drowns them. In other words, it is starting to appear that the Irish banking system is too big to save. As mortgage losses crystallise, the Irish government’s ill conceived project of insulating bank bond-holders from any losses on their investments is sliding beyond the means of its taxpayers.

The mounting losses of its banking system are facing the Irish state with a stark choice. It can attempt a NAMA II for mortgage losses that will end in a bond market strike or a sovereign default. Or it can, probably with the assistance of the IMF and EU, organise a resolution that shares property losses with bank creditors through a partial debt for equity swap. It is easy for governments everywhere to forget that their states are not wholly controlled subsidiaries of their banks but separate entities; and a resolution that transfers bank losses from the Irish taxpayer to bank bond holders will leave Ireland with a low level of debt that, even after several years of deficits, it can easily afford.

Lisbon Treaty News: Europe with us, Elites against

McCreevy: 95% of countries would probably have voted No in Lisbon Treaty referendums
Saturday’s Irish Times reported on EU Internal Markets Commissioner Charlie McCreevy’s comments last week, in which he said, “When Irish people rejected the Lisbon Treaty a year ago, the initial reaction ranged from shock to horror to temper to vexation. That would be the view of a lot of the people who live in the Brussels beltway. On the other hand, all of the [political leaders] know quite well that if the similar question was put to their electorate by a referendum the answer in 95 per cent of the countries would probably have been No as well.”

Saturday’s Irish Independent also reported that he said that Irish people should not be ashamed about how they voted, and quoted him saying “I’ve never been ashamed to stand up for the way we do our business here. We do it by referendum. That’s democracy.”

EurActiv quotes Open Europe Director Lorraine Mullally saying that the Irish Commissioner’s “honesty” had “touched a nerve” and that his statement “probably reflects what most other EU leaders think themselves”.

Open Europe blog Open Europe briefing Irish Times Irish Independent EurActiv Economist: Charlemagne blog Telegraph Sunday Telegraph Irish Times 2
___________
Bruce Arnold: Ireland’s “legal guarantees are worthless”
Under the headline, “Government has abandoned democracy to get a ‘Yes’ vote”, Bruce Arnold argued in Saturday’s Irish Independent that Irish PM Brian Cowen was “abandoning democracy the day after the vote. He was then servile in courting European countries, telling them how sorry he was that the Irish people had insulted Europe and assuring them of changed times ahead. He then isolated a few marginal issues, none sufficient for the size of the huge vote, invented a survey of the “real” Irish view on Lisbon and claimed that amending doubts about neutrality, abortion and taxation would do the trick. No need, he said, to look further into the more serious and fundamental EU drawbacks.”

He continued, “The legal guarantees are worthless and do not change the treaty. However, they had the desired effect. A number of foolish and misguided public figures, respected for talk shows on television, selling groceries, writing poetry, went public and said they would vote ‘Yes’.”

In the Irish Independent, columnist Maurice Hayes writes “The clarifications [protocols] in this case are less an explanation of what is in the treaty, than an affirmation of what is not. More nuanced it may be, but the question remains the same — as does the treaty.”
Irish Independent: Arnold Irish Independent

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EU OBSERVER                                     29.6.09

Irish commissioner says EU Treaty would be rejected in most countries

HONOR MAHONY

Ireland’s EU commissioner, Charlie McCreevy, has said that the Lisbon Treaty would be rejected by most member states if put to a referendum (Irish Times,

With just a few months to go before his own country’s second referendum on the document, the plain-speaking former finance minister said 95 percent of the 27 member states would have said “no” to the new institutional rules if it had been put to a vote.

The commissioner, in charge of the internal market, reckons all leaders know this and it is only officials working in the EU institutions who have unrealistic expectations about the popularity of the treaty, designed to streamline how the EU functions and removing the unanimity requirement for decision-making in most policy areas.

“When Irish people rejected the Lisbon Treaty a year ago, the initial reaction ranged from shock to horror to temper to vexation. That would be the view of a lot of the people who live in the Brussels beltway,” he told the Institute of Chartered Accountants of Ireland on Friday (26 June), reports the Irish Times.

“On the other hand, all of the [political leaders] know quite well that if the similar question was put to their electorate by a referendum the answer in 95 per cent of the countries would probably have been ‘No’ as well.”

“I have always divided the reaction between those two forces: those within the beltway, the ‘fonctionnaires’, those who gasp with horror [on the one hand] and the heads of state, who are far more realistic. They are glad they didn’t have to put the question themselves to their people.”

Ireland rejected the Lisbon Treaty in a referendum a year ago. In the run up to that vote, Mr McCreevy stole the headlines by saying he had not read the treaty from cover to cover and that no “sane” person had done so.

His admission prompted Irish journalists to ask other politicians about whether they had done their Lisbon homework, eventually exposing the fact that Irish Prime Minister Brian Cowen had not read it either.

This time round, Irish voters, shaken by the devastating effects the economic crisis has had on the country, are thought more like to vote “Yes”. Recent polls have indicated a majority intend to give the green light to the document,
At a summit earlier in June, EU leaders agreed to a set of guarantees on the Lisbon Treaty designed to persuade voters to say “Yes”.

The treaty needs to be approved by all member states before going into force. Ratification has also not yet been completed in Germany, Poland and the Czech Republic, where the president of all three countries have to sign the document.

________

WALL STREET JOURNAL     26.6.09
The EU’s Latest Power Grab

From today’s Wall Street Journal Europe

In some countries they rig votes, in the European Union they repeat votes to get the desired result.

After Ireland last year rejected the EU’s Lisbon Treaty — itself a rehashed carbon-copy of the EU Constitution that Dutch and French voters rebuffed in 2005 — the Irish are being asked to reconsider. There will be another referendum in early October, Prime Minister Brian Cowen said Wednesday, and this time the Irish are expected to get it right. In Europe, they don’t take “no” for an answer.

Proponents say the Lisbon Treaty is key to reforming the squeaky institutions of the 27-member union. Skeptics, including a majority in Ireland, see a significant power grab. The Treaty gives the EU a nonelected president, a quasi foreign minister, a beefier defense and foreign policy and fewer national vetoes in a number of policy areas.

To justify a revote, EU leaders put on a big show at last week’s summit, giving the impression of tough negotiations in which Dublin supposedly won important concessions. The main prize Mr. Cowen took home is a protocol that claims to address Irish concerns, such as worries that the Treaty would allow the EU to meddle in Irish taxation, abortion issues, workers rights and neutrality.

Oh really? According to the EU summit’s own conclusions, the protocol “will clarify but not change either the content or the application of the Treaty of Lisbon.” So the Irish will vote on the same text they previously rejected by a seven-percentage-point margin despite assurances by their government as recently as last month that this would not happen.

In the year since the last vote, the Irish economy has tanked, and a pro-Brussels vote this time is possible if only because many Irish worry that the EU may abandon them in their economic hour of need. It’s a fear the government knows how to exploit. A precondition for economic recovery, Mr. Cowen said Wednesday, is to “remove the doubt about where our country stands in relation to Europe.”

Just a couple of weeks ago the bien pensants in Brussels bemoaned the success of euroskeptics in European Parliamentary elections. This latest run-around on the Lisbon Treaty for the purpose of boosting the power of the EU at the expense of individual states is not the way to create more europhiles.

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24 June 2009

Gordon Brown: Irish ‘guarantees’ will “clarify not change” the Lisbon Treaty
Gordon Brown and Conservative leader David Cameron clashed in the Commons last night over the ‘clarifications’ given to Ireland on the Lisbon Treaty. PA notes that Brown insisted that the ‘guarantees’ given to Ireland would “clarify but not change” the Lisbon Treaty. Brown said that a new protocol would in no way alter the relationship between the EU and member states.  He said: “To be absolutely clear, the Heads of State or Government have declared: the Protocol will in no way alter the relationship between the EU and its Member States. The sole purpose of the Protocol will be to give full Treaty status to the clarifications set out in the Decision to meet the concerns of the Irish people. The Protocol will clarify but not change either the content or the application of the Treaty of Lisbon”.

Brown added, “They have received their clarifications. It will be set out in a protocol. It will come to all Houses of Parliament, at the next accession treaty, when that has to be confirmed by these Houses of Parliament.”

Cameron responded saying, “Why are Irish voters being forced to give their views twice when the British people haven’t been asked for their views once?”  He also criticised the method by which Ireland’s ‘guarantees’ are expected to become legally binding: “Will you explain why the protocols won’t be debated or put into place until the next countries join the EU. Isn’t it the case the Government wants to delay this until after the next election. They don’t want the embarrassment of having to vote yet again in the Commons to deny people the referendum they originally promised.”

When asked “do the guarantees have legal effect and if so how?”, Brown answered: “They will be deposited in the way that often happens at the United Nations and will have legal effect from the time that the Lisbon Treaty is in power.”

Meanwhile, writing in the Irish Times, Irish Prime Minister Brian Cowen sets out his reasons why Irish people should vote ‘Yes’ in the second referendum.  He claims that “accusations that the outcome of the summit was a pre-cooked charade are wrong and highly insulting to our EU partners.”  He says, “Many member states struggled with Irish reluctance to sign up to what they see as a necessary updating of the union’s rulebook. Some were alarmed at being asked to agree guarantees on issues not even mentioned in the Lisbon Treaty. Others, perfectly legitimately, did not wish to reopen their own democratic ratification processes.”

The paper notes that Cowen will name the exact date for the second Lisbon Treaty referendum when legislation to allow it take place goes through Ireland’s Dáil and Seanad in a fortnight’s time.
Irish Times Irish Times 2 Irish Times 3 Irish Times: Cowen Hansard Open Europe blog

German MEP threatens Ireland with “second class” status and “isolation” if it rejects the Lisbon Treaty again

The Parliament reports that senior German MEP Jo Leinen has warned that Ireland risks being relegated to a “second class” nation if it again rejects the Lisbon Treaty in a referendum scheduled for the autumn. Leinen said, “If there is a ‘No’ vote in Ireland I think we are likely to see a two-speed Europe emerge, with Ireland being in what might be called the ‘second class’.
The Parliament

European Commission wants database for all 500 million citizens, raising “big brother” concerns

The European Commission has proposed to set up a new agency to oversee all its large-scale IT systems, thereby bringing together management of three key systems – the Schengen Information System, Visa Information System and Eurodac – plus other related applications, into a single operational structure. Webwereld reports that human right groups have expressed fears for big brother implications, as this would mean that data on all 500 million European Union citizens and all illegal migrants would be merged into a database for “freedom and security”. The cost of the system would be ¤113 million in the first 3 years, and later ¤10 million per year following that.
Computing.co.uk Webwereld

Spain’s ¤2.7bn in EU fishing subsidies accused of exacerbating overfishing

According to the Guardian, Spain has received more than ¤2.7bn in subsidies in the last 12 years for fishing practices which exacerbate overfishing. Markus Knigge, Research Director for Pew Environment Group has said that “rather than encouraging sustainable fishing, subsidies have contributed to ever-greater capacity of fishing fleets and in turn to the depletion of valuable fish stocks”.

According to the paper, similar levels of subsidies exist in the current 2007-2013 budget period, with some of the biggest cash windfalls going to ships notorious for their questionable practices. Greenpeace named a Spanish trawler which has received more than ¤4m in subsidies as “the most egregious offender against vulnerable stocks of Mediterranean blue fin tuna”. A new website, “fishsubsidy.org” has been created to establish greater transparency about EU fishing subsidies.
EurActiv Guardian

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Mary Ellen Synon in Irish Daily Mail, 17 June, article entitled ‘The new Stasi’.

17 June 2009
The lives of … all of us
You know what they say about restaurants: there is no such thing as just one rat in the kitchen. It is the same here in Brussels. This week the Irish have finally seen the draft of assurances Brian Cowen’s government want from the other EU members before they make the Irish vote again on the Lisbon Treaty. The draft is a rat, but I’l deal with it later, after I’ve seen what is going to happen to the ‘assurances’ tomorrow and Friday at the European Council. Today I will deal with one of the other rats in Brussels, the Stockholm Programme.

It is unlikely you have ever heard of the Stockholm Programme. It has only just been published. However, a committee known as the Future Group, organised by the justice commission, started planning it in January 2007. The full name of the Future Group is ‘the Informal High Level Advisory Group of the Future of European Home Affairs Policy.’ The British had no representative on it, merely an ‘observer.’

The group’s findings have been bundled up as the Stockholm Programme. Here is how it works. The Lisbon Treaty gives new legal powers to the European institutions over, among other things, cross-border police co-operation, counter-terrorism, immigration, asylum and border controls. The Stockholm Programme outlines how the justice commission will implement these new legal powers for the next five years.

The commission claims the programme covers policy on ‘freedom, security and justice serving the citizen.’ Look closer and you will see it actually covers policy for restrictions on the citizen, surveillance by the European state — yes, your fingerprints, credit card charges, email traffic and health records are now going to be available from Galway to Bucharest — and the destruction of British judicial independence by the European institutions. Stockholm is a rat, and a big one.

If you don’t want to take it from a right-wing libertarian like me, you can take it from a whole pack of left-wing libertarians, the European Civil Liberties Network. The ECLN is made up of groups drawn from across Europe. One of the founders was Gareth Peirce, solicitor for the Guildford Four and the Birmingham Six, and more lately for one of the prisoners at Guantanamo. Here is what the ECLN have to say about the Stockholm Programme: the policies outlined in Stockholm ‘constitute an attack on civil liberties and human rights.’ The warn against ‘dangerous authoritarian tendencies within the EU.’

They are right to do so. Under EU legislation, state agencies are already implementing comprehensive surveillance regimes and beginning to  build up what the ECLN calls a ‘previously unimaginably detailed profile of the private and political lives of their citizens.’ This is often done in the absence of any data protection standards, judicial or democratic controls.

‘The EU has gone much further than the USA in terms of the legislation it has adopted to place its citizens under surveillance. While the Patriot Act has achieved notoriety, the EU has quietly adopted legislation on the mandatory fingerprinting of all EU passport, visa and residence permit-holders and the mandatory retention — for general law enforcement purposes — of all telecommunications data (our telephone, e-mail and internet usage records).’

The Future Group and their Stockholm Programme say they foresee a ‘digital tsunami’ that will revolutionise law enforcement. Add this to the fact that, as the ECLN says, ‘EU data protection law has already been left behind, with surveillance all but exempted. Individual rights to privacy and freedoms are being fatally undermined.’

One of the most rat-like things about these new proposals is the plan to set up a ‘Homeland Security’ industry. Billions of euros may be given as subsidies to European corporations to help them compete with US industries in developing security equipment and technology. If you knew how many thousands of uncontrolled, unregistered corporate lobbyists there are in Brussels, you would recognise the hand of European technology corporations in the drafting of this programme. Brussels will give the military-industrial corporations billions in European taxpayers’ money, and in return the corporations will deliver technology that helps all the new European security forces track every one of us.

What is coming out of this will undoubtedly be an EU identity card and population register. Even Dick Cheney didn’t dare try that one. There will be the power of security forces (forget ‘cops,’ what you are going to be hearing more and more about are ‘security forces’) to search computer hard-drives. But the security forces won’t be coming through your door with a warrant. The searches will be ‘remote,’ online. This will be a particular threat to lawyers, journalists and any politicians opposing these growing EU powers. The policy of remote hard-drive searches was first proposed for the EU by the German government in June 2008. Yes, the German government want a euro-Stasi. It really is so satisfying when politicians live up to their national stereotype.

Statewatch, another organisation monitoring civil liberties in Europe, is also warning against the Stockholm Programme. In an analysis of the Future Group’s report by Tony Bunyan, he writes: ‘European government and EU policy-makers are pursuing unfettered powers to access and gather masses of personal data on the everyday life of everyone — on the grounds that we can all be safe and secure from perceived “threats.”‘

‘There is an assumption, on this and wider issues in the EU, that “if it is technologically possible, why should it not be introduced?”‘

He notes that the EU’s Schengen Information System (SIS) is to be upgraded to hold more categories of data (including fingerprints and DNA), access to all the data is tobe extended to all agencies (police, immigration and customs).’ The commission has proposed a system to track the names of all passengers in and out of the EU, but some governments ‘do not like limiting the use of data to terrorism and organsied crime and want to extend the proposals’ scope from just in and out of the EU to travel between EU states and even within each state.’ They want to extend it to sea travel and car travel, too: all those specialised cameras developed for reading car registration plates make it possible.

Ah, but ordinary people will be told that if they have nothing to hide, they have nothing to fear. Ordinary people who believe that  will then never realise, as Mr Bunyan says, ‘why they did not get a job interview because their employer had access to a criminal record based on a “spent” conviction or why their application for an insurance policy failed because the company had access to their health record.’

The final agreement on all this is due to be adopted by heads of state and government at a meeting in Stockholm in December. Between now and then there is nothing any of us can do to stop it — except force David Cameron to give Britain a referendum on the Lisbon Treaty, no matter how many other countries have already ratified the treaty. Remember, the legal powers to establish this new techno-surveillance are only delivered to Brussels by the Lisbon Treaty. So demand a referendum, then vote No: or your secret ballot on Lisbon may be the last secret left to you.

17 June 2009 10:52 AM
The lives of … all of us

____________

What the European Community is doing on our behalf.
Brussels, 4.6.2009  COM(2009) 255 final  2009/0073 (CNS)
Proposal for a
COUNCIL DECISION
on the signing, on behalf of the Community, of the Arrangement between the European Community, of the one part, and the Swiss Confederation and the Principality of Liechtenstein, of the other part, on the modalities of the participation by those States in the European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the European Union
Proposal for a
COUNCIL DECISION on the conclusion, on behalf of the Community, of the Arrangement between the European Community, of the one part, and the Swiss Confederation and the Principality of Liechtenstein, of the other part, on the modalities of the participation by those States in the European Agency for the Management of Operational Cooperation at the External Borders of the Member States of the European Union

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2009:0255:FIN:EN:PDF

McCreevy slams “hidden” tax plan – May 2007

Bernard Purcell
in Brussels.

Ireland’s EU Commissioner Charlie McCreevy yesterday broke ranks with his Brussels colleagues and officials in an unprecedented outspoken attack on  their “long-term hidden agenda” for a common corporation tax base.

Mr McCreevy told a business lunch in Dublin  the proposal currently under consideration, and due to become Community law next year, is a “sinister” idea that “refuses to die”.

He attacked the way permanent officials in the Commission  sought to smuggle the proposal through by saying it would be “optional” when it was really “an unworkable charade” and  “underhand tactic to destroy tax competition in Europe”.

NOT WORKABLE

“Optionality is not workable and it is hard to believe the designers of the proposal don’t realise that,” he said

“The deliberately unworkable proposals (for a common consolidated tax base)  amount to a Trojan horse to enable the Commission take control of taxation”, Commissioner  Charlie McCreevy suggested. He said that it  was part of a “long-term hiden agenda”, a “sinister idea that refuses to die”
– Irish Independent, 12 May 2007

Individual member states – especially the smaller ones – would either no longer be able, or have the incentive, to manage effectively their public finances or direct foreign investment.

Ireland has the most competitive corporation tax rate of the EU-15, currently  at 12.5 pc. Some of the larger countries like France, Britain  and Germany have rates of 28 pc and higher.

He added that companies’ tax advisers  would go “regime shopping” between the 27 tax regimes and a 28th “common” base run by Brussels.

Inevitably there would be “leakage” from individual national exchequers leaing to complaints from countries, thus opening the door to “the permanent officials in DG Tax to say optionality should go”.

Another reason “optionality”  woud be pre-determined to fail is because as countries realised they would be writing fat cheques to other members of the “opted in” club, they would stay out, leaving a shrinking pool of states with clear “winners and losers”.

Even more sinister, said the Competition Commissioner, were plans to give the lion’s share of consolidated tax revenues to bigger countries like Germany and France at the expense of smaller natlons.

It was clear from 50 years of history  “and the reality of the institutional continuity of the Commission and its culture” that no matter how often certain proposals might be turned down, the officials sneak them out in different guises, he said.

“What is envisaged by those seeking to foist a CCCTB on Europe is quite different to what appears  on the label,” warned McCreevy. “It is important that Member States understand fully what is going on,” he said.

_______

“The deliberately unworkable proposals (for a common consolidated tax base in the EU)  amount to a Trojan horse to enable the Commission take control of taxation”, Commissioner  Charlie McCreevy suggested. He said that it  was part of a “long-term hidden agenda –  a sinister idea that refuses to die”

Even more sinister, said the Competition Commissioner, were plans to give the lion’s share of consolidated tax revenues to bigger countries like Germany and France at the expense of smaller natlons.

It was clear from 50 years of history  “and the reality of the institutional continuity of the Commission and its culture” that no matter how often certain proposals might be turned down, the officials sneak them out in different guises, he said.

“What is envisaged by those seeking to foist a CCCTB on Europe is quite different to what appears  on the label,” warned McCreevy. “It is important that Member States understand fully what is going on,” he said.

- Irish Independent, 12 May 2007

Daily Telegraph: Will Germany deliver on the Faustian bargain that created monetary union?

DAILY TELEGRAPH
Monday 23.2.08

If Der Spiegel is correct, the German finance ministry is drafting rescue plans to prevent default on the edges of the eurozone leading to a full-blown collapse of Europe’s monetary system.

By Ambrose Evans-Pritchard

This is an entirely appropriate policy in economic terms. One dreads to think what would happen if the world’s twin reserve currency were to disintegrate at this stage.

But what about the solemn pledge to voters by Germany’s political elites – promiscuously given over the years – that monetary union would never leave them on the hook for the debts of half Europe?

The vast imbalances that have been allowed to build up under the seductive protection of EMU leave German taxpayers facing bail-out liabilities that exceed the cost of reparations after the First World War in proportional terms.

The political ground has not been prepared for this. EMU was foisted on the German people without a referendum, in the face of deep public scepticism and scathing criticisms by the professoriat. This failure to secure a mandate for such a revolutionary undertaking is coming back to haunt them.

Berlin is at last having to deliver on the Faustian bargain made by Germany’s political class when it swapped the D-Mark for French acquiescence in reunification. It must either go the whole way towards EMU fiscal union and take responsibility for Italy’s public debt (111pc of GDP by next year), Austria’s loans to Eastern Europe (70pc of GDP), the adventures of Ireland’s ‘Canary Dwarf’ (€400bn or so in liabilities), and Spain’s housing collapse (1m unsold homes), or jeopardize its half-century investment in the political order of post-war Europe. Letting EMU fail at this stage would have far higher costs than never having launched the project in the first place.

The alleged bail-out options include “bilateral bonds” where big brother countries agree to shoulder the credit risk for siblings, (who vouches for Italy and Spain?), or some form of EU bond.

[…]

For now, the bail-out talk has cowed speculators. The euro has rallied after weeks of sharp descent against the dollar. Credit default swaps (CDS) on Irish debt have fallen back below the red alert level of 400 basis points. But it has not been lost on the markets that Germany’s own CDS spreads have risen to a record 86. Are traders starting to ask whether Berlin is in a fit state to rescue anybody?

The German economy contracted at an 8.4pc annual rate in the fourth quarter as exports to Eastern Europe, Club Med, and the Anglo-sphere collapsed.

[…]

Last week chief economist Jurgen Stark attempted to head off the bail-out plans, reminding Berlin last week that rescues are prohibited by EU law. This is not strictly true – Article 100.2 allows aid in “exceptional circumstances” – but it gives powerful cover to anybody wishing to oppose the Steinbruck policy.

But whatever the legal theory, the political reality is that 700,000 Germans are going to lose their jobs this year as unemployment rises to 4.3m (IFO Institute). Voters are not going to look kindly on any party seen to divert German savings to Ireland or Club Med.

Architects of EMU were well aware that a one-size-fits-all monetary policy for vastly disparate nations would create serious tensions over time. They gambled that this would work to their advantage. The EU would be forced to create new machinery to safeguard its investment in the euro. It would be a “beneficial crisis”, bringing about the great leap forward to full union.

We are about to find out if they were right.

⁂ European Central Bank capitulating in face of crisis

Two similar articles from newspapers on the political Right and Left forwarded for your information by Anthony Coughlan:

TELEGRAPH
Tuesday 24.2.09

ECB faces mutiny from national bank governors as recession deepens
– The European Central Bank is capitulating.

By Ambrose Evans-Pritchard

For months the ECB held sternly to the high ground of orthodoxy as the US, Japanese, British, Canadian, Swiss and Swedish central banks slashed rates towards zero and embraced quantitative easing, but a confluence of fast-moving events is now forcing it to move.

The credit default swaps that measure bankruptcy risk on the debts of Ireland, Austria and a clutch of Latin Bloc states have vaulted to dangerous levels. In the case of Ireland, the slump is spilling on to the streets. Some 120,000 marched through Dublin over the weekend to protest austerity measures.

The slow fuse on Eastern Europe’s banking crisis has detonated, leaving Austrian, Belgian, Italian and other West European banks with $1.5 trillion (£1 trillion) in exposure.

It is happening just as industrial output collapses in the eurozone’s core states. Germany’s economy contracted at 8.4pc annualised in the fourth quarter. ECB president Jean-Claude Trichet said on Monday that “a process of negative feedback” has set in where the banks and the real economy are pulling each other down in a self-reinforcing spiral. Eurozone credit is contracting. Banks are rationing credit as deleveraging gathers pace.

Rob Carnell, global strategist at ING, said the ECB has been painfully slow to acknowledge the global deflation tsunami sweeping across Europe.

“It seems divorced from reality. It is clearly nonsense to talk about inflation now: it has been negative on average for six months. The eurozone purchasing managers’ index has fallen twice as fast as in the US, so the ECB should be acting even faster than the Fed,” he said.

Mr Trichet said the ECB has increased its balance sheet by ¤600bn (£525bn) since the Lehman collapse in September. The bank is providing “unlimited liquidity” in exchange for a wide range of collateral, including mortgage bonds issued for the sole purpose of extracting ECB funds.

But the ECB’s leading voices have adamantly refused to contemplate going to the next stage: buying bonds and other assets with “printed money”. They see that as the Primrose path to hell. This week the tone has abruptly changed, suggesting that a majority of the 16 national bank governors on the ECB council are having second thoughts.

The apparent ring-leader is Cypriot member Anastasios Orphanides, a former Fed official and a world authority on deflation traps. He said on Monday that the ECB may have to go beyond “zero-bound” rates and revealed that an “internal discussion” was under way.

Italy’s Mario Draghi is in the “activist-easing” camp. “The experience in the US in the 1930s and Japan in the 1990s suggests that it is necessary to fight, in the early phases of the crisis, the tendency for real interest rates to rise,” he said.

Finland’s Erkki Liikanen is of the same opinion. “We are facing the worst financial crisis in our time. It is important not to exclude, ex ante, any measures.”

Julian Callow from Barclays Capital said 10 ECB governors are now doves.

This amounts to a mutiny against the Bundesbank-dominated executive in Frankurt. It is no great surprise. They have to answer to their democracies. The plot is thickening.


The Euro, an Illusory Shield against the Crisis ?

L’Humanite, Paris , Thursday 19 February 2009,

by Isabelle Metral (Translated)

Most political leaders of euro-zone countries make it sound as though the single currency has shown its capacity to play a protective role as the financial crisis sweeps across the Old Continent. So much so that today, even the staunchest of the Euro-sceptics (the British, Icelanders, Swedes, or Danes) are supposed to have suddenly realized the advantages of joining the euro…

The claim was made by Joaquin Almunia, European commissioner for economic and monetary affairs, on Tuesday last.

The EU leader’s statement actually betrays a growing concern in the face of signals showing increasing divergences between the different regions or countries of the euro zone. These divergences might eventually lead some countries to consider opting out of the single currency.

The crisis shows up the very serious defects in the original conception of the euro.

Entirely obsessed as they were with the stability criteria put forward by financial markets, those that championed its creation in 1999 were aiming first at a “strong euro” in the hope of luring as much capital as possible to the European market.

Hence the curb on public spending (with the Maastricht treaty), the pressure on wages through the deregulation of labour markets that diminished labour’s negotiating power. “The euro has brought war over exchange rates to an end, but it has exacerbated competition over prices,” rightly claimed Jean-Paul Fitoussi, president of the Observatoire français des conjonctures économiques

Today, the deepening crisis and the effect of the competition between states that sink deeper and deeper into debt have the additional effect – a refinement on the earlier stages – of bringing the pressure of competition to bear on the States’ capacity to meet their debts (in treasury bonds).

Indeed, if euro zone countries are united by the single currency and the European Central Bank, the rates at which they get loans, and the conditions attached to them, vary from one country to the next. Before the crisis, the spreads remained quite limited. But with the plunge into recession, and the gigantic assistance granted by the various states through bank bail-outs or economic stimulus plans, this is no longer true.

Spain and Ireland, for instance, which until a short time ago, were still praised as models of economic success by pro-marketers in Brussels and elsewhere, are now going through a period of fierce turbulence. As a result, they are at a disadvantage on financial markets and find it difficult to raise money.

Sovereign loans in the euro- one consequently tend to be widely spread. The risk premiums demanded from the frailest countries are soaring, unlike those demanded of Germany, which is still considered an exemplary borrower. The benchmark rate for German (Bund) loans over 10 years last Monday stood at 2.98%, much lower than that of France (3.50%), or of Spain (4.13%) or, above all, of Greece (5.47%).

The over-rated credit rating agencies were not slow in down-grading Madrid and Athens. Downgrading a state amounts to casting suspicion on its ability to pay back its debts as settled, in the best conditions.

In such circumstances, some countries that are strangled by the service of an increasingly heavy debt might be tempted simply to leave the euro ship. To ease the stranglehold, they might try devaluing their restored national currency as a last resource, in order to boost their exports.

This prospect has made the fortune of the managers of the Intrade site where, for the last few months, it has been possible to bet on one or several of the sixteen euro-zone countries opting out of the euro. The contract expires at the end of 2010.

What the Irish Government should now do on Lisbon

Submission to the Oireachtas Committee on Ireland’s Future in the European Union from The National Platform EU Research and Information Centre

(N.B. The four numbered headings below correspond to the four points of the Committee’s terms of reference)

1. The challenges facing Ireland following the Lisbon Treaty referendum result:

By voting No to the Lisbon Treaty on 12 June 2008 the majority of Irish voters rejected the proposal that they should change the Irish Constitution to allow the abolition of the present European Union and European Community which were established by the the 1992 Treaty of Maastricht, as amended, and their replacement by a legally new European Union, separate from and superior to its Member States, which would be established by the Lisbon Treaty, whose laws, acts and measures would thereafter have the force of law in the State.
The Irish people thereby rejected the attempt to establish a European  Union which would have the constitutional form of a supranational Federation, of which they would be made real citizens for the first time, just as the peoples of France and the Netherlands rejected a similar proposition when they voted No to the Treaty Establishing a Constitution for Europe in 2005.

Irish referendums are a form of direct legislation by the people

Irish referendums are a form of direct legislation in which the Irish people, who adopted their basic law or Constitution by direct referendum vote in 1937, decide to legislate or not to  amend that Constitution in subsequent referendums thereafter.  Last June’s referendum vote was a clear refusal by the people to assent to the constitutional revolution which had been presented to them for decision by the Government and Oireachtas in the 28th Amendment of the Constitution Bill, 2008.

Article 6 of the Constitution states that it is the right of the Irish people “in final appeal, to decide all questions of national policy.”  The matter at issue in the Lisbon Treaty vote was not just a question of national policy; it proposed to alter the fundamentals of the Constitution itself, as the Constitition of a sovereign State, by turning the Republic of Ireland into a constituent element of a supranational European Federation, a political Union which went far beyond the primarily economic European Community and European Union that Ireland is at present a member of.

The Irish people decided to reject Lisbon by clear majority vote. All Yes-side voters who are democrats should respect that vote and abide by it.   Any attempt to put the same Lisbon Treaty to the Irish people again with a view to reversing last June’s vote would almost certainly be in violation of Article 6 of the Constitution and would be open to consitutional challenge in the Courts.
“Respecting” the voters’ decision means abiding by it, not working to overturn it

Although the Government says that it respects the voters’ decision, which means that it should abide by it, all the signs are that Taoiseach Mr Brian Cowen and his colleagues, from the moment the trend of the ballot papers was evident at the referendum count, have set out to work with other EU Governments to overturn this democratic result in a second Lisbon referendum, just as occurred when voters rejected the Treaty of Nice in June 2001.

If Taoiseach Mr Brian Cowen and his colleagues had really respected the voters’ decision, they would have said to their EU colleagues that Ireland could not and would not ratify the Lisbon Treaty in view of the referendum vote. Further ratifications by other EU States would therefore have been pointless, as the Treaty can come into force only if all 27 signatory States ratify it, and there would have been no point in other Member States going ahead with ratifying the Treaty in the light of such a decision by Ireland.

This is what British Foreign Secretary David Milliband was referring to when he said on the day after the Irish vote that the future of the Lisbon Teaty was in the hands of Irish Taoiseach Brian Cowen.
At lunchtime on the day of the referendum count, while the ballots were still being sorted although their trend was clear, Foreign Minister Micheal Martin stated on RTE that “of course the ratifications by other countries will continue.” He would not have said this without the agreement of the Taoiseach.  That same morning Commission President Barroso spoke privately with the Taoiseach on the phone, after which he said that ratifications by the other EU States would  continue despite the Irish vote. This presumably reflected assurances which the Taoiseach gave him that the No vote last June did not mean that Ireland would not be ratifying Lisbon.

So while the Taoiseach, Foreign Minister Martin and other Government Ministers vehemently protest that they “respect” the people’s vote, they simultaneously refuse to accept the decision of the voters by telling their EU colleagues that Ireland would not therefore be ratifying the Lisbon Treaty. They have thereby encouraged the other EU States  to continue with their ratifications on the assumption that the Irish Government and Oireachtas  would  induce Irish voters to reverse their 12 June vote and ratify the Treaty in a second referendum, as occurred previously with the Nice Treaty.
This is not “respect” by Government Ministers for the decision of the voters. It is rather total disrepect. It amounts in effect to the Irish Government aligning itself with the governments of other EU countries,  and in particular those countries that are most committed to the Lisbon Treaty – Germany and France – and the Brussels Commission, against its own people in an attempt to bring about the constitutional revolution embodied in Lisbon, a revolution which would destroy their people’s national democracy and independence as citizens of a sovereign State.

A dilemma of the Government’s own making

If Taoiseach Brian Cowen and his colleagues find themselves next month to be the government of one of only a handful of EU Member States that have not ratified Lisbon, this will be entirely due to the unwillingness of the Taoiseach and his Government to respect the Irish people’s referendum vote on Lisbon. It will be due to their de facto efforts to  reverse that result in concert with President Sarkozy, Chancellor Merkel, Commission President Barroso and others.  This is truly a constitutionally awesome course for any Irish Government to take.

The suggestion that the other EU Member States are unwilling to open issues of concern in the Lisbon Treaty, or to “re-negotiate” its contents, is a spurious one, for the Treaty cannot come into force without Ireland ratifying it. If Ireland does not ratify, the Treaty falls.    All the issues of the Treaty’s contents  would still remain in play however, to be dealt with in the normal toing-and-froing of EU politics over the years or in further EU treaties at some future date.

The Lisbon Treaty and the EU Constitution which it embodies is a bad treaty for Ireland and for the EU, for the reasons publicly canvassed with voters in last June’s referendum and which were set our in our preliminary submission  to the Oireachtas Sub-Committee of 22 October (see below).

By refusing to ratify the Lisbon Constitution Ireland is also upholding its rejection by the peoples of France and the Netherlands, founder members of the original EEC – for the content of Lisbon is 96% the same as the original constitutional treaty that they voted No to.  By rejecting Lisbon and by standing by that rejection, Ireland is also upholding the existing European Union and European Community founded on the 1992 Maastricht Treaty as amended. It is refusing to allow the Prime Ministers and Presidents of the majority of EU countries to foist on the peoples of Europe a new and profoundly undemocratic European Union, in the constitutional form of a Federation, when opinion polls show that the peoples of most Member States do not want this and would reject it if they were given the opportunity of voting on it.

That this would be the case was admitted by French President Sarkozy when he stated at a meeting of group leaders in the European Parliament last year that “France was just ahead of all the other countries in voting No. It would happen in all Member States if they have a referendum. There is a cleavage between people and governments … A referendum now would bring  Europe into danger. There will be no Treaty if we had a referendum in France, which would again be followed by a referendum in the UK.” (EUobserver, 14 November 2007)

The EU Prime Ministers and Presidents act against their own peoples

That is the reason why the Prime Ministers and Presidents of the EU Member States gave a commitment to one another when they signed the Lisbon Constitution to avoid referendums on it at all costs. It is why the French and Dutch Governments refused to hold referendums on Lisbon even though it was virtually identical with the constitutional treaty their peoples had voted No to in 2005.  It is why British Prime Minister Gordon Brown abandoned his Labour Party’s  commitment, and his predecessor’s promise,  to hold  a referendum on an EU constitution in the UK. It is why the Danish Government is avoiding a referendum in Denmark even though referendums on major EU treaties have traditionally been required there.

A radically altered EU built on such undemocratic foundations would be inherently unstable and unable to endure.  That is why Ireland would be  upholding the best ideals of the European project by resisting the pressures  from the bigger EU States to re-run the Lisbon Treaty referendum with a view to reversing the majority decision of  Irish voters last summer.

By resisting such pressures Ireland would simultaneously be upholding the wishes of the majority of Europe’s peoples for a more democratic, less centralised and more transparent EU, where decisions for some 500 million people would not be taken by tiny numbers of people, in the European Commission, Council of Ministers and Court of Justice, bodies that  are irremoveable as collectivities and whose members are  safeguarded from intervention by the voters.
Ireland would thereby be forcing a return to the principles of the 2001 Laeken Declaration which recognised the democratic deficiencies  of the present EU,  before the process of reform was hijacked by the Euro-federalists who drew up the EU Constitution in an attempt to foist on us a European Union that would be profoundly more undemocratic and  less responsive to voters than the EU we have today.

What the Irish Government should now do on Lisbon

To meet the challenges facing Ireland in the EU following the Lisbon referendum therefore, the Irish Government should do the following:-

a)  Abide by the voters’ decision of last June in reality rather than in  pretence,  and inform the other EU States that Ireland will not be ratifying the Lisbon Treaty in its own interests and those of the EU as a whole;

b) Point out forcefully to its fellow EU governments that the rejection of the EU Constitution and the Federalist EU that it embodies by the peoples of France, the Netherlands and Ireland – and its likely rejection in several other countries if their peoples were allowed a vote on it – shows that Lisbon is a bad treaty for the EU as a whole, and that the EU leaders should therefore begin a process of consultation with their citizens on the kind of Europe their peoples really want, and that they should go back to the principles of the Laeken Declaration as a guide to this;
c) Point out to its EU fellow governments that the British Conservative Party is committed to putting Britain’s ratification of Lisbon “on ice” in the event of that party being elected to office before that Treaty is ratified, holding a UK-wide referendum on it and recommending a No vote to it, and  that it would therefore be prudent of the EU as a whole  to await the outcome of the UK general election, which is due in little over a year, before trying to foist an unwanted Lisbon Constitution on the peoples of the UK.   The Government should point out that such a referendum would also give our fellow-countrymen and women in Northern Ireland an opportunity to express their views on this hugely important treaty;

d)  Recommend to its fellow EU governments that it would be prudent also to await the outcome of the Czech Constitutional Court and Senate proceedings, and the Grauweiler constitutional challenge to Lisbon before the German Constitutional Court, before doing anything further in this matter;

e) If, as seems to be the case, there is now general consensus among the EU Prime Ministers and Presidents  that it is not politically practical,  under either Nice or Lisbon,  to  take away from each Member State  their right to have one of their nationals on the Commission, the  Government should propose that the most effective way of achieving  this while abiding by the provisions of the Nice Treaty, would be to have 26 instead of 27 Commissioners, with a place and voice on the Commission to be given to the High Representative for Foreign and Security Policy, instead of having a formal Commissioner from the country whose national holds this office.

2. Ireland’s future in the EU… Our influence within the European institutions

Ireland should remain a fully committed member of the present European Commmunity and European Union. At the same time the Government should  advocate a genuine democratic reform programme for the EU,  following debate and discussion with its own citizens and with other EU States, especially smaller ones, in the process of consulation suggested in Point (b) above.

Advance a programme of democratic reform of the EU

Such a process of genuine EU democratic reform could include, inter alia: (i) the election of Commissioners from each Member State, with the Commission’s  legislative programme being presented beforehand to National Parliaments each year; (ii) changing the Council of Ministers voting system so that European laws could be adopted only if at least three-quarters of  Member States covering at least half of the EU’s population were in favour; (iii) abandoning the idea of a special code of fundamental rights for EU citizens as distinct from national citizens and requiring the EU institutions to abide instead by the  European Convention of Human Rights; (iv) reducing drastically the burden of EU laws and repatriating appropriate law-making areas from Brussels to the Member States as envisaged in the Laeken Declaration.

Ireland’s influence in the EU institutions would be drastically reduced by the provision of the Lisbon Treaty which would take away from EU Member States the right to “propose” and decide who its national Commissioner was, and replace that by the right to make “suggestions” only for the incoming Commission President to decide.  Ireland’s influence would also be drastically reduced by the Treaty’s proposal to halve Ireland’s voting weight in EU law-making on the Council of Ministers from 2% to 0.8%, while Germany’s voting weight would simultaneously increase from 8% to 17%, France’s from 8% to 13% and Britain’s and Italy’s from 8% each to 12% each.

3. Enhancing the role of the Houses of the Oireachtas in EU affairs:

The flood of EC/EU legislation has these days become so great that two-thirds or more of all legal acts in EU Member States now emanate from Brussels. This means that national Parliamentary Scrutiny Committees can give an average of only a few minutes time, if that, to each European legal act. This means that most legal acts get little or no consideration  or discussion at National Parliament level, not to mind amongst the general public.   Important matters can go through without consideration or debate,  whose adverse social consequences only show themselves later when damage may be done.

This is outrageous from the democratic point of view and gives rise to public hostility and cynicism regarding the whole process of European law-making. The only remedy would seem to be to institute fundamental democratic reforms in the EC/EU which would reduce the  aforesaid flood of European laws.  That in turn would require an EU Reform Treaty that is very different in character from the miscalled “Lisbon Reform Treaty”. The comments on this matter by Dr Roman Herzog, former President of Germany and former President of the German Constitutional Court, are relevant:

” It is true that we are experiencing an ever greater, inappropriate centralisation of powers away from the Member States and towards the EU. The German Ministry of Justice has compared the legal acts adopted by the Federal Republic of Germany between 1998 and 2004 with those adopted by the European Union in the same period. Results: 84 percent come from Brussels, with only 16 percent coming originally from Berlin … Against the fundamental principle of the separation of powers, the essential European legislative functions lie with the members of the executive … The figures stated by the German Ministry of Justice make it quite clear. By far the large majority of legislation valid in Germany is adopted by the German Government in the Council of Ministers, and not by the German Parliament … And so the question arises whether Germany can still be referred to unconditionally as a parliamentary democracy at all, because the separation of powers as a fundamental constituting principle of the constitutional order in Germany has been cancelled out for large sections of the legislation applying to this country … The proposed draft Constitution does not contain the possibility of restoring individual competencies to the national level as a centralisation brake. Instead, it counts on the same one-way street as before, heading towards ever greater centralisation … Most people have a fundamentally positive attitude to European integration. But at the same time, they have an ever increasing feeling that something is going wrong, that an untransparent, complex, intricate, mammoth institution has evolved, divorced from the factual problems and national traditions, grabbing ever greater competencies and areas of power; that the democratic control mechanisms are failing: in brief, that it cannot go on like this.”
-    Former German President  Dr Roman Herzog and former president of the German Constitutional Court, article on the EU Constitution, Welt Am Sonntag, 14 January 2007

It is also desirable from the democratic standpoint that there should be national parliamentary input to the EU legislative process before Ministers go to Council of Ministers meetings in Brussels, so that they can be given guidance or even parliamentary policy mandates beforehand, at least on important matters. This would enable national parliamentarians to have some real input into the adoption of government policy-positions on EU matters before they come for decision on the Council of Ministers.  This is allowed for in the Danish EU Parliamentary Scrutiny Committee.  It is desirable in Ireland also, although Government Ministers and senior civil servants would very likely resist it.

4. Improving Irish public understanding of the EU:

Public understanding of the EU and issues relating to it would be significantly advanced if Euro-federalists and advocates of EU political union and fuller European integration generally, did not resort so readily to abuse and misrepresentation of people who wish to defend national democracy and national independence in face of the pressures from EU integration to reduce or abandon these.

One egregious and topical example of the kind of misrepresentation that is so common has been the attempt by supporters of the Lisbon Treaty to make out that the threat of conscription into a future EU army was a key theme in No-side propaganda during last June’s Lisbon referendum.
Mr Tony Brown and Foreign Minister Micheal Martin “spinning” tales about conscription to a post-Lisbon EU army.

The undersigned recalls that the first person to raise this scare was Mr Tony Brown in a letter to the Irish Times some months before the Lisbon referendum. In this letter Mr Brown condemned what he said were likely to be the exaggerations and false-claims of No-side people, as illustrated by their putting around this scare-story about conscription to an EU army in previous EU referendums.  I was actively involved in all of these referendums and have no recollection of this theme being pushed by No-side advocates at any time in the past. I can say with absolute certitude that it was not made an issue in the Lisbon Treaty  referendum by No-side campaigners either.

I was personally in touch with virtually all the No-side groups in the Lisbon referendum and saw most of the items of literature which they produced. None of them sought to make supposed conscription into an EU army an issue, nor do I recollect seeing any slogan or piece of No-side literature which made this particular point.

What did happen was that shortly before the referendum Foreign Minister Micheal Martin made a public statement on TV repeating Mr Tony Brown’s earlier statement about this obviously lurid  allegation being an example of alleged No-side untruths and misleading propaganda.  This immediately gave the statement metaphorical “legs”, as it were.  People who did not know anything about an EU army – which is in fact envisaged in the Lisbon Treaty, titled “a common defence”,  as distinct from “a mutual defence”, which is something the Treaty also envisages –  may have said to themselves: perhaps there is something in this notion of conscription after all if the  Foreign Minister is getting so hot and bothered  about it!

It was undoubtedly primarily Yes-side people who were responsible for this nonsense, not the much-maligned, much-misrepresented and much insulted No-side proponents, whose genuine concerns about the Lisbon Constitution have been so contemptuously dismissed by so many Yes-side spokesmen.  Many Yes-side spokesmen in Ireland have also done their best to create the impression abroad that Irish voters rejected the Lisbon Treaty because of fears about conscription to an EU army, which clearly were not in the treaty.  They have thereby sought  deliberately to misrepresent and denigrate the democratic vote of their fellow-countrymen.

The failure of the Referendum Commission to carry out its statutory duty

When it comes to advancing public understanding of the EU and EU Treaties, the Oireachtas Sub-Committee should also not ignore in its deliberations the failure amounting to  constitutional delinquency of the supposely independent Referendum Commission.

The statutory Referendum Commission was given over ¤5 million of public money to carry out its function under the 1998 Referendum Act of  explaining  to voters the significance of the constitutional amendment they were voting on and its text, yet it significantly failed to  do this,  for otherwise the No vote would almost certainly have been higher.

What the Referendum Commission did do was to summarise and regurgitate much of the contents of the highly tendentious booklet on the so-called “Lisbon Reform Treaty”  which was published by the Department of Foreign Affairs. This booklet purported to be a summary of the main provisions of Lisbon, but it completely failed to explain the significance of the constitutional amendment, why it was being proposed and why the Constitution had to be changed to permit Lisbon to come into force, and what the implications of adopting it would be.  Yet this is what the 1998 Referendum Act required the Referendum Commission to do.
Thus the Commission failed to explain to citizens the first two key sentences of the proposed Constitutional Amendment set out in the 28th Amendment of the Constitution Bill.   This made clear that the new European Union which would be established by the Lisbon Treaty would differ constitutionally in profoundly important ways from the present EU that is founded on the Maastricht Treaty.  The Referendum Commission failed even to mention in its publicity material that Lisbon would abolish the European Communities which Ireland joined in 1973 and which are explicitly mentioned in the Constitution, so that it would leave the Atomic Energy Community (EURATOM) as the sole European community in being.

It failed to inform citizens that Lisbon proposed to take away from Member States the right to decide who their national commissioner would be in the ten years out of every 15 when Lisbon provides that they may have a fellow-national on the Commission.  The Referendum Commission omitted many other key facts about the Treaty and the Constitutional  Amendment in its publicity material.  At the same time its chairman made two interventions in relation to disputed matters in the debate, something which had never been done by previous Commissions, in one of these interventions getting his facts clearly wrong.

The Referendum Commission, conflicts of interest and questionable tendering procedures

The Referendum Commission sought legal advice from solicitor firm A and L Goodbody, although this firm represented some Yes-side interests. It relied on Murray Consultants for printing and public relations, the contact person for whom appeared on the Commission’s press releases  and was a former press director of the Fianna Fail Party.
Although the Referendum Act provides that the Commission may engage such consultants and advisers as it sees fit, the tender for ¤3.5 million of marketing and advertising for the Lisbon campaign  was advertised three weeks before the  Referendum Commission itself was called into being. The request for tender stated that the tenders were to be submitted to the Department of Foreign Affairs, even though the holding of referendums and the establishment of the Referendum Commission is a matter for the Department of the Environment and Local Government. No explanation has been provided for the involvement of the Department of Foreign Affairs and no confirmation has been given that the choice of Murray Comsultants was that of the Referendum Commission itself and not the Department of Foreign Affairs. There are several other aspects of the Referendum Commission’s work during the Lisbon referendum which are disquieting from a democratic point of view. It is to be hoped that these will be thoroughly probed when the Commission makes its statutory report to the Oireachtas, as must be done by mid-December.

Ensuring that the Referendum Commission abides by its terms of reference and does a proper job in explaining the significance of the constitutional amendment to citizens is clearly fundamental to improving public understanding of the EU and its importance for Ireland’s future. Such understanding is never more important than when the people are being invited to change their Constitution to ensure the superiority of EU law or not.

Appended below is our preliminary submission made to the Oireachtas Sub-committee  on Ireland’s Future in the EU on 22 October 2008.

(Signed)

Anthony Coughlan
Secretary

Minister Dick Roche: “The People Have Spoken”

You may find of  interest the remarks below of Mr Dick Roche TD  when a backbencher in 2001  and before he was promoted to Minister for Europe, regarding the proposal to re-run the Nice referendum.

They provide a piquant contrast to some of his recent statements.

The voter turnout in the 2001 Nice referendum was 35%,  in contrast to the  majority turnout in the 12 June Lisbon referendum.

“THE IRISH PEOPLE HAVE SPOKEN.”

Mr Dick Roche TD on why it would be a “democratic affront” to re-run the Nice Treaty referendum without making changes to the Treaty… spoken when he was a Dail backbencher in 2001  and before he was made Minister for Europe

“It is foolhardy to talk about another referendum at this stage unless something fundamental changes. To attempt to rerun a referendum as a means of reversing the democratic decision taken by the people would be rightly regarded as an affront. Something fundamental will have to be changed in the Nice treaty before we can even contemplate putting it before the people again.”

- Dail Debates, Vol. 358, pp. 1058-1061, 21 June 2001)

_________

Below are some further excerpts from the same Dail speech of Mr Roche, backbencher)

_________

 

“So far as the Nice Treaty is concerned, the Irish people have spoken and, like it or lump it, the Commission and its President have to accept it. They should do so with more good grace than they have shown in the recent past?

The Nice Treaty, no matter what its good intentions, is a document that has been democratically tested in only one Member State, and that is Ireland. It failed to meet the democratic test in this nation. It is an arrogance for any politician, either here or any Commissioner in Europe, to ignore the fundamental fact that the Irish people have spoken with some clarity on the matter. Yet last night the President of the Commission suggested that somehow or other the Irish people’s will can be undone. If the Commission, its leaders or the Governments of other European states decide to sweep democracy aside, we must ask on what basis is the future of Europe to be built?

Over the past two days I attended a meeting of the interim European Security and Defence Assembly. I was amazed and gratified in equal measure at the response by European parliamentarians from 28 different European nations to the Irish referendum.  It was an interesting and extraordinary eye-opener. There was no finger-wagging or suggestion that our people had been wrong or were confused; rather there was a degree of admiration for the decision the Irish had made. Speakers from the United Kingdom to Slovenia to Greece spoke on the issue. They indicated their support for the right of the Irish people to make a decision on this matter. They were by no means all Euro-sceptics. Speakers from a number of countries both within and outside the Union indicated that the Irish people by its vote reflected a common view and concern that now exists both within the EU and in those states most proximate to the EU. Members from the EU states who contributed directly in the debate or who spoke privately to the Irish delegation members indicated that it was their view – I made an effort to do a straw poll  – that referenda on the Nice Treaty as it currently stands, if held in other member states, would meet with the same public response as in Ireland.

There is something distinctly odd about democratic states attempting to take decisions that are out of line with the sentiment of their citizens. The gulf that exists between the citizens of Europe and the institutions, the commissioners and the bureaucrats who are now driving the Union, is nowhere more visible than in the area of peace, security and defence. In the run-up to the Nice Treaty the European Council decided, quite incredibly, that somehow the European Union could now take charge of peace, security and defence issues across the continent of Europe both within and outside the Union?

The issues raised by the rejection of the Nice Treaty in the referendum are of a fundamental nature.  I have listened with some dismay to today’s debate and the debate that has taken place in the weeks since the referendum. Many in the political leadership of the nation are more focused on making a political point about the referendum than on truly addressing the core issues behind the judgement passed by the people?

It is foolhardy to talk about another referendum at this stage unless something fundamental changes. To attempt to rerun a referendum as a means of reversing the democratic decision taken by the people would be rightly regarded as an affront. Something fundamental will have to be changed in the Nice treaty before we can even contemplate putting it before the people again?
The Nice treaty is a complex document which intends to achieve complex things.  It was sold to the Irish people as a means of providing for the enlargement of the European  Union. Last night Mr Prodi made it very clear that was not what the treaty  is about. He did not, however, make clear precisely what it is about. He was saying, therefore, that the enlargement process could be achieved without the Nice treaty.

I mentioned the assembly I attended yesterday and the considerable interest shown in the decision of the Irish people.  Some thought-provoking contributors indicated that the opportunity afforded the Irish people should also be offered to the citizens of other member states. Maybe then Europe would get a clear message about what the people of Europe expect in the coming years.”

- Dick Roche, 2001

An Open Letter to Stephen Collins (Political editor, The Irish Times)

The National Platform EU Research and Information Centre
24 Crawford Avenue
Dublin 9

Tel.: 01-8305792
Web-site nationalplatform.org

Thursday 6 August 2008

Dear Stephen,
In your Irish Times article last Saturday you call on the Government to ratify the Lisbon Treaty regardless of the 12 June referendum result.

It is strange that a political correspondent of a major national newspaper should seek to become a partisan player in the political game in this way.

Stranger still that you should be urging such a profoundly unconstitutional and undemocratic course on our political leaders.

You are mistaken if you think that Ireland can ratify the Lisbon Treaty by Oireachtas vote without a referendum.

The Lisbon Treaty, which is the EU Constitution revamped,  establishes a constitutionally new European Union, with its own legal personality for the first time, which is legally different from the present European Union that was established by the Treaty of Maastricht and which is referred to in Article 29.4  of the Irish Constitution.

The first sentence of the  Constitutional Amendment which the people rejected on 12 June proposed to replace the present Maastricht-based EU by a future Federal-style Lisbon-based EU, of which we would all be made real rather than symbolical citizens for the first time.

The same name,  “European Union”,  would be used post-Lisbon as pre-Lisbon, but the constitutional and political character of the Union, its Member States and of us as Irish citizens would be transformed fundamentally by the ratification of the Lisbon Treaty.

No Oireachtas vote is constitutionally capable of doing this.  With all due respect to you, it is irresponsible to be speading illusions otherwise.

The  Lisbon Treaty would also abolish the European Communities other than the Atomic Energy Community which we joined in 1973, and would  replace the Treaties on which they are based and  which are explicitly referred to in the Irish Constitution.  These references would have to be deleted also to enable the State to ratify Lisbon. No Oireachtas vote can do that either.

And there are several other reasons why the Constitution would have to  be amended to enable the Lisbon Treaty to be ratified.

Your article proposes an  attempt to get around the constitutional  requirement, laid down in the 1986-7 Crotty judgement of the Supreme Court, that surrenders of sovereignty to Brussels in European Treaties can only be done by the Irish people in a referendum, for they are the repositories of sovereignty.

I was myself intimately involved in the Crotty case and attended every day of the three hearings of the case: the original Injunction action before Judge Donal Barrington, the High Court stage which Raymond Crotty lost, and the Supreme Court stage which he won.

You may be interested to know that it was quite a close-run thing that Crotty did not win his court challenge to the constitutionality of the ratification procedure of the Single European Act on the ground that that Treaty’s central provisions entailed a transfer of sovereignty to Brussels, but on the narrower ground that the requirement to coordinate  foreign policy under “European Political Cooperation” entailed such a transfer.

The late Judge Henchy was the swing judge on this point in the five-man court.

Crotty’s lawyers were reliably informed at the time by sources close to the judges that Judge Henchy was anxious to find for Crotty, but that if he did so in relation to the core elements of the Single European Act which had previously been approved by Oireachtas vote, he would effectively have been finding the country’s President at the time, the late Patrick Hillery, as having failed to refer a constitutionally dubious Bill purporting to ratify the S.E.A. to the Supreme Court for assessment of its constitutionality.

Judge Henchy wanted to avoid embarrassing the President, so he approved the main provisions of the S.E.A. as having been covered by the original “license”  for Ireland to join a developing European Community, but he joined with the majority of the court in striking down the foreign policy provisions, which did not require Oireachtas approval, as being unconstitutional.

So the Crotty judgement was a highly political one amongst the five Supreme Court judges themselves!  These facts are not widely known, but I assure you they are correct.
It follows therefore that one cannot assume that the transfers of sovereignty entailed by the Lisbon Treaty would be similarly indulged by the present Supreme Court if the matter should come before it, as you implicitly propose in your article.

Judge Henchy moreover made quite clear in his own judgement in the Crotty case that if the then European Community were to move towards becoming a Political Union, a constitutional  referendum would be required here to permit that.  The European Union that would be established by the Lisbon Treaty –  which is the 2004 EU Constitution revamped –  is undoubtedly such a Political Union.

In your article you insult the No-side campaigners by saying that they were “unhampered by any allegiance to the truth”.

Truly this is the pot calling the kettle black!
I do not recollect you or your fellow Yes-side commentators alerting people during the referendum to the hugely important fact that the post-Lisbon EU would be constitutionally and politically profoundly different from the pre-Lisbon EU. . .

Or to the fact that we would be made real  citizens for the first time of this post-Lisbon EU, owing obedience to its laws and loyalty to its authority over and above our citizens’ duty to the Irish Constitution and laws. . .

Or to the fact that in the post-Lisbon EU the Irish Government would lose the right it has at present to decide who its national Commissioner would be when we have a member on the Commission, and that this would be replaced by a right to make “suggestions” only for the incoming Commission President to decide –  so replacing the present bottom-up process for appointing the Brussels Commission by a top-down one post-Lisbon . . .
Or to the fact that Lisbon proposes to restore the death penalty in Europe for the EU as a corporate entity in time of war or imminent threat of war, by providing that the post-Lisbon EU would accede to Protocol 6 of the European Convention on Human Rights, which permits the use of the death penalty in such circumstances, rather than  to Protocol 13, which abolishes the death penalty at all times and which the individual Member States have separately acceded to.

This matter has caused national outrage in Austria and some controversy  in Germany, but scarcely anyone has heard about it here in Ireland.

But maybe you would dismiss that too as just another No-side “untruth”?

Yours etc.

Anthony Coughlan
Secretary

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