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

[24/08/2005] Euro bank: secretive & sloppy

"SECRETIVE AND SLOPPY" EURO BANK ATTACKED

By Ambrose Evans-Pritchard, Daily Telegraph,23 August 2005

The European Central Bank has been accused of secrecy, ineptitude, and
sloppy use of inflation targeting by one of Britain's leading monetary
experts.

Prof Charles Goodhart, a former member of the Bank of England's monetary
policy committee, said the ECB's claim to manage inflation over the "medium
term" was an empty mantra that let it dodge responsibility for failures.

In an open letter to ECB president Jean-Claude Trichet, published in the
journal, Central Banking, he slammed the "conscious refusal" to be more
precise.

"Is the medium term two years, three years, five years, n years, or what? By
refusing to define the term, you can never be accused of missing your
target. [It] is just an exercise in obfuscation," he said.

He counselled Mr Trichet to have a good night's sleep before handling the
press following key decisions - given past gaffes.

"A meeting of the governing council is likely to be tense, often lengthy,
and almost always extremely fatiguing. You will face the world's media at a
time when you are worn out and stressed. I think it fair to claim that your
predecessor suffered many of his most unhappy occasions at exactly such
press conferences," he said.

Mr Goodhart, emeritus professor at the London School of Economics, said the
ECB should air its internal policy disputes by publishing the minutes rather
than relying on secrecy to give a false sense of unity.

"It is hardly desirable, nor does it lead ultimately to credibility, to
suggest that consensus existed when, in practice, it did not," he said.

An ECB spokesman said secrecy was needed to shield the governors from
national pressure. "Some could be in a hard position in their home countries
if it was known how they argued at meetings," he said. Mr Trichet is
expected to address the criticisms at a press conference on September 1.

The letter was part of a The Euro at Risk series published in the latest
edition of Central Banking.

An article by Henrik Enderlein, a professor at Berlin's Free University,
said the euro's one-size-fits-all monetary regime had blighted Germany from
the outset.

"Germany is the biggest economy in EMU and, as is now becoming obvious, has
suffered most from the current EMU set-up," he said.

Prof Enderlein said interest rates had been 11.2pc too high for German needs
on average since 1999, reaching a peak distortion of 31.2 in early 2001.

He doubted whether structural reform in Germany could be successful until
monetary policy comes to the rescue. "Ultimately, there could be a risk that
EMU splits into two equally-sized groups of countries, one with high growth
and high inflation, the other with low growth and low inflation," he said.

While monetary policy was likely to be wrong for all states, those like
Germany with very low inflation (or high real interest rates) could be
trapped in a "bust cycle".

He said the only solution is for the ECB to drop its one-size-fits all
policy and instead set rates for a homogenous core built around Germany.
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