Tackling the EU Empire: basic critical facts on EU/Eurozone – a handbook for European Democrats

TACKLING THE EU EMPIRE    

Basic critical facts on the EU/Eurozone

handbook for Europe’s democrats, whether politically Left, Right or Centre                

“Sometimes I like to compare the EU as a creation to the organization of empire. We have the dimension of empire.”   –  EU Commission President Jose Manuel Barroso, 2007

Readers are invited to use or adapt this document in whole or in part for their own purposes, including changing its title if desired, and to circulate it to others without any need of reference to or acknowledgement of its source.

Contents

  • The EU’s myth of origin
  • EU ideology: supranationalism v. internationalism
  • A spin-off of the Cold War
  • The euro as a response to German reunification
  • The intoxication of Big Powerdom
  • EU expansion from six to 28; “Brexit”
  • The economic basis of the EU
  • The succession of EU treaties: the 1957 Treaty ofRome
  • The 1987 Single European Act (SEA)
  • The 1992 Maastricht Treaty on European Union
  • The 1998 Amsterdam Treaty
  • The 2001 Nice Treaty
  • The 2009 Lisbon Treaty: the EU’s Constitution
  • EU Powers and National Powers
  • The “doctrine of the occupied field”; Subsidiarity
  • More voting power for the Big States under the Lisbon Treaty
  • How the EU is run: the Brussels Commission
  • The Council of Ministers
  • The European Council
  • The European Parliament
  • The Court of Justice (ECJ) as a Constitution-maker
  • The EU Charter of Fundamental Rights
  • The extent of EU laws
  • Is Another Europe, a Social Europe, possible?
  • How the EU is financed
  • Why national politicians surrender powers to the EU
  • The EU’s assault on national democracy
  • EU Justice, “Home Affairs” and Crime; Migration, Schengen
  • The Common Foreign and Security policy: EU militarization
  • The euro: from EU to Eurozone federalism
  • The euro, the bank crisis and the sovereign debt crisis
  • Two treaties for the Eurozone: The Fiscal Compact and the ESM Treaty
  • No European people or demos to provide a basis for an EU democracy
  • How the Eurozone prevents the “PIIGS” countries overcoming the economic crisis
  • The benefits of restoring national currencies
  • Contrast Iceland
  • Tackling the EU Leviathan
  • Democrats on Centre, Left and Right for national independence and democracy
  • Conclusion: Europe’s Future
  • Ireland’s EU membership
  • Abolishing the punt and adopting the euro
  • Ireland’s experience of an independent currency 1993-1999
  • The 2008 bank guarantee and the 2010 Eurozone bailout
  • Reestablishing an independent Irish currency
  • Some political consequences of Ireland’s EU membership
  • An independent democratic future
  • Useful sources of information on the EU
  • Reference Notes
  • An invitation

 

THE EU’S MYTH OF ORIGIN:  All States and aspiring States have their “myth of origin” – that is, a story, true or false, of how they came into being. The myth of origin of the European Union is that it is essentially a peace project to prevent wars between Germany and France, as if a collective tendency to go to war were somehow genetically inherited.  In reality the EU’s origins lie in war preparations – at the start of the Cold War which followed the end of World War 2 and the possibility of that developing into a “hot war”, a real military conflict between the two victorious post-war superpowers, the USA and USSR.

Tuilleadh

Is another EU really possible? How realistic is a “Social Europe”? (Prof Danny Nicol) #brexit

The article below, dated 29 February,  was written by Professor Danny Nicol, Professor of Public Law at the University of Westminster 

IS ANOTHER EUROPE POSSIBLE?

by Professor Danny Nicol

Is the European Union an empty vessel into which any political content may be poured? Can it accommodate not just neoliberal conservatism but also Keynesian social democracy, hard-line greenery and even pro-nationalisation democratic socialism?  
A new UK campaign, “Another
Europe is Possible”, would have us believe this, and is touting for votes in the EU referendum on the basis that the Union can be changed into a more socialistic entity, “not [by] a network of politicians but grassroots
activists across the UK”. 

The same optimism is apparent in the Democracy in Europe Movement 2025 (DiEM 2025) in which Mr Yanis Varoufakis looms
large. With the ferocity of tigers protecting their young, these
progressives attack those who single out the EU as a hotbed of
neoliberalism. ‘Can you name an institution not dominated by
neoliberalism?’ argued Marina Prentoulis of Syriza UK at the launch of “Another Europe”: ‘National governments are pushing a neoliberal agenda
too’.

It speaks volumes that Syriza, a party implementing austerity at the EU’s behest, is accorded star billing in this supposedly anti-neoliberal venture.

What is the point of the 1916 commemorations?

One value of the 1916 Rising commemorations is to highlight the contrast between the aspirations of those who set out to establish an independent Irish State for the island of Ireland and the reality of what exists here today –  a partitioned country whose native language, Irish,  is on the verge of death as a cradle-spoken tongue, and in which  the  State that did come from the independence movement has been reduced to provincial or regional status in a supranational EU quasi-Federation that now makes most of Ireland’s laws. 

The Easter Proclamation read: “We declare the right of the people of Ireland to the ownership of Ireland and to the unfettered control of Irish destinies to be sovereign and indefeasible.” 

“Indefeasible” means  cannot be lost.  That right may notionally exist still,  but the reality of a sovereign State in which its own Parliament and Government are the sole source of the laws prevailing in its territory has clearly been lost through Irish membership of the EU – as indeed has happened with the 27 other EU States. 

Growing public awareness of this fact, in Ireland and other EU countries, is at the root of the current EU discontents.  

Article 29.4 of the Constitution, which was inserted by  referendum in 1972 to enable Ireland to join the then European Economic Community (EEC),  gives European law primacy over any countervailing Irish law. It reads: “No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State that are necessitated by the obligations of membership of the European Union, or prevents laws enacted, acts done or measures adopted by the said Europen Union from having the force of law in the State.” 

Realisation of the implications of supranational EU law being given primacy by this amendment over the provisions of the 1937 Irish Constitution that he had personally drafted led then President Eamon De Valera to say rather poignantly to his family on New Year’s Eve 1972, the day before this change took place: “I am the first and last President of an independent Irish Republic.” So Eamon O Cuiv TD, De Valera’s grandson, who was present on that occasion, told me. 

The loss of sovereignty has gone much further since. 

In 1999 Ireland abolished its national currency and joined the Eurozone, thereby abandoning control of  either  its rate of interest or its exchange rate – the former essential for controlling credit, the latter for influencing economic competitiveness. 

EU Commission President Romano Prodi underlined the political significance of this step when he said at the time, “The two pillars of the Nation State are the sword and the currency, and we have changed that.”

The 1987 Single European Act treaty, the 1992 Maastricht Treaty, the 1998 Amsterdam Treaty and the 2001 Nice Treaty saw further growth of EU powers and simultaneous diminution of national State powers. Ratification in each case  required constitutional referendums in Ireland.

The transfer of national legislative, executive and judicial powers to the EU institutions culminated in the Treaty of Lisbon. When Irish voters rejected ratification of that treaty in 2008, they were made vote on exactly the same treaty the year after to obtain a different result. 

In the Lisbon Two referendum the constitutional amendment permitting Lisbon’s ratification differed from that in Lisbon One in that it included the sentence: “Ireland affirms its commitment to the European Union…” 

This was one State affirming a constitutional “commitment” to another group of States – surely a remarkable development? Yet the Explanatory Handbook which the statutory Referendum Commission sent to all voter households at the time to inform them what Lisbon was about, did not refer to this change. Neither, so far as I know, did anyone in the Irish media.    

The Lisbon Treaty replaced the existing European Community with  a European Union which had full legal personality and its own Constitution for the first time. It  made citizens of the different Member States into real citizens of this new federal-type Union for the first time also. 

One can only be a citizen of a State.  Before Lisbon, citizenship of the then embryonic EU was stated to “complement”national citizenship. It was an essentially notional or honorary concept. The Lisbon Treaty (Art.20 TFEU) provided that EU citizenship should be “in addition to” one’s national citizenship, just as citizens of provincial states like California, Massachusetts, Bavaria or Brandenburg have two citizenships, for they are citizens also of their respective Federal States, the USA and Germany.

Lisbon also gave explicit primacy to EU law over national law for the first time in a treaty.  In most years the majority of laws that are put through the national Parliaments of the EU Member States now come from Brussels, although most people do not realise this. 

Eur-Lex estimates that there are currently some 134,000 EU rules, international agreements and legal acts binding on or affecting citizens across the EU. These include 1842 EU Directives, 11,547 Regulations, 18,545 Decisions, 15,023 EU Court verdicts and 62,397 international standards which the EU has signed up to and which are therefore binding on all its members.  If a Member States does not obey any one of these, the EU Court of Justice can impose heavy daily fines to enforce compliance. 

The EU Treaties prevent voters at national level, their parliaments and governments from amending or abolishing a single one of these laws or rules. Any move entailing changes to the Treaties requires the unanimous agreement of the governments of all 28 Member States. Any change to these other rules requires either unanimity or a qualified majority vote. 

This is the practical problem facing those who contend that “another Europe is possible” by reforming the EU at supranational level in the hope of making it more democratic, or who think that the EU can be transformed into a so-called “Social Europe”.   

The EU Treaties effectively shift power away from citizen voters in all EU countries and from small and middle-sized Member States to the larger ones and to the unelected Brussels Commission. 

The post-Lisbon EU now has its own government with a legislative, executive and judicial arm, its own political President (Poland’s Donald Tusk), its own citizens and citizenship, its own human and civil rights code, its own currency, economic policy and revenue, its own international treaty-making powers, foreign policy, foreign minister (High Representative), diplomatic corps and UN voice, its own crime and justice code and public prosecutor’s office. It already possesses such State symbols as its own flag, anthem, motto and annual official holiday, Europe Day, 9 May.  

As regards the “State authority” of the post-Lisbon Union, this is embodied in the EU’s own executive, legislative and judicial institutions: the European Council, Council of Ministers, Commission, Parliament and Court of Justice.  It is embodied also in the Member States and their authorities as they implement and apply EU law and interpret and apply national law in conformity with Union law.  This they are constitutionally required to do under the Lisbon Treaty, just as in any Federation. 

Thus EU “State authorities” as represented by EU soldiers and policemen patrolling Europe’s streets in EU uniforms, are not needed as such. Their absence makes it all the easier to hide from ordinary citizens the reality of Europe’s hollowed-out nation States and the failure of their own mainstream politicians to defend their national democracies.

Whatever this is, and whether one thinks it is a good thing or not, it is certainly not “the unfettered control of Irish destinies” which the men and women of 1916 fought and died for. 

“Nationalism before socialism” – @VillageMagIRE

Two Steps to a Fiscal Union for the Eurozone… & A Third Step to Distract Attention from the First Two

The Urgent Need at a Minimum For a Government White Paper

“It would be tragic and fatal if we were to lose democracy on the road to saving the euro”

– Dr Andreas Vosskuhle, President of the German Constitutional Court, 2011

“There are 27 of us. Clearly, down the line, we will have to include the Balkans. There will be 32, 33 or 34 of us. No one thinks that federalism, total integration, will be possible with 33, 34, or 35 States. Clearly there will be a two-speed Europe: one speed that moves towards a Federation for the Eurozone and one speed for a Confederation within the European Union.”

– French President Sarkozy, 8 Nov. 2011

BACKGROUND:

The Economic and Monetary Union which Ireland signed up to under the 1992 Maastricht and 2009 Lisbon Treaties assumed that the 3% and 60% of GDP deficit rules for every Eurozone State would be abided by and enforced by means of the sanctions – warnings, special deposits, fines etc. – which are set out in those treaties.  If they had been and if the rules of the EU treaties had been enforced for all, there would have been no sovereign debt crisis in the Eurozone and no need for any Eurozone bailout fund, either temporary or permanent.

When Germany and France broke the rules of the EMU by running big government deficits in 2003, the EU treaty sanctions to enforce the 3% and 60% deficit rules were not applied against them, and they were thereafter effectively dropped for everyone else. Ireland did not break these excessive deficit rules however.

Now – to deal with the dire consequences for millions of people of this failure to enforce the rules of the original EMU, while at the same time increasing their own political sway over the Eurozone –  Germany and France, supported by the Brussels Commission, are seeking to change the whole basis of the Economic and Monetary Union which Ireland signed up to. They are doing this by establishing a permanent  €500 billion ESM bailout fund which is to be surrounded by a whole panoply of controls over national budgetary policy, including the permanent balanced budget rule (0.5% deficit rule) proposed in the “Fiscal Compact Treaty” that German Chancellor Merkel insisted on over Christmas.

In considering the possible implications of all this it is worth bearing in mind that in 2014, just two years time, under the Lisbon Treaty Germany’s vote in making EU laws will double from its present 8% of total Council votes to 16%, while France’s and Italy’s vote will go from their present 8% each to 12% each, and Ireland’s vote will halve to 1%. Similar proportional changes will be made in voting within the Eurozone.

The temporary Eurozone bailout fund, the European Stability Facility (EFSF), which was established to lend money to Greece in May 2010, and from which Portugal and Ireland subsequently got bailouts, was established under Art.122 TFEU of the EU Treaties. This Article permits Union financial assistance to be granted when a Member State is in “severe difficulties caused by natural disasters or exceptional occurrences beyond its control”. Excessive budget deficits built up over long periods of time are scarcely what this Article was meant to cover, so the very questionable legal basis, to say the least, of the temporary fund has led to this Article being now abandoned and replaced by an entirely new EU Treaty provision, an amendment to Article 136 TFEU, to give a long-term legal basis in European law to the permanent €500 billion bailout fund which the Eurozone States want to set up from this July. Ireland commits itself to making an €11 billion contribution to this fund in various forms of capital by means of the European Stability Mechanism (ESM) Treaty which can be concluded amongst the 17 Eurozone countries once the EU 27 have amended Art.136 TFEU so as to give permission for it in European law.

The Government wants the Dáil and Seanad to approve this hugely important Article 136 TFEU amendment to the EU treaties during the current Dail term without any referendum of the Irish people even though this amendment and its legal/political consequences would mark a qualitative change in the direction of the EU and in the character, scope and objectives of the Economic and Monetary Union which the Irish people signed up to when they approved by referendum the 1992 Maastricht and the 2009 Lisbon Treaties. The amendment to Article 136 would extend the scope of the existing EU treaties significantly and bears a huge weight of legal/political consequences. It reads: “The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality.”

Approval or non-approval by Ireland of the authorization by the 27 EU States of this permanent bailout fund for the Eurozone is the only thing on which the State still has a veto – unless the Dáil and Seanad throw that veto away by failing to insist on it being used. That is why the media and opinion-formers should urge the Government to exercise it. If the Government is too afraid of the wrath of “Merkozy” and the Brussels Commission to do that, our media and public opinion should call on some public-spirited party or individual to challenge that failure before the Courts.

For if a referendum on approval of the European Council Decision to adopt the Art.136 EU amendment were found to be constitutionally necessary in Ireland, it would put the State in a powerful position to exact major concessions on the national debt, on the Anglo-Irish promissory notes and on the terms of the Troika’s Memorandum of Understanding in order to persuade Irish voters to agree by referendum to the Art.136 amendment of the EU Treaties permitting a permanent Eurozone bailout fund to be established. Why should the Government throw away Ireland’s best bargaining card in this way? Why should it be afraid to take the only course which offers hope of rapid radical relief to the people’s current dire straits?

Such a constitutional challenge, if it were to be taken, would need to show that the Article 136 TFEU amendment to the EU Treaties is a claim to, and an assertion of, a significant extension of EU powers, scope and competences which cannot legally be brought into force in Ireland by the “simplifed” EU treaty revision procedure of Art.48(6) TEU that was used to adopt the amendment,  whatever may be the constitutional position in the other EU States … And that therefore approving it in Ireland requires prior permission from voters in a referendum, as a significant surrender of Irish State sovereignty would be involved.  

It is not just issues of EU law that are at stake here. It is widely recognised among economists that the proposed ESM Treaty and the permanent funding mechanism it would establish for the Eurozone, with their accompanying apparatus of controls of national budgets, go nowhere near to solving the current financial crisis of the euro area. A challenge to the constitutionality of the Government’s proposed mode of approval of the Art.136 TFEU amendment would open a valuable opportunity for the adoption by the Eurozone Member States of a more rational and effective scheme for dealing with the area’s financial crisis, with more emphasis on stimulating economic growth and demand across the area, to the benefit of the common good of Ireland and the other Eurozone countries.

STEP 1 TO THE NEW EMU:



The  27-MEMBER EUROPEAN COUNCIL “DECISION” TO MAKE THE ART.136 TFEU AMENDMENT TO THE EU TREATIES

This “Decision” of the European Council of 27 Prime Ministers and Presidents was made in March 2011 (Decision 2011/199/EU) and gives permission under EU law to the 17 Eurozone Member States to set up a permanent bailout fund for the Eurozone.  Ireland has a veto on this Decision, for before it can come into force it must be approved by all 27 EU Member States “in accordance with their respective constitutional requirements”. This means that in Ireland the European Council “Decision” to make this Art.136 amendment requires approval either by the Oireachtas or by the people in a referendum. It calls for the latter if the amendment – despite the implicit claim of those deciding on it that it does not extend EU powers – does in fact extend them, and does in effect entail a surrender of State sovereignty which goes beyond the original “license” which the Irish people gave the State in earlier referendums to join a “developing” European Community/Union.

In other words, approving the “Decision” of the European Council to amend the EU Treaties requires a referendum in Ireland if it can be shown to widen the scope and objectives of the present EU treaties by significantly increasing the powers of the EU. Under the so-called “self-amending” Article 48(6) TEU which was inserted in the EU treaties by the Treaty of Lisbon, the 27-Member European Council of Prime Ministers and Presidents can take decisions to amend most provisions in the policy areas of the EU treaties as long as such amendment does not increase the Union’s powers/competences. For the European Council to purport to authorise under EU law the setting up of a permanent bail-out fund for a sub-group of EU States can arguably be said to be a significant claim to, and assertion of, increased powers for the EU as a whole, as up to now the EU treaties provided for no such fund or mechanism in the Monetary Union either directly or indirectly. The treaties provided rather for an EU Monetary Union which would not require or permit cross-national “bailouts” under any circumstances and would be run on quite different principles to what is being now proposed.

If the Eurozone can set up a Stability Mechanism “intergovernmentally” amongst its 17 Member States, why is any amendment to the EU Treaties by the 27 to permit that needed? It seems plausible to contend therefore that this Art.136 TFEU amendment would put the Economic and Monetary Union which Ireland signed up to when the people ratified the Maastricht and Lisbon Treaties on a quite new and different basis. This new basis would entail a significant move towards a Fiscal Union for the 17 Eurozone States in addition to the Monetary Union, as well as an Irish commitment to a panoply of accompanying supranational controls over national budgetary policy. Therefore it arguably would be unconstitutional for the Oireachtas to attempt to give the necessary approval of such a European Council Decision without an Irish referendum.



STEP 2 TO THE NEW EMU:



THE EUROPEAN STABILITY MECHANISM TREATY (ESM) BETWEEN THE 17 EUROZONE STATES

The European Stability Mechanism Treaty sets up the European Stability Mechanism, an entity with legal personality of which Ireland would become a member. It sets out the institutional structure and rights and privileges of this “ Mechanism”. The Mechanism will include a permanent €500 billion bailout fund and the treaty stipulates the contributions which each of the 17 Eurozone Members must make to it in accordance with a “contribution key” annexed to it. The ESM Treaty provides that the fund may be increased later by agreement and there is already talk of increasing it. Ireland must contribute €11 billion to it “irrevocably and unconditionally” in various forms of capital.  The ESM Treaty was signed by EU ambassadors on 2 February 2012 – replacing an earlier ESM Treaty which was signed by Minister Michael Noonan and other Eurozone Finance Ministers in July last year but which was never sent around for ratification. The 17 Eurozone States have agreed that this ESM Treaty No.2 will be ratified so that it can to come into force by July this year. The Government has in mind to bring it before the Oireachtas for approval in this session, so it is likely to be introduced to the Dáil on Tuesday or Wednesday of next week.

A Dáil motion to approve the ratification of the ESM Treaty for the 17 will presumably be taken at the same time as the motion to approve the “Decision” of the European Council of 27 Prime Ministers and Presidents to insert the Art.136 amendment into the EU Treaties by means of the  “simplified” amendment procedure of Art.48(6) TEU.   There will presumably also be an accompanying European Communities Amendment Bill to implement the Art.136 TFEU amendment and the provisions of the consequential ESM Treaty in Irish domestic law.

The ESM Treaty is to come into force once it is ratified by signatories representing 90% of the initial capital of the fund, so that Ireland has no veto on it.

The preamble to the ESM Treaty states (Recital 5) that it is agreed that money from the permanent ESM fund will only be given to Eurozone States which have ratified the later “Fiscal Compact Treaty” and its permanent balanced budget rule or “debt brake” and that the two treaties are complementary.

In 2011 Attorney-General, Mr Paul Gallagher SC advised the then Fianna Fail Government that there would be no constitutional problem in Ireland with the European Council “Decision” to make the Article 136 TFEU amendment to the EU treaties because, he advised, authorizing a sub-group of 17 Eurozone States to set up a permanent bailout fund for the Euro area does not extend the competences of the EU. Mr Gallagher had previously advised Messrs Cowen and Lenihan on the night of the September 2008 blanket guarantee for the Irish banks. He also advised that the ESM Treaty for the Eurozone which would be authorized by the Art.136 TFEU amendment to the EU treaties would not raise constitutional problems here either. That advice was given however in relation to ESM Treaty No. 1 which was later signed by Finance Minister Michael Noonan and the other Eurozone Finance Ministers but was never sent around for ratification. Mr Gallagher was not dealing with the agreement amongst the Eurozone States in ESM Treaty No. 2 that any money from the permanent bailout fund when that was set up would only be given to States which had inserted a ”debt brake” into their national Constitutions or the equivalent under the provisions of the Fiscal Compact Treaty, for Chancellor Mertkel had not yet even mooted that.

It is desirable that the advice of Attorney-General Máire Whelan SC on the constitutionality of the Art.136 TFEU amendment to the EU treaties and the ESM Treaty No.2 which follows from that, should be made available to the public, preferably through the medium of a Government White Paper.

[N.B. It is unusual for an EU-related treaty to be signed by anyone other than EU Prime Ministers and Presidents. In the case of the ESM Treaty (No. 2) it was signed by Eurozone ambassadors to the EU on 2 February 2012. Was this meant to minimize public attention to its signing?]

A THIRD STEP THAT HAS DISTRACTED ATTENTION IN IRELAND FROM THE FIRST TWO…

THE “FISCAL COMPACT TREATY” (TREATY ON STABILITY, COORDINATION AND GOVERNANCE IN THE ECONOMIC AND MONETARY UNION)

The Fiscal Compact Treaty, properly titled the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (TSCG), was insisted on by German Chancellor Angela Merkel over winter 2011, essentially as a gesture towards German public opinion. When the Deutschmark was being abolished in 1999 the German people were not told that they would be committed to an EU Monetary Union with a huge permanent bailout fund to which they would be expected to be the principal net contributors. Rather they were told instead that the “no-bailout clause” of the EU treaties, Art.125 TFEU, guaranteed that there would be no bailouts by the others for any Member State using the single currency which did not abide by the excessive deficit rules. Germans are naturally indignant at the radical change in the EMU that is now being proposed. Chancellor Merkel’s insistence on a permanent balance budget provision /”debt brake” being inserted into national Constitutions by means of the Fiscal Compact Treaty, as was done in Germany two years ago, is meant to reassure her voting public that in budgetary matters the other 16 Member States of the Eurozone, including Ireland, will henceforth behave like Germans! Yet most economists regard a permanent balanced budget rule as absurdly inflexible, for Governments do need to run deficits on occasion in order to stimulate their economies and expand economic demand when that slumps heavily in their domestic or foreign markets.

Approving the European Council Decision to insert the Art.136 amendment into the EU treaties, ratifying the subsequent ESM Treaty with its strict budgetary rules in early March and ratifying what is stated to be the “complementary” Fiscal Compact Treaty towards the end of this year will have the effect of removing virtually the whole area of budgetary policy from the national to the supranational level of the Eurozone – without a referendum in Ireland or even a Government White Paper on the implications of that. It should be noted that the additional wording of Art.136, which is being asked to carry a heavy burden of subsequent changes, does not amend or even refer to the “no bailout clause” of Art.125 TFEU.

These developments would remove much of the stuff of national decision-making and normal party politics from the arena of democratic consideration and debate in this country.

The provisions of the Fiscal Compact Treaty were agreed at the EU summit on 30 January but they will not be put into proper treaty form and signed  by the 17 Eurozone States until March – probably at the EU/Eurozone summit meeting on next Friday. They need not be ratified until the end of this year. This treaty provides for a permanent balanced budget rule or “debt brake” of 0.5% of GDP in any one year to be inserted in Eurozone national Constitutions or the equivalent.  All 17 Eurozone States must ratify this treaty, but it comes into force once it is ratified by 12 of them, so that Ireland does not have a veto on it.

The preamble to the Fiscal Compact Treaty refers to the fact that money from the new permanent bailout fund (the ESM fund) will only be given to States which have ratified it. As treaties for the 17-Member Eurozone, both the ESM Treaty and the Fiscal Compact Treaty derive from the 27-Member amendment to the EU Treaties referred to in Step 1 above. Most of the provisions of the Fiscal Compact Treaty overlap with the so-called “Six Pack” of EU regulations and a directive which constitutes the “Reinforced Stability and Growth Pact”, and which were put into EU law last December.



It is important to note that the European Stability Mechanism Treaty and the Fiscal Compact Treaty are not EU treaties binding in EU law, but are rather “intergovernmental treaties” amongst the 17 Member States of the Eurozone, although they provide for the full involvement of the EU Commission and the European Court of Justice in their day-to-day implementation. 



The Government has invited public submissions on this Fiscal Compact Treaty to be made to an Oireachtas Committee over the coming months, which is a most unusual development. Presumably this is meant to distract media and public attention from the implications of approving the Art.136 amendment to the EU Treaties, on which Ireland has a veto, without a referendum, and ratifying the ESM Treaty which derives from that. 

These are clear moves towards a fiscal union for the Eurozone, and the Oireachtas is being invited to approve them in the next couple of weeks without any significant public discussion, at least to judge by the virtual total silence on them to date. At a minimum the Irish public deserves a White Paper on these hugely important developments before Ireland’s last EU veto of significance is abandoned and it becomes too late to save further large areas of our national democracy.



Issued for public information by the
National Platform EU Research and Information Centre

February 27, 2012
janthonycoughlan at gmail dot com
24 Crawford Ave. Dublin 9 01-8305792
First published online @ http://www.indymedia.ie/article/101440

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Anthony Coughlan Director The National Platform EU Research and Information Centre

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