Alert: Government Attempts to Pass ESM with Minimal Public Debate

Today – Wednesday, & Tomorrow – Thursday

The Government will seek Dail approval of:
The Article 136 TFEU amendment to the EU Treaties which authorises the setting up of the permanent Eurozone loan fund, the European Stability Mechanism
+ A motion to approve the ESM Treaty which is authorized by this amendment
+ A motion to approve future Government spending on the ESM,
TODAY – WEDNESDAY, AND TOMORROW – THURSDAY.
A guillotined debate on the second reading of the latter Bill will take place TOMORROW.

This means that the whole business of signing up the Irish State to the ESM Treaty for the Eurozone and committing us to significant expenditure to help bail out Spain and other Eurozone countries in the coming period, could go through all stages in the Oireachtas BY THE END OF NEXT WEEK – with minimal debate in the Irish media over the long-term implications of these steps or awareness of what this all means amongst the general public.
The ESM Treaty can be downloaded from the internet – http://www.european-council.europa.eu/media/582311/05-t…2.pdf
The relation of the ESM Treaty to the Article 136 TFEU amendment to the EU Treaties authorizing it and to the Fiscal Treaty which Irish voters voted on last Friday is set out in the publication “A Tale of Two Treaties” by Cork solicitors Joe Noonan and Mary Linehan.
This can be downloaded from the internet at: http://taleoftwotreaties.tumblr.com
The letter below to the Ambassadors in Ireland of those EU States which have not yet ratified or approved the ESM Treaty or the Article 136 TFEU amendment sets out the reasons for regarding the ESM Treaty as it stands as illegal under EU law and in violation of the Irish Constitution.
A reformatted standalone version of this as explanatory text, is available here - http://nationalplatform.org/2012/06/06/4-reasons-the-esm-treaty-is-illegal-2/ – “4 Reasons why the ESM Treaty is illegal”.
If these measures are pushed through the Oireachtas this week and next in the way the Government proposes, the only way this profound illegality and unconstitutionality can be prevented is by President Higgins referring the relevant Bill to the Supreme Court for adjudication or by Deputy Thomas Pringle’s legal team securing a relevant injunction to stop it pending a Court hearing of the issues.
Yours sincerely
Anthony Coughlan
Director, National Platform EU Research & Information Centre

The EU Permanent Austerity Treaty (Fiscal Compact Treaty & Irish referendum)

The Government seems determined to push ahead in the next few months with the ratification of two important treaties: the “Treaty on Stability, Coordination and Governance in the Economic and Monetary Union” and the revised “Treaty on the European Stability Mechanism” (ESM).

The two treaties would make member-states of the euro zone into regimes of economic austerity, involving deeper and deeper cuts in public expenditure, increases in indirect taxes, reductions in wages, a sustained liberalisation of markets, and the privatisation of public property.

It would really be more accurate to call the first treaty the EU Permanent Austerity Treaty and the second the Conditional Support Treaty. Whatever they are called, the two treaties represent a seriously dangerous threat, and democrats should be mobilising to resist them.

The cumulative effect of being bound by both treaties would be an obligation to insert a balanced-budget rule

“through provisions of binding force and permanent character, preferably constitutional or otherwise guaranteed to be fully respected and adhered to throughout the national budgetary processes.” 

It would put Irish budgets under permanent and detailed supervision by the euro zone; make the existing subordination of Ireland’s interests to those of the “stability of the euro area as a whole” even more systematic and pronounced; impose conditions of “strict conditionality,” without limit, for ESM “solidarity” financial bail-outs; and require Ireland to contribute some €11 billion to the ESM fund when it is established later this year.

The European Commission and the European Central Bank are obsessed with “economic governance,” which would require smaller eurozone states in particular to make themselves permanently amenable to a regime under which Germany and its allies would regularly and permanently vet members’ fiscal policies and impose punitive fines on those failing to observe deflationary budget rules.

When politicians like Enda Kenny urge us to stomach a particular draconian measure, claiming that it would help us to ultimately “restore economic sovereignty,” they conveniently fail to mention that this is the sort of “economic sovereignty” they have in mind. For them, permanent austerity plus the IMF is “national shame”; permanent austerity minus the IMF is “national recovery.” The latter is what is on offer through the EU Permanent Austerity Treaty and the Conditional Support Treaty.

Of course it is totally irrelevant to this Euro-fanatical mindset that the draconian fiscal measures imposed on Greece have only worsened the problems of that country. Also conveniently ignored in this version is the fact that Ireland in the euro zone had to adopt unsuitably low interest rates in the early 2000s, because this suited Germany at the time. In the immortal words of Bertie Ahern, this made our “Celtic Tiger” boom “boomier.” And of course it inflated the property bubble.

The former Taoiseach John Bruton and others have contended that the failure of the ECB to supervise adequately the credit policy of central banks in relation to the commercial banks in Ireland and various other euro-zone countries was significantly responsible for the emergence of asset bubbles in those countries in the early and middle 2000s, and thereby contributed hugely to the financial crisis they are now in.

And the then head of the European Central Bank, Jean-Claude Trichet, was probably engaging in a variety of “economic governance” when he told Brian Cowen and Brian Lenihan on 29 September 2008, at the time of the criminally irresponsible blanket bank guarantee, that Anglo-Irish Bank must on no account be allowed to go bust and that the foreign creditors and bond-holders must be paid every penny.

When the Irish people ratified the Maastricht Treaty in 1992, setting up economic and monetary union, and when they ratified the Lisbon Treaty, establishing the European Union on a new constitutional basis, in 2009, they approved membership of an economic and monetary union whose member-states would follow rules that would be enforced by a system of surveillance by the Commission and formal recommendations and warnings for delinquent states, followed by sanctions in the form of compulsory deposits and fines of an appropriate size in the event of a member-state persisting in breaches of these provisions.

The member-states adopted the rule that the annual budget deficit would be no higher than 3 per cent of GDP and national debt no higher than 60 per cent of GDP to ensure that member-states of the euro zone would avoid excessive deficits and consequent borrowing, for that would affect all euro-zone states using the same currency.

But the excessive-deficit articles were not enforced once Germany, France and other states broke the limits in the early 2000s.

Recommendations of measures to repair excessive deficits were made by the European Commission to a number of member-states, including Ireland, in the early 2000s; but when in 2003 France and Germany found themselves in violation of the excessive-deficit criteria the European Council failed to take any of the other steps set out in the rules to remedy their breaches.

No proposal to impose sanctions for breaking the rules was ever put by the Commission to the Council of Ministers, and no sanctions were adopted against countries violating the rules. As a result, several member-states ran up huge annual government deficits and national public debts that were near to, or in some cases well over, 100 per cent of GDP.

Is debt always a bad thing ?

No European Stability Mechanism Treaty by stealth - Irish electorate should decide

Oireachtas members and MEP call for referendum

Twenty-six members of the Oireachtas and one MEP, have joined in an initiative with the People’s Movement (which campaigned against the Lisbon Treaty in the two referenda) to demand that the Irish electorate have the determining say by way of referendum on the proposals to establish a permanent eurozone fund by Treaty amendments that will be binding on Ireland.

A letter from the Oireachtas members and the MEP, who include members of various parties as well as Independents, says that the Treaty formally subordinates Ireland’s interests to those of the stability of the euro area as a whole yet there has been an almost total media blackout on the implications and consequences of the ESM for the country.

In a statement last night People’s Movement spokesperson, Kevin McCorry, said that the Government should come clean about the European Stability Mechanism Treaty that Finance Minister Noonan signed in July, a Treaty that commits the State to "irrevocably and unconditionally" contribute some €11 billion towards an Eurozone fund from 2013 onwards with the possibility of demands for further sums down the line.

The People’s Movement is also calling on Fianna Fáil to explain why it apparently supports the Government action in amending the EU Treaties by stealth.

It is reasonable, given the state of our economy, Mr McCorry said, for people to know the full details of the cost and implications to the country of borrowing to meet Ireland’s initial €1.27 billion payment and the remainder of the €11,145,400,000 which all concerned seem happy enough to commit us to pay. What guarantee can they give us that the country will get any benefit?

Also if the State were to receive ESM assistance there are no limits to the "strict conditionality" provisions that might be attached in light of the fact that the Treaty formally subordinates Ireland’s interests to those of "the stability of the euro area as a whole" It would mean a regime of unmitigated austerity for decades to come.

And for whose benefit? Certainly not the people of Ireland.



The full text of the letter is as follows:

"The Government in the coming months will seek to push through the Oireachtas an amendment to one of the two Treaties on which the EU is based authorising the establishment of a permanent Eurozone fund, the European Stability mechanism (ESM), and the ratification of the Treaty that actually establishes the fund.

The Treaty which has already been signed but not yet ratified commits the Irish State to irrevocably and unconditionally contribute €11 billion in various forms of capital to the ESM when it is established in 2013 and possibly further sums after that at the behest of Eurozone Finance Ministers when contributions come up for regular review. This will have to be borrowed on the international market.

Weaker economies like Ireland would have to put up cash immediately to cover any short-fall of paid in capital that might arise while triple A rated economies like Germany and France would be put under less financial pressure by being able to fulfil their obligations by way of guarantees.

Assistance from the ESM will only be given on the basis of strict conditionality—these conditions being unspecified and potentially unlimited. If the Irish State were to receive loans or grants or favourable

borrowing facilities from the ESM, these conditions could require the introduction of a balanced budget constitutional amendment or dropping the objection to the harmonization of corporate taxes at EU level.

The Treaty formally subordinates Ireland’s interests to those of the stability of the euro area as a whole yet there has been an almost total media blackout on the implications and consequences of the ESM for the country.

The support of Fianna Fáil for the Government action has further contributed to the managed nature of the whole process. The ESM is part of a package of measures that can only lead to fiscal union in the EU, beginning with stricter controls on budgets and public spending starting with the so-called Euro Plus Pact and soon moving on to a harmonising of taxes.

We believe that the legislation to enable the State to license its establishment and ratify the Treaty setting it up should be put to the Irish people in a constitutional referendum and we urge the Government to let the people decide on this matter of crucial importance for the future of our country"

The signatories are:

Gerry Adams TD, Senator David Cullinane, Clare Daly TD, Dessie Ellis TD, Michael Colreavy TD, Seán Crowe TD, Pearse Doherty TD, Martin Ferris TD, Luke Ming Flanagan TD, Joe Higgins TD, Mary Lou McDonald TD, Finian McGrath TD, Mattie McGrath TD, Sandra McLellan TD, Pádraig Mac Lochlainn TD, Catherine Murphy TD, Paul Murphy MEP, Caoimhghin Ó Caoláin TD, Senator Trevor Ó Clochartaigh, Aengus Ó Snodaigh TD, Maureen O’Sullivan TD, Thomas Pringle TD, Senator Kathryn Reilly, Brian Stanley TD, Peadar Tóibín TD, Mick Wallace TD.

Related Link: http://www.indymedia.ie/article/100577

For further information, contact Kevin McCorry 086 3150301 info at selisboninfo dot com