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

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

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

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

Irish Times editorial, Saturday 16 July 2011

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

Irish Independent editorial, Saturday 23 July 2011

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

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

COMMENT ON THE ABOVE by Anthony Coughlan

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

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

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

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

Citizens’ Demonstration outside the Dáil on Monday, “Europe Day”, 9 May, from 12.30 to 2:00, against the farce within

JOIN THE DEMONSTRATION  AGAINST THE  “EU RE-DEDICATION RITES” OUTSIDE THE DÁIL,  MONDAY  9 MAY, FROM 12.30 TO 2:00PM

Ireland’s Euro-fanatics and ultra-Europhiles are getting panicky.

As the European Central Bank turns us all into indentured debt peons for a generation and France and Germany plan assaults on our 12.5% company tax rate, they fear that Ireland’s long love-affair with the EU may be coming to an end.

Hence the ceremony of re-dedication planned for the Dáil this Monday, “Europe Day”, 9 May.

It is meant as an opportunity for the political  leaders of  the Euro-faithful to renew their vows.

Lucinda Creighton, Dick Roche’s successor as Minister for Europe, is the occasion’s impresario.

Ireland’s Commissar, the exorbitantly-paid Fianna Fail appointee Maire Geoghegan-Quinn, will address the Dáil.

The State’s 12 MEPs will attend so that TDs can ask them questions. Let us hope that at least some TDs will have good questions ready on the power-grabbing, expenses-fiddling and corruption of the European Parliament.

This special Dáil session will undoubtedly see much cant about “the European ideal”,  “our European partners” etc. in the hope of impressing the continentals. But they just want our money these days, as Irish taxpayers are mulcted under the aegis of the ECB to meet the bad debts of German and French private banks.

The reason 9 May is “Europe Day” is to commemorate French Foreign Minister Robert Schuman’s launch of the European Coal and Steel Community on 9 May 1950. The “Schuman Declaration” which he issued that day spoke frankly of the establishment of this first supranational European community as “a first step in the federation of Europe” – a federation being of course a State. That is what makes this statement and this day so important for the Euro-federalists.

Irish people have been lied to time and time again to conceal the fact of a federal-style quasi-Superstate under Franco-German hegemony being the ultimate political purpose of the EU.  For decades they have been sold the falsehood that the EU is just about jobs and growth, and not a political/fiscal union.  Remember the “Vote Yes for Jobs” slogan of the Yes-side groups in the second Lisbon Treaty referendum?

The “myth of origin” of the EU/EC is that it is essentially  a “peace project” to end wars between France and Germany. This is quite unhistorical. The truth is that the 1950 Coal and Steel Community was thought up to reconcile France to German rearmament in the newly founded NATO – a key aim of American policy at the start of the Cold War. The French were alarmed at the thought of Germany being rearmed just six years after the Germans occupied France.  Jean Monnet, who authored Schuman’s declaration, was America’s man in the affair. The Americans backed strongly the Monnet/Schuman proposal to put the coal and steel industries of France, Germany and the Benelux  countries under a common supranational High Authority, of which Monnet was made first Secretary-General. This was the predecessor of the later Brussels Commission. This step quelled French anxieties at the time. In those days European integration was US Government policy, and it  is well-known that the CIA financed the European Movement throughout the 1950s and 1960s and perhaps later to push that objective.

CITIZENS’ DEMONSTRATION: There will be a non-party Citizens’ Demonstration against this Europe Day farce outside the Dáil in Kildare Street  from 12.30 to 2.00 pm. on Monday, 9 May.

PEOPLE ARE INVITED TO BRING A POSTER WITH THEM, WITH AN APPROPRIATE MESSAGE, but no party banners: for example  “EU/ECB Rule: Death of Irish Democracy”,  “Ireland Yes, EU/ECB No”, “Europe Day Dail Farce”, or some variant of these.

AND PLEASE PASS ON THIS MESSAGE TO OTHERS.

(Signed) Anthony Coughlan
Director
The National Platform EU Research and Information Centre
24 Crawford Avenue
Dublin 9
Tel.: 01-8305792

Ireland after it’s 2011 General Election

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

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

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

2. IRISH LABOUR AS THE MUDGUARD OF FINE GAEL

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

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

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

3. THE EUROZONE FRAMEWORK OF IRELAND’S ECONOMIC CRISIS

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

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

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

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

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

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

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

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

5. HOLDING THE ECB TO RANSOM

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

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

6.  MONETARY UNIONS, FISCAL UNIONS, POLITICAL UNIONS

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

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

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

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

7. REESTABLISHING IRELAND’S NATIONAL CURRENCY

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

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

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

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

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

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

Irish Times: Dominating Role of Larger EU States

The Irish Times – Friday, March 4, 2011 (letters)

Madam, – Dr Garret FitzGerald (Opinion, February 12th) shows concern that moving away from the so-called “community method” of making EU laws towards a more “inter-governmental” approach may open the way to an EU that “for the first time becomes dominated by some larger states”.

This looks like trying to lock the proverbial stable door after the horse inside has bolted.

For decades Dr FitzGerald and those who share his views on the EU have been advancing the quite unrealistic notion that the EU is a radically new form of political life and governance in which the big European states are willing to subordinate their national interests to a larger common EU interest and that it therefore makes sense for smaller states to “pool sovereignty” with them.

In historical reality the EU since its inception has been an arena for the pursuit of the national interests of its member states, above all its bigger ones, France and Germany especially. The big states use the EU to try to dominate the smaller ones if it suits them. If not, they will go outside it or beyond it. Three developments in the past 20 years show this strikingly.

The first was the establishment of the euro currency under the 1992 Maastricht Treaty. The core objective of that was to reconcile France to Germany’s sudden reunification in 1990, using economic means that were quite inappropriate for that purpose.

The current financial crisis shows the euro currency’s structural flaws. It has fundamentally divided the EU between the 17 EU states inside the euro zone that are now suffering the euro’s torments, and the 10 EU states outside it that are not.

The second was the 2001 Nice Treaty which allows an inner group of nine or more EU states to integrate further among themselves and to use the EU institutions to do that, even though the other EU members are opposed. This was a fundamental break with the notion of the EU as a partnership of equals in which no major step would be taken without unanimity. It enables the big states to present the others with unpleasant faits-accomplis. For example it would enable the 17 euro zone members, or a sub-set of them, to adopt a common tax base for assessing corporation profits tax, or a common tax rate if they wish, as could well happen in the coming period.

The third was the Lisbon Treaty of 2009. In power-political terms this treaty’s most important provision is that it puts EU law-making on a primarily population-size basis for the first time – from 2014. This means that in three years’ time Germany’s voting weight in making EU laws on the EU Council of Ministers will be doubled from its present 8 per cent to 17 per cent, France’s, Italy’s and Britain’s vote will go from their present 8 per cent each to 12 per cent each, while Ireland’s will fall from its present 2 per cent to 0.8 per cent. Is not this by any standard a power-grab by the big states?

For decades Irish policy-makers have used rhetoric about “the European ideal”, “our EU partners” and “an EU community of equals” to justify handing over ever-greater tranches of State power and law-making to the EU. A more hard-headed and less self-deluding approach will surely be needed by future Irish governments if we are to get out of our present mess. – Yours, etc,

ANTHONY COUGHLAN,
Director,
The National Platform EU Research and Information Centre,
Crawford Avenue, Dublin 9.
 

Germany demands a Lisbon III … and the Government and Attorney General Paul Gallagher will come under pressure to obey

It is the Supreme Court, not the Government or its Attorney General, that has the power ultimately to decide whether a referendum will be needed in Ireland if Germany, backed by France, insists on changing the EU Treaties to suit its interests.

Little more than a year since the EU Heads of State and Government assured everyone that no further EU Treaty changes would be needed for the foreseeable future, the same people seem now willing to bow to Germany’s wishes to change the Treaties anew to give the EU more power.

If Treaty changes are agreed in the coming period, the Irish Government, and Attorney General Paul Gallagher SC in particular, will come under heavy pressure to avoid an Irish referendum at all costs, for fear it may be lost.  If Mr Gallagher obliges he can almost certainly expect to face a re-run of the Crotty case.

It was Attorney General Gallagher who advised the Government in September 2008 that a State guarantee of all the debts of Ireland’s private banks was legal and that Irish law required that the creditors and bondholders of the Irish Banks could not be touched in view of such a guarantee.  This opened the way to Finance Minister Lenihan paying €7.9 billion to the senior bondholders of Anglo-Irish Bank just three weeks ago, without any question of them being asked to take a “haircut”, as Irish taxpayers paid up to meet the money foreign investors had lent to Messrs Sean Fitzpatrick and Co.

Elements of the so-called  “bailout fund” for the eurozone that was agreed by the EU Governments last May are almost certainly in breach of Articles 122 to 125 of the Treaty on the Functioning of the European Union. (NB. This is not the Lisbon Treaty, but rather the second of the two basic EU Treaties that were amended by Lisbon and which are currently in force.)

What we see playing out in the current economic crisis is Germany’s attempt, for the third time in a  century, to dominate Europe by means of its dominance of the eurozone –  with France holding on to its coat-tails, as the Vichyist rather than Gaullist tradition governs policy in Paris.

The Irish public should find it instructive to see the Eurofanatics and career-federalistas in Iveagh House, Upper Merrion Street, Kildare Street and the Irish Times positioning themselves in the coming period to comply anew with the wishes of their new Teutonic masters.

The Eurofanaticism that led them to support the Maastricht Treaty abolishing the Irish national currency and to join the euro-zone in 1999 – an area with which we did only one-third of our trade – is primarily responsible for getting the country into its present dire economic and political mess.  It will be interesting to see their spin-doctors turn and twist as they try and justify their disastrous course over the coming months, and engage in the blame-game vis-à-vis one another that has already covertly started.
(29 October 2010)

⁂ German judgement is a call to action against the EU’s democratic deficit

JENS-PETER BONDE
(EUObserver/Comment)
24 July 2009

The German Constitutional Court issued a remarkable verdict on 30 June. It was described in the press as the Court’s approval of the ratification of the Lisbon Treaty.

However, careful reading of the judgement shows that it is a fundamental rejection of the core constitutional content of the Treaty.

The Court judgement modifies the most important principle of the primacy of European law. Member States are said to be the “masters of the Treaties.” In the Court’s view the EU institutions have no powers of their own. They can only administer delegated competences in prescribed areas. European law is stated to be ultimately based on and limited by the accession law of each Member State.

The German Court implicitly invites any citizen, political party or business firm in Germany to take court cases before the German Constitutional Court if they find that a piece of proposed EU law is outside those delegated competences. Then it is the German Court that will decide – not the EU Court.

This is a rejection of Art. 344 of the Treaty on the Functioning of the European Union, which provides that Member States undertake not to submit a dispute concerning the interpretation or application of the Treaties to any method of settlement other than the European Court of Justice.

The Karlsruhe Court also insists that there must be important areas of law-making and decision-taking left to the EU Member States. This is an invitation to politicians everywhere to ask their governments what competences are left with the Member States after the adoption of the Lisbon Treaty.

I have offered a bottle of top class wine to anyone who can give me just one example of a national law which cannot be touched in some way by the Lisbon Treaty. Legal specialists have tried to find examples; yet they cannot!

If EU governments cannot find room for the exercise of meaningful national parliamentary democracy within the ambit of the EU, then the Lisbon Treaty is unconstitutional, according to the German Court.

The Court does not accept that the European Parliament is a body which can give adequate democratic legitimacy to European Union law. The Court also sets limits to the importance of the new “additional” Union citizenship and states that this can only be supplementary to national citizenship.

The Court insists on national parliamentary participation in all areas where Member States would lose their right of veto.

The judges unanimously insist, by 8 votes to nil, on prior approval by the German Parliament – and implicitly by other National Parliaments – for the use of the so-called “bridge articles” whereby Government Ministers on the Council of Ministers or the European Council can alter EU law-making from unanimity to qualified majority voting.

The judges also require full participation of National Parliaments in the use of the flexibility clause in Art. 352 TFEU, which permits the EU to take action and adopt measures to attain one of the EU’s objectives even if the Treaties have not provided the necessary powers.

Finally, the Court forbids the German President from signing the Treaty so as to enable Germany’s instrument of ratification to be deposited in Rome until the German Parliament has adopted a law which would safeguard the involvement of the German Bundestag and Bundesrat in future EU decision-making.

The most striking element in the judgement is that the Court implies the need for the involvement of National Parliaments in all aspects of EU law-making. They refer to democracy as being a principle common to all the EU Member States. The involvement of National Parliaments in EU law-making is therefore a necessity. If not, the principle of democracy will have been fundamentally breached.

Recognising the democratic deficit

The Karlsruhe Court effectively finds that the Lisbon Treaty would increase the EU’s widely acknowledged democratic deficit if its ratification is not linked to the adoption of internal procedures at Member State level such as to safeguard the involvement of the National Parliaments and voters in each Member State.

The verdict applies only to Germany, of course. But it has significant implications for all Member States, including those which have already approved and ratified the Lisbon Treaty.

With this Court judgement in hand, political parties and groups of citizens in each Member State are implicitly invited to go to their National Parliaments and insist on similar guarantees being given in order to ensure the involvement of elected representatives and voters in EU decision-making in each one.

If Germany’s ratification of the Lisbon Treaty is found to be illegal and in contravention of basic democratic principles in the absence of such parliamentary controls, should not the same principle apply in all other Member States that claim to be democracies?

The Karlsruhe judgement should inspire people to call for similar constitutional and parliamentary challenges in other EU countries. This may establish strengthened procedures for national parliamentary control and safeguard areas where national parliamentary democracies can decide things on their own without interference from, for example, the EU Court of Justice.

Such calls may also win time to make people aware of the anti-democratic character of the Lisbon Treaty and ensure that this is not ratified by all EU States before it has been approved by Irish voters in their referendum re-run on 2 October next, and can be put later before British voters in a referendum in the United Kingdom.

The United Kingdom must have a general election before June next year. The Conservative Party, which is likely to win that election, has pledged to withdraw the United Kingdom’s ratification of the Lisbon Treaty on its first day in office if the Treaty has not come into force by then for all 27 EU States. It has then pledged to hold a referendum on it and to recommend a No vote to the British people.

There needs to be a democratic review of the Lisbon Treaty in all EU countries before any such encounter with UK voters.

(The author was MEP 1979 – 2008 and served as a member of the Convention on the Future of Europe)

Excerpts from the German Constitutional Court judgement in the English version published by the Court, 30 June 2009.

“European unification on the basis of a union of sovereign states under the Treaties may not be realised in such a way that the Member States do not retain sufficient room for the political formation of the economic, cultural and social circumstances of life.” (Headnotes to the Judgement, Par. 3)

“It is therefore constitutionally required not to agree dynamic treaty provisions with a blanket character or if they can still be interpreted in a manner that respects national responsibility for integration, to establish, at any rate, suitable national safeguards for the effective exercise of such responsibility.” (Par.239)

“European unification on the basis of a union of sovereign states under the Treaties may not be realised in such a way that the Member States do not retain sufficient space for the political formation of the economic, cultural and social circumstances of life. This applies in particular to areas which shape the citizens’ circumstances of life, in particular the private space of their own responsibility and of political and social security, which is protected by the fundamental rights, and to political decisions that particularly depend on previous understanding as regards culture, history and language and which unfold in discourses in the space of a political public that is organised by party politics and Parliament. Essential areas of democratic formative action comprise, inter alia, citizenship. the civil and military monopoly on the use of force, revenue and expenditure including external financing and all elements of encroachment that are decisive for the realisation of fundamental rights, above all as regards intensive encroachments on fundamental rights such as the deprivation of liberty in the administration of criminal law or the placement in an institution. These important areas also include cultural issues such as the disposition of language, the shaping of circumstances concerning the family and education, the ordering of the freedom of opinion, of the press and of association and the dealing with the profession of faith or ideology.” (Par. 249)

“Consequently, the Treaty of Lisbon does not alter the fact that the Bundestag as the body of representation of the German people is the focal point of an interweaved democratic system.” (Par. 277)

“… the European Parliament is not a body of representation of a sovereign European people.” (Par.280)

“The deficit of European public authority that exists when measured against requirements on democracy in states cannot be compensated by other provisions of the Treaty of Lisbon and to that extent, it cannot be justified.” (Par.289)

“As regards the legal situation according to the Treaty of Lisbon, this consideration confirms that without democratically originating in the Member States, the action of the European Union lacks a sufficient basis of legitimisation.” (Par.297)

“Finally, the Treaty of Lisbon does not vest the European Union with provisions that provide the European union of integration (Integrationsverband) with the competence to decide its own competence (Kompetenz-Kompetenz).” (Par.322)

“With Declaration No.17 Concerning Primacy annexed to the Treaty of Lisbon, the Federal Republic of Germany does not recognise an absolute primacy of application of Union law, which would be constitutionally objectionable, but merely confirms the legal situation as it has been interpreted by the Federal Constitutional Court. . .” (Par. 331)

“After the realisation of the principle of the sovereignty of the people in Europe, only the peoples of the Member States can dispose of their respective constituent powers and of the sovereignty of the state. Without the expressly declared will of the peoples, the elected bodies are not competent to create a new subject of legitimisation, or to delegitimise the existing ones, in the constitutional areas of their states.” (Par. 347)

⁂ Belgian Foreign Minister: EU increasingly governed by the few

Every year some 120 Belgian ambassadors abroad come to Brussels for an information day. This year foreign Minister Karel De Gucht outlined the priorities for the Belgian EU presidency, the second half of 2010. He especially wants to combat the tendency of the bigger EU countries to dominate.

“The European Union may not become an institute run by a small elite group consisting of the larger member states. And this is exactly the direction we are going in at the moment. It’s the big dream of more than one leader of a big member state or a state that thinks it is big to run the show.”

Mr De Gucht points out that in the spirit of the treaties there must be cooperation, not domination. In his opinion Belgium is certainly not alone in its criticism of the growing influence of the larger member states.
“We’ve been saying this for some time- and now I’m noticing that increasingly more countries share our analysis- except for the big countries themselves- that Europe is not served by an elite group of directors.”

Belgian Foreign Minister: EU increasingly governed by the few

Euractiv reports that Belgian Foreign Minister Karel de Gucht has said that the ‘institutional balance’ of the EU is in “danger”. With just a year to go until the Belgian EU Presidency, he warned that the EU is increasingly governed by an “executive board of big countries”. Citing the recent G20 summit in London he said, “The London G20 meeting has first been prepared in Berlin by a small group of [EU] member countries, that is, those of them who are G20 members. The General Affairs Council was barely consulted, in fact only post factum.”

EurActiv Knack

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