(Note: The following replaces & corrects earlier version of 7/May)
Reply to Dr Gavin Barrett, Senior Lecturer in European Law, UCD, who wrote an articleurging a Yes vote in the Fiscal Treaty referendum in the Irish Times on Friday 4 May, by Anthony Coughlan, Director, The National Platform EU Research and Information Centre, 24 Crawford Avenue, Dublin 9; Tel.: 01-8305792
Wednesday 9 May 2012
“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.”
- Proposed amendment to Article 136 TFEU of the EU Treaties by which the 27 EU Member States authorize the 17 Member States of the Eurozone to establish a Stability Mechanism
The above Art.136 TFEU amendment to the EU Treaties has still to be approved by Ireland in accordance with its constitutional requirements under the “simplified” EU treaty amendment procedure of Article 48.6 TEU.
The European Council “Decision” to insert this amendment into the EU Treaties comes into force on 1 January 2013 if by that time it has been approved by all 27 EU Member States in accordance with their constitutional requirements.
The ESM Institution which the 17 Eurozone States seek to establish and which Ireland would become a Member of is to be set up by the ESM Treaty for the 17 on the basis of this Art.136 TFEU authorization by the 27. The ESM Treaty states that it is “complementary” to the Fiscal Treaty on which we have a referendum vote on 31 May.
The Government has promised the other 16 Eurozone Governments that it will have the ESM Treaty ratified by July, but without the necessary constitutional referendum being held on it and on the Art. 136 TFEU amendment which authorizes it.
A. We will get the money by holding a referendum on the Article 136 TFEU amendment and the ESM Treaty that it authorizes. This is constitutionally required in Ireland in order to validate these proposals as they stand, but our supine Government wants to avoid such a referendum at all costs. The 16 other Eurozone States will have to persuade us to vote Yes in such a referendum if they are to establish the kind of Stability Mechanism which the ESM Treaty envisages. They can do this by agreeing to forgive the private bank debt the ECB has insisted should be imposed on Irish taxpayers, plus the Anglo-Irish promissory notes etc. An Irish referendum on Article 136 TFEU and the ESM Treaty would also be an opportunity to add the voice of the Irish people to the calls across Europe for the Eurozone authorities to agree a growth strategy instead of the present failed austerity policies.
A. Where will the Government get the money to pay the €11 billion the ESM Treaty will require from us - €1.3 billion up front and €250 million of that this July! - with an open-ended treaty commitment to pay further sums thereafter without limit?
The People’s Movement has opened an office in central Dublin for the duration of the referendum campaign on the Permanent Austerity Treaty. The office is at 5 Cavendish Row, directly opposite the Gate Theatre.
With six weeks to go before Ireland votes on the European fiscal treaty there are signs the government’s campaign for a Yes vote is in danger of unravelling as public attitudes towards austerity harden and instability in Europe feeds into its referendum debate.
On Wednesday the Irish trade union movement said it could not support the treaty, which would tighten budget rules and introduce penalties for states that break the rules…
Opinion polls show a slim majority (30 per cent) in favour, with 23 per cent against. But with 39 per cent of the public undecided concern is rising in government circles that opinion could swing against the treaty during the campaign, as it did in 2008 when Ireland rejected the Lisbon treaty.
“The trade unions’ position shows the naysayers are growing. You can see from studying social media there is a higher degree of anti-European rhetoric for this referendum,” said David Farrell, professor of politics at University College Dublin.
He said the government faced a challenge in the referendum campaign because of a combination of a backlash against austerity, a lack of knowledge about the treaty and the threat that events in France and the Netherlands could feed into the campaign.
The South East Region of People’s Movement, which is a non party political organisation will be campaigning for a No vote in the referendum on 31st May next.
The grandly titled “Treaty on Stability, Coordination and Governance in the Economic and Monetary Union” is supposedly about “stability” in the Eurozone. Yet the treaty warns us that money from the new permanent European Stability Mechanism bailout fiund will only be given to States that have ratified it.
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. 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, yet now is being threatened that unless it votes to permanently hands over virtually the whole area of budgetary policy to the Eurozone we will not be able to access funding from the European Stability Mechanism should we require it in 2013. We have a gun to our head or so the supporters of the treaty would want us to believe.
In fact Ireland would have a number of options in this event: -
Most economists regard a permanent balanced budget rule as absurdly inflexible. Governments need to run deficits on occasion to stimulate their economies and expand economic demand when that slumps heavily in their domestic or foreign markets.
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 %.This would be the context in which we had surrendered much of the stuff of national decision making and normal party politics from the arena of democratic consideration and debate.
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