EU referendum in prospect?

sensibleken

Scofflaw wrote: »

One could equally well say that the option is to suspend their voting rights during their period of incarceration, whereas your suggestion is to strip them of citizenship.

cordially,
Scofflaw

But nobody is getting incarcerated. I think were geoing too far into the analogy here. And also I should have been clear, I didnt mean expulsion from the EU but rather the Euro. Im not advocating it but rather saying that would be more effective than simply suspending their voting rights, which would have no effect on their budget.

Scofflaw

sensibleken wrote: »

But nobody is getting incarcerated. I think were geoing too far into the analogy here. And also I should have been clear, I didnt mean expulsion from the EU but rather the Euro. Im not advocating it but rather saying that would be more effective than simply suspending their voting rights, which would have no effect on their budget.

As far as I'm aware, that's an option that will also be on the table - not expulsion, but the option of withdrawal from the euro, which is currently not possible (despite all the guff being talked about it).

Bear in mind, though, that the option of sanctions has always been part of the euro - but only as part of the excessive deficit procedure. The new rules would encompass sanctions when a state is seen to be going off the rails.

cordially,
Scofflaw

RandomName2

Denerick wrote: »

Spare us the referendum headaches, please.

Whats the anti campaign going to be this time? 'EU Superstate requires one million Irishmen to serve in army'. Minimum wage down to 4 cents an hour? Corporation tax to be raised to 89%?

Hey Denerick please stop quoting Coir as representing No voters. Not only were they totally discredited (both legally and illegally) they have no basis as representatives of the bulk of Irish population. The only decent 'No' posters I saw during the campaign were impromtu ones that were made on home-printers by people who did not have a large slush fund to launch a political campaign (unlike the government). Presumably Coir have backing from ultra-conservative catholics.

Oh... the Coir animal posters and heart posters were okay I suppose.... (mainly on the grounds that they made no specific claims what-so-ever)

---

On topic I would be surprised if anybody gets a vote on this issue. Really surprised.

RandomName2

View wrote: »

I'd actually disagree with you on that Scofflaw. Were the Supreme Court to rule that there was no need for a referendum, I'd say the reaction from the overwhelming majority of the electorate to the "non-holding" of a referendum would be a great big sigh of relief.

Well aren't referenda kind-of irrelevant due to the government's mimicking of the IRA diktat of 'we only have to get lucky once'?

Although we do still have a commissioner... which probably didn't merit the related price tag.

sensibleken

Scofflaw wrote: »

As far as I'm aware, that's an option that will also be on the table - not expulsion, but the option of withdrawal from the euro, which is currently not possible (despite all the guff being talked about it).

Bear in mind, though, that the option of sanctions has always been part of the euro - but only as part of the excessive deficit procedure. The new rules would encompass sanctions when a state is seen to be going off the rails.

cordially,
Scofflaw

Sanctions may be neccesary, what those sanctions are needs a lot of debate. I dont know if the idea of countries bugets being peer revieved by other finance ministers is still being persued. That makes more sense to me. If however it was revieved and told 'look, this is going to make your deficit worse' and they then went ahead and built an escalator to nowhere then some sanctions may have the desired effect.

sensibleken

RandomName2 wrote: »

Well aren't referenda kind-of irrelevant due to the government's mimicking of the IRA diktat of 'we only have to get lucky once'?

Although we do still have a commissioner... which probably didn't merit the related price tag.

strange comparison.

firstly We dont have a commisioner. We get to apoint a commisioner who does not represent us. The commision is over populated anyway, theres not enough jobs for the delegates. The Irish people after lisbon 1 complained and that had to be kept. even though its just wastage.

Secondly, i agree, referena are pointless. Asking me or you to decide on an international treaty between 27 countries that runs into 1000s of pages, references past treaties i need to have knowledge of and is written in legal language that I have no training in is pointless. I elect TDs to be legislatures. Thats their job, I have mine. I am all up for referenda on single issues but massive treaties that dont really change a whole lot is work for lawyers and legislatures

RandomName2

sensibleken wrote: »

strange comparison.

firstly We dont have a commisioner. We get to apoint a commisioner who does not represent us. The commision is over populated anyway, theres not enough jobs for the delegates. The Irish people after lisbon 1 complained and that had to be kept. even though its just wastage.

Secondly, i agree, referena are pointless. Asking me or you to decide on an international treaty between 27 countries that runs into 1000s of pages, references past treaties i need to have knowledge of and is written in legal language that I have no training in is pointless. I elect TDs to be legislatures. Thats their job, I have mine. I am all up for referenda on single issues but massive treaties that dont really change a whole lot is work for lawyers and legislatures

Well we do have a commissioner; they just don't represent us. You are also correct that the Commission is overpopulated and bogged down. All the more reason to maintain an overpopulation.

And no, I was saying that referenda were pointless because the government don't care what the population knows, thinks, or says; the Consilium and Parliament less so. Having an effective veto which in practice just leads to threats from your own and foreign governments before being given an ultimatum which the Irish people (and any people of a small member state) will just give in to is not terribly progressive. However, creating a sole opportunity in history for there to be some discussion (albeit mostly irrational) on the subject is something, I suppose...

A large treaty which makes big changes to multiple areas in national and international policy should be controlled by TDs who have not mentioned in any form whatsoever their position on such legislation in their manifestos? Well, they wouldn't have to anyway; they just tow to the party line (be it FF/FG/Labour just say yes to whatever comes from Brussels or SF/Socialist just say no to whatever comes from Brussels) is a bit of a suicidal way to delegate your sovereignty imho.

Yag reuoY

sensibleken wrote: »

strange comparison.

firstly We dont have a commisioner. We get to apoint a commisioner who does not represent us. The commision is over populated anyway, theres not enough jobs for the delegates. The Irish people after lisbon 1 complained and that had to be kept. even though its just wastage.

Secondly, i agree, referena are pointless. Asking me or you to decide on an international treaty between 27 countries that runs into 1000s of pages, references past treaties i need to have knowledge of and is written in legal language that I have no training in is pointless. I elect TDs to be legislatures. Thats their job, I have mine. I am all up for referenda on single issues but massive treaties that dont really change a whole lot is work for lawyers and legislatures

It was specifically worded this way so they wouldn't have to hold referenda.

The EU and democracy are antonyms.

oscarBravo

Yag reuoY wrote: »

It was specifically worded this way so they wouldn't have to hold referenda.

No, it wasn't.

The EU and democracy are antonyms.

No, they're not.

sensibleken

Yag reuoY wrote: »

It was specifically worded this way so they wouldn't have to hold referenda.

The EU and democracy are antonyms.

that doesn't make sense. We did have a referendum, its language is not the reason we have them.

It was written like that because its a law. Pick up tort law, family law, justice bills etc and youll find theyre all written like that

Mr. Loverman

Let me state from the outset that I am not extremely pro or anti Lisbon Treaty and I'm not a member of a political party or anything like that.

I remember during the build up to the Lisbon Treaty a lot of the anti folk were warning the treaty is virtually a blank slate as it can be altered once it is ratified. A lot of the pro folk said this was nonsense.

I can see on the BBC today (http://www.bbc.co.uk/news/world-europe-11634169) that the Germans and French want to change the treaty. This change would require parliamentary approval only.

In other words, we voted in X but they can change it to Y.

Is my understanding correct? If so, this seems a bit odd...

galwayrush

Seems to be all going downhill for us atm, so i'm not surprised.

Oh dear, was Declan Ganley right....:eek:

PanchoVilla

I always thought the Lisbon Treaty was a bad idea. Even the Amsterdam Treaty we were tricked into voting for (referendum was held on the same day as the Good Friday Agreement referendum) was a bad idea.

The EU are calling the shots in the next budget which will see people left with a huge cut to their disposable income. The sooner we leave the EU the better.

OS119

PanchoVilla wrote: »

The EU are calling the shots in the next budget which will see people left with a huge cut to their disposable income. The sooner we leave the EU the better.

the downside of this act of genius would be that the Irish economy would sink or swim based of what confidence the international money-markets had in the economic literacy and political will of the Irish government, and they'd making such decisions knowing that in extremis the tab wouldn't get picked up by the French and Germans...

can you see the stumbling block?

Mr. Loverman

So if it really is a case that they can change the treaty to whatever they want (and the treaty states they are allowed do this), why would anyone knowingly have supported a treaty like this?

Eliot Rosewater

There's a thread on this already in the EU forum. Scofflaw's opening post deals in part with your concerns.

http://boards.ie/vbulletin/showthread.php?t=2056066029

OhNoYouDidn't

Article 48 of the treaty allows revision of the treaty with no return to the people.

Whether that allows them to amend previous treaties and the stability pact remains to be seen

evercloserunion

Yag reuoY wrote: »

It was specifically worded this way so they wouldn't have to hold referenda.

The EU and democracy are antonyms.

You must be joking. I've heard some crazy claims from Eurosceptics over the years but to claim thet we don't hold referendums on EU treaties (like the Lisbon Treaty, which is as heavy on legalese as any treaty you'll find) is up there with the very best of them.

unit 1

Is'nt everybody too busy working in all those jobs that it was supposed to bring to notice.:D

Eliot Rosewater

OhNoYouDidn't wrote: »

Article 48 of the treaty allows revision of the treaty with no return to the people.

No, it doesn't.

Article 48

Ordinary Revision Procedure: "The amendments shall enter into force after being ratified by all the Member States in accordance with their respective constitutional requirements."

Simplified Revision Procedure: "That decision shall not enter into force until it is approved by the Member States in accordance with their respective constitutional requirements."

It goes with out saying that "in accordance with their respective constitutional requirements" means a referendum in Ireland.

http://www.lisbon-treaty.org/wcm/the-lisbon-treaty/treaty-on-european-union-and-comments/title-6-final-provisions/135-article-48.html

oscarBravo

Thread from Politics merged in.

oscarBravo

PanchoVilla wrote: »

Even the Amsterdam Treaty we were tricked into voting for (referendum was held on the same day as the Good Friday Agreement referendum) was a bad idea.

Wow. I've been guilty of lacking faith in the electorate, but I've never seen the idea expressed so clearly that we're all completely brain-dead.

View

Eliot Rosewater wrote: »

No, it doesn't.

Article 48

Ordinary Revision Procedure: "The amendments shall enter into force after being ratified by all the Member States in accordance with their respective constitutional requirements."

Simplified Revision Procedure: "That decision shall not enter into force until it is approved by the Member States in accordance with their respective constitutional requirements."

It goes with out saying that "in accordance with their respective constitutional requirements" means a referendum in Ireland.


http://www.lisbon-treaty.org/wcm/the-lisbon-treaty/treaty-on-european-union-and-comments/title-6-final-provisions/135-article-48.html

That last comment in bold isn't necessarily correct.

Roughly speaking, post-Crotty:

Were a proposed Treaty change to involve minor adjustments to the existing treaties, then it is unlikely that such a Treaty change would NOT require a referendum.

Were a proposed Treaty change to involve major (new) adjustments to the existing treaties, then it is almost certain that such a Treaty change would require a referendum.

Lisbon didn't effect this one way or another.

The Supreme Court has the ultimate say in this. But it should be pointed out that the government has always erred on the side of caution and called referenda. There was actually some legal opinion prior to Lisbon I, that a referendum on the treaty was unnecessary. The Crotty judgment appears to be much narrower than it is usually interpreted.

View

oscarBravo wrote: »

Wow. I've been guilty of lacking faith in the electorate, but I've never seen the idea expressed so clearly that we're all completely brain-dead.

Indeed, the logical conclusion of many Eurosceptic's arguments is that, if the people are too stupid to distinguish the wood from the trees, then we should not hold referenda.

The alternatives to that though would appear to be either we can never change the constitution - a strange idea - or, alternatively, we follow the example of most countries and have the Oireachtas change it by super-majority. Oh course, the latter idea would upset the Eurosceptics even more.

Scofflaw

View wrote: »

That last comment in bold isn't necessarily correct.

Roughly speaking, post-Crotty:

Were a proposed Treaty change to involve minor adjustments to the existing treaties, then it is unlikely that such a Treaty change would NOT require a referendum.

Were a proposed Treaty change to involve major (new) adjustments to the existing treaties, then it is almost certain that such a Treaty change would require a referendum.

Lisbon didn't effect this one way or another.

The Supreme Court has the ultimate say in this. But it should be pointed out that the government has always erred on the side of caution and called referenda. There was actually some legal opinion prior to Lisbon I, that a referendum on the treaty was unnecessary. The Crotty judgment appears to be much narrower than it is usually interpreted.

It's actually extremely narrow. The only basis on which the judgement was made was the article requiring member states to take account of the position and interests of other member states when making foreign policy, which prevented the Irish government from making foreign policy decisions solely in the light of Ireland's particular interests. Foreign policy was therefore a previously 'unfettered' sovereign power, and the SEA placed a limit on it.

Crotty's argument that the SEA involved unforeseen changes to the Treaties was found invalid, on the basis that every major policy area involved in the SEA already formed part of the existing Treaties. The question of whether the Oireachtas had the power to delegate functions to a supra-national body such as the EU was settled in 1972, also by referendum:

A particular problem arose in 1972 at the time when Ireland was proposing to joint the European Economic Community and that was whether the Oireachtas had power to make an international agreement part of the domestic law of the State. That was a matter for the Oireachtas only, but it was questioned as to whether the Oireachtas had power to delegate law-making functions administrative, legislative, executive and judicial functions to supranational authorities and for that reason it became necessary to pass the Third Amendment to the Constitution

It's worth quoting from the judgement - this is from Walsh's summary:

In enacting the Constitution the people conferred full freedom of action upon the Government to decide matters of foreign policy and to act as it thinks fit on any particular issue so far as policy is concerned and as, in the opinion of the Government, the occasion requires. In my view, this freedom does not carry with it the power to abdicate that freedom or to enter into binding agreements with other States to exercise that power in a particular way or to refrain from exercising it save by particular procedures, and so to bind the State in its freedom of action in its foreign policy.

The freedom to formulate foreign policy is just as much a mark of sovereignty as the freedom to form economic policy and the freedom to legislate. The latter two have now been curtailed by the consent of the people to the amendment of the Constitution which is contained in Article 29, s. 4, sub-s. 3 of the Constitution. If it is now desired to qualify, curtail or inhibit the existing sovereign power to formulate and to pursue such foreign policies as from time to time to the Government may seem proper, it is not within the power of the Government itself to do so.

In essence, the reason for the Crotty judgement was that the exercise of foreign policy, unlike economic policy and legislation, had not up to that point been in any way fettered by the Treaties.

For ratification of an EU Treaty by the Oireachtas alone to be found unconstitutional, it would be necessary to show that a previously unfettered sovereign power exercised by the government was being for the first time abrogated in that Treaty.

cordially,
Scofflaw

evercloserunion

View wrote: »

Indeed, the logical conclusion of many Eurosceptic's arguments is that, if the people are too stupid to distinguish the wood from the trees, then we should not hold referenda.

The alternatives to that though would appear to be either we can never change the constitution - a strange idea - or, alternatively, we follow the example of most countries and have the Oireachtas change it by super-majority. Oh course, the latter idea would upset the Eurosceptics even more.

What the Eurosceptics really want is a Eurosceptic dictator who can change the constitution by himself and do whatever else the Eurosceptics happen to want, without any input from the stupid plebs.

Avgas

The discussion is lacking bite in my view.

First, what the Germans appear to be looking for (sanctions involving suspension of voting rights plus the changes given the status of an EU Treaty change) is probably an exaggerated negotiating position-they may well not get it and they may well not really expect to get it either.

Second, understand where they are coming from.

The German position is being driven by domestic politics. Merkel's faction of the CDU want to be seen as not being footloose with German taxpayers money...being used to bail out the feckless Irish and Greeks...but she is probably also more working off legal advice that a challenge to the validity of the joint EU/IMF stabilisation fund under German constitutional law could well be successful. If the German constitutional court declares the ad hoc fund not consistent, with either/both the German constitution and the 'no bail out rule' [which most Germans believe they were given since at least the Maastricht Treaty], then the sh**t hits the fan. (The verdict is due apparently in spring of next year)

It could in theory mean that the Germans refuse to contribute to the fund, and bare in mind that there is a very good chance that Ireland will need to borrow money from that fund to finance out deficit.....today Irish bond premiums have gone over 7%. We will return to selling Irish t-bonds in either January or February 2011. If the market won't buy them or won't buy them without a huge premium, then we have to 'phone a friend' and get money from the IMF/EU fund as Greece has done. We may end up doing a bit of both...selling some bonds at huge premiums and also getting fiscal IOUs from the fund. Already the ECB has been doing a stealth bailout by buying Irish T bonds, most noticeably in the summer this year.

It is in our interest to have that fund working and the Germans paying into it.

However, it is also in Ireland's domestic political interest to avoid if at all possible a referendum on an EU question, especially given that the Treaty change will be nasty: "do you want bailout cash or not? If yes, then you must agree to fascist sanctions and a Treaty change which likely means a referendum which has every possibility of being rejected". The odds of that passing would be slim given the mood of the electorate. German political leadership probably think it would be passed if it was put to the Irish electorate as a crude " say yes to bailout cash" proposition. Many Irish people will simply see it as 'Do what we want or you don't get the money you need'.

Bare in mind that if we did say yes to a future Treaty change which inshrined draconian sanctions against a member state who broke the Eurozone rules...then these would very likely be used against us in 2014-15. The fairy tale that Ireland will bring its deficit down to 3% as the Maastricht Treaty suggests is just that-a fairly tale. The markets know this already. That is what the 7% premium is telling us.

Its hobson choice: agree and vote yes-we get cash but lose voting rights; disagree and vote no-we don't get bailout cash for sure, markets go even more nuts and we are probably crash-landed into a default. Nice.

Although we're in an Argentina moment and beyond broke something not fully rational and deeply Irish in me says" 'stuff your money, no!'

And I have voted for the YES side in all our recent farcical referendums....I consider myself very pro-EU and I believe this proposal a betrayal of the EU.....

The general idea of suspending voting rights because a state has acted the maggot and broken the rules of the Eurozone is both utter nonsense and fascist. I hope Merkel is heavily slapped down..but like I say I don't believe the Germans actually seriously believe in it. It is a gambit. But it will do the whole EU and the Germans incredible damage and it just plays into the hands of Eurosceptics.

The obvious sanction is removal of EU transfers for any state (like Greece) who was 'scamming' it. Moreover, both Ireland and Greece received lots of money for their farmers under the CAP. If we break Eurozone rules then we should be prepared to get our cash transfers cut......that does make some sense in the logic of a 'red card'.

But suspending voting rights is fascist. Clearly Dermot Morgan is NOT dead but alive and in Berlin writing absurd scripts for Merkel (and moonlighting no doubt for BIFFO).

Finally, consider some delicious 'ironies' in all this.....

(1) Because the PIIGS have undermined confidence in the Euro, the effect has been a substantial depreciation of the value of the Euro against international currencies. The main beneficiary of this has been Germany-whose exports have surged this year, and real wages for Germans will rise this year in the Germany for the first time in years. Much of this German boom is domestic-structural: China really wants what those fun German toolmakers produce! But some of this is "thanks to depreciationary efforts of the Eurozone delinquents...the PIIGS...."

Maybe we should point this out to them. In some ways the Eurozone's crisis has had positive effects on the 'real economy'.

(2) If the German constitutional court rules any ad hoc bailout fund illegal this could provoke a situation whereby Ireland, or any other of the PIIGS, could formally default on some of its debt burden....because of basically timing (we have money to pay state salaries until Spring 2011 and the verdict is due then)..which if it happened suddenly...would likely trigger a contagion effect in.....and guess where would feel some pain?.....Why German banks....especially the regional Lands banks many of who were involved in parcelling out syndicated debt to Irish Greek, Spanish and Portuguese banks in the boom....So....if we default we will ruin ourselves even more than we are now...but we will also bring others down with us...and some of those holders of Irish debt speak German.......

So interestingly following the logic of Mutual Assured Destruction (MAD) while the Germans have us over a barrel, we curiously have the leverage of the demented drunk in the powder magazine with a box of matches and a wild sloppy grin..........:)

Seeing as Biffo is over there negotiating this now the drinks cabinet must be firmly locked......or would it be better if it were open?

(3) Finally the cynical political Truth of all of this is that none of this needs to happen...ad hoc arrangements working within and outside the Lisbon Treaty make perfect sense.. if a state like Germany is worried about the moral hazard of a bailout fund then enshrining it as part of EU Treaty law makes dubious sense........and in any event much of it can be farmed out beyond the EU institutional maze to third parties like the IMF anyway.......and there is always lawyers' wriggle room to say 'well yes the Maastricht Treaty does say there will be no bail out BUt this is not really a real bail-out...it just looks like a bail-out and anyway the alternative is meltdown.."

Just some thoughts.

RandomName2

Avgas wrote: »

However, it is also in Ireland's domestic political interest to avoid if at all possible a referendum on an EU question, especially given that the Treaty change will be nasty: "do you want bailout cash or not? If yes, then you must agree to fascist sanctions and a Treaty change which likely means a referendum which has every possibility of being rejected". The odds of that passing would be slim given the mood of the electorate. German political leadership probably think it would be passed if it was put to the Irish electorate as a crude " say yes to bailout cash" proposition. Many Irish people will simply see it as 'Do what we want or you don't get the money you need'.

Personally, if I was a German citizen I would be pissed off with rogue euro-member states, but having a say over who joins the EU, and how the EU operates is their problem if the German populace has never pushed hard enough to have a say on the matter. If you lose control over whether or not you lose the Mark, whether crack-pot economies join the single currency, and what long-term repercussions of the above have on the German tax-payer in the long-term, then there is little point in throwing your bottle out of the pram when it all goes to **** and demand that the rules are changed to suit your agenda. Merkle's stance is probably far more dictated by the banking interests in this regard than the probable reaction of angry voters taking their frustration over euro mismanagement in national elections.

But rule changing is an interesting area when it comes to the EU....

Because the series of rules and regulations to which the Irish have signed up to in past agreements is always being brought to the fore in any debate; at least in terms of a perceived duty that Ireland bears to the EU. However, the reversal is not true; and time and again the EU through the medium of our government has proven to be economical with the truth, again and again, in relation to notional promises granted to the Irish electorate.

In many ways the last referendum is exactly what you are describing:

Agree to increase the power of the institutional structure of the EU and in return you will save Ireland's economic viability. You signed up to the EU, this sort of concession is what is demanded, failure to comply will mean insolvency.

How this insolvency was meant to resolve itself was not entirely clear, but the government came out with several hypotheses (perhaps most clearly articulated by De Rossa... okay he wasn't part of the national government, but he was on message):
If you say no:

1. The mutinational companies will take flight
2. The Consilium and Parliament will turn against us and make problems for Ireland in terms of legislation
3. Funding for Ireland will be dropped.

And who knows, maybe 2. and 3. were true? In reflection they probably were (although 1. was purely bogus). Nevertheless the government overextended themselves in their bid to get the treaty passed;
Claiming:

• That the wake of the treaty would actively help end the recession
• That Ireland's budgetary independence would in no way be threatened
• That we would be highly valued, respected, and protected if we said yes; be at the 'heart' of Europe'.

Now all that was bull**** of the highest order, of course
So Ireland grudgingly concedes and... well if things didn't get better, at least we can be consoled that they didn't get much worse.

However if this thing comes to a vote people will either say:
**** you, things didn't get any better! How could they get any worse? We won't give you what you want.

or...

The last vote was to prevent things getting worse, this one is to make things actively better. It is a worthwhile trade-off of cash for sovereignty.

Well, unfortunately, the case is that things can get much worse, and if an ultimatum tied to a bailout is given we actually wont have much option.

So your analogy of the drunk with the match is quite apt. However, in this case the drunk may drop a match and for nothing to happen (go back to the polls!)

Bid me strike a match and blow.

---

It is worth noting that if the idea concerning 'small changes' is maintained that there will, as I predicted, be no vote on the issue. Perhaps the way to get around Crotty in the future is instead to make hundreds of 'small changes' in a staggered form as to avoid any citizen getting a vote? I knew there had to be a way around it!

Suspension of voting rights here we come!... Sometime to come....

Scofflaw

It's worth pointing out that Merkel is saying that a tougher sanctions regime is necessary to sell the idea of a permanent fund that extends beyond the current ad hoc "EMF" arrangements - which are due to come to end by 2013. Proposed Treaty changes wouldn't have an impact on the current ECB purchases of debt, since they're guaranteed not to happen in time - nor has Merkel proposed changes that would affect the 'no bailout' rule.

Nor does the Merkel-Sarkozy plan appear to have met with any support:

Brussels - The leaders of Germany and France failed to find support among fellow centre-right leaders for a call to freeze the voting rights of European Union states which break budget rules, sources at a summit in Brussels said Thursday.

Chancellor Angela Merkel and President Nicolas Sarkozy had urged the EU to change its founding treaties to allow for the suspension of voting rights of members which borrow too recklessly.

But at a meeting with other top centre-right politicians from across the EU immediately before the EU summit, there was 'no majority' in favour of such a plan, sources close to the talks told the German Press Agency dpa.

However, there was 'broad support' for a parallel Franco-German call for treaty change to create a permanent eurozone bailout system. The EU currently has one valued at 750 billion euros (1 trillion dollars), but it is due to expire in 2013.

and

German Chancellor Angela Merkel and French President Nicolas Sarkozy have ruffled feathers ahead of this week's EU summit by hashing out a deal on their plans for reforming the Stability Pact. The proposal to remove voting rights has met with fierce opposition across Europe -- the stage is set for open confrontation.

German Chancellor Angela Merkel has raised the stakes ahead of this week's European Union summit. She and French President Nicolas Sarkozy want countries that break the strict budget deficit rules to be punished by having their voting rights suspended. However, this would require a change to the Lisbon Treaty -- something that has met with fierce resistance within the 27-member bloc. The stage is set for confrontation this Thursday in Brussels and it is far from clear if Merkel and Sarkozy will prevail.

Despite all of the diplomatic efforts ahead of the two-day summit, the other EU leaders have not yet agreed to the plan presented by Berlin and Paris. Luxembourg Prime Minister Jean-Claude Juncker came out firmly against the Franco-German plan on Wednesday. He said that the EU already had a mechanism for withdrawing voting rights in another area: "That is the case, when a country violates human rights," Juncker told the German broadcaster ZDF. "Human rights violations and violations of budget rules are two very different things."

Personally, I'm with Junkcer in respect of the voting rights, although I'd agree with the Germans that sanctions ought to be automatic rather than subject to the political interference the French prefer. Admittedly, I can understand that the Germans tend to view economic policy as a fundamental issue (remembering Weimar, I suspect):

But [Merkel] argued that the Lisbon Treaty already contained such provisions for states that violate the EU's fundamental values and argued that "in my opinion a policy that endangers the euro, that endangers our economic and monetary union, goes against the fundamental values of the European Union."

The Commission has also come out against the idea:

It is still two hours before the summit, but it seems that one of Germany’s principal initiatives is already sinking badly: a drive to suspend EU voting rights from countries that violate budget rules.

Jose Manuel Barroso, the European commission president, broke his relative silence of recent days to condemn an idea championed by Angela Merkel, the German chancellor.

“If treaty change is to reduce the rights of member states on voting, I find it unacceptable and frankly speaking it is not realistic,” said Mr Barroso, who has thus far remained quiet on the key questions that will dominate this summit. “It is incompatible with the idea of limited treaty change and it will never be accepted by the unanimity of member states.”

Interestingly, the Finns have suggested that there's no need for Treaty changes to implement a permanent fund with built-in conditions, which might well be sufficient to reassure the German Parliament without any question of stripping states of their voting rights:

Multiple leaders at Thursday’s summit expressed their deep misgivings about engaging in another round of treaty changes, with several insisting that the German goal of setting up a new, permanent bail-out system could be achieved within the existing treaties.

If the idea gets any traction within the closed-door meetings, it could be due to an unexpected proposal from an unexpected place: Finland.

According to a so-called “non-paper” - diplo-speak for an unofficial proposal - that has been circulated by the Finnish finance ministry and obtained by the Financial Times, much of what German chancellor Angela Merkel wants through treaty change could be achieved by simply attaching new rules to national bond issuances.

Proposals for such “collective action clauses” are not new. They essentially make clear that a country’s debt could be restructured, and that bondholders would take a “haircut” loss in their holdings, as long as most bondholders agree to the changes. In essence, it would make it easier for countries to unwind their debts and force private investors, rather than national taxpayers, to foot a large portion of the bill.

Under the Finnish proposal, the current €440bn bail-out fund would dissolve once about half of all eurozone bonds included the clauses.

The Finns acknowledge that more E.U. coordination would be needed beyond the clauses, so that European authorities could coordinate debt restructuring. But even that, they argue, could be done through legal language in the bond clauses - and not through any new treaty language.

“The euro area needs a permanent crisis management mechanism in which the responsibility of an insolvency is borne by the creditors of the Member State in question and the Member State itself,” the Finnish paper reads. “Such a mechanism would create strong incentives to Member States to implement sound economic and fiscal policies.”

Interesting times.

cordially,
Scofflaw

digme

Your employer must be delighted with you.

Avgas

Scofflaw wrote: »

Proposed Treaty changes wouldn't have an impact on the current ECB purchases of debt, since they're guaranteed not to happen in time - nor has Merkel proposed changes that would affect the 'no bailout' rule."

But sorry, if the German Constitutional Court rule early next year that the current ad hoc fund is in breech of Article 125's guarantee as relevant for German constitutional law...then what happens....?

A permanent fund may or may not be useful for us in 2013 or 2014 but we will be needing a lot of money in the next few months.......

Any German verdict could send the markets into massive spasms....and leave us in perhaps quite a pickle...just when we may want to draw on the ad hoc fund...it may be cast in doubt somehow?

View

Avgas wrote: »

Scofflaw wrote: »

Proposed Treaty changes wouldn't have an impact on the current ECB purchases of debt, since they're guaranteed not to happen in time - nor has Merkel proposed changes that would affect the 'no bailout' rule."

But sorry, if the German Constitutional Court rule early next year that the current ad hoc fund is in breech of Article 125's guarantee as relevant for German constitutional law...then what happens....?

A permanent fund may or may not be useful for us in 2013 or 2014 but we will be needing a lot of money in the next few months.......

Any German verdict could send the markets into massive spasms....and leave us in perhaps quite a pickle...just when we may want to draw on the ad hoc fund...it may be cast in doubt somehow?

The ad hoc fund (i.e. the EFSF) isn't being run by the ECB and exists independently of it (If memory serves me, it is a Luxembourg based fund with the member states as shareholders). As such an adverse ruling in Karlsruhe on the EFSF probably wouldn't directly impact on the ECB.

Scofflaw

View wrote: »

The ad hoc fund (i.e. the EFSF) isn't being run by the ECB and exists independently of it (If memory serves me, it is a Luxembourg based fund with the member states as shareholders). As such an adverse ruling in Karlsruhe on the EFSF probably wouldn't directly impact on the ECB.

I think so - the German action would only affect Germany:

The German Parliament also approved legislation29 allowing Germany’s Federal Ministry of Finance to provide guarantees to the EFSF. Under the Act, guarantees are limited to €123 billion, but can be extended to €148 billion in the event that certain additional conditions are fulfilled.

A member of the German Bundestag has raised a claim before the Federal Constitutional Court on the ground that the legislation is in breach of Article 125 TFEU. The claimant argues that the Act has to be considered as an amendment of the European Treaties and could only enter into force if the necessary procedure for such amendments at the European level had been respected. Therefore, the claimant contends, the German Bundestag did not have the competence to approve the guarantees.

The case is pending before the German Constitutional Court and the Court has asked for opinions from the German Government and the ECB. It is expected that this complaint will be assessed more thoroughly than the first action (particularly because the level of the guarantees in the second action is much higher than in the first). It is also possible, however, that the claim will be declared inadmissible due to a lack of standing.

Essentially, then, if the complainants win their case, it would remove German guarantees from the fund - but the fund, as View says, isn't an EU fund as such - instead, it's an intergovernmental arrangement in the form of a limited company:

Member States have also pledged to make available an additional €440 billion through a so-called “European Financial Stabilisation Facility” (previously referred to as a “Special Purpose Vehicle”).16 The EFSF agreement was signed on 7 June 2010 following a meeting of Eurogroup ministers that was held on the same day. The Eurogroup President, Jean-Claude Juncker, and European Commissioner for Economic and Monetary Affairs, Olli Rehn, gave the following details at a press briefing:

• the EFSF’s Articles of Association and the Framework Agreement between Eurozone countries and the EFSF have been finalised;

• the EFSF was set up in the form of a limited liability company under Luxembourg law and will be run by a board of directors;

• the recruitment process for the CEO of the EFSF has begun and he/she will be nominated, along with the Chairman of the board, in the coming days;

• Luxembourg will be the first shareholder of the EFSF and will transfer the shares to the other Eurozone countries;

• the EFSF will become operational as soon as countries representing 90% of the facility’s shareholding have completed their national procedures (this is expected to occur over the course of June 2010); and

• the European Investment Bank will provide operational support for the EFSF on the basis of a legal service agreement.

Only Eurozone Member States will be required to participate in the EFSF. For Member States that do not use the Euro, participation will be optional. To date, non- Eurozone Member States Poland and Sweden have stated that they will contribute to the facility. Other non-Eurozone Member States, such as the UK, have indicated they will not participate.

Member State financing will involve guarantees, which include a 20% supplement to ensure that creditors can still be paid off if one or more countries run into financial problems and are unable to make good on their guarantees. According to currently available information, the system of guarantees will not be a collective one but a system of individual Member State guarantees.20 The IMF will participate in financing arrangements and is expected to provide at least half as much as the EU contribution through its usual facilities.

Source for both of those: http://www.herbertsmith.com/NR/rdonlyres/BA7C5FA2-BBB5-4B8D-9971-23AF97BBB678/0/8339Europeanfinancialstabilitymeasuresbriefing.pdf

So, while the German case could indeed have a big impact on the EFSF, it shouldn't have any direct impact on the ECB's purchase of our debt.

cordially,
Scofflaw

roy rodgers

Jesus there is a awful lot of waffle going on in here.

If lisbon3 comes to the Irish vote again its gonna be shut down and the end of Ireland in europe

FREEDOM!!!!

View

roy rodgers wrote: »

Jesus there is a awful lot of waffle going on in here.

If lisbon3 comes to the Irish vote again its gonna be shut down and the end of Ireland in europe

FREEDOM!!!!

I am pretty sure we get count on the Oireachtas to keep a level head when it comes to the Irish vote, so I wouldn't worry too much.

Happy Monday

Brian Cowen sweating over letting the Irish people vote again on Lisbon.
But will be in attendance at the GPO next Easter to talk of the rights of Irish people. Where do these people come from?

Hopefully, the Courts will order a re-run.
No democrat should fear that outcome.

Scofflaw

Happy Monday wrote: »

Brian Cowen sweating over letting the Irish people vote again on Lisbon.
But will be in attendance at the GPO next Easter to talk of the rights of Irish people. Where do these people come from?

Hopefully, the Courts will order a re-run.
No democrat should fear that outcome.

It's not a vote on Lisbon, for goodness' sake - it's a vote on whatever the proposed change to the Treaties may be. It will not involve reopening Lisbon - the title "Lisbon 3" is an ironic one.

Seriously, are people genuinely under the impression that we'd be voting on Lisbon again? Lisbon is finished, over, done - the changes Lisbon made to the Treaties have been made, they exist, they are now part of the Treaties. There is no such thing any more as the "Treaty of Lisbon" - it made changes to the TEU/TFEU treaties, and then it was done with.

If anything is actually proposed, it will not have anything to do with Lisbon, and any vote on it will have no impact on the Lisbon changes. It isn't, and cannot be, a "re-run".

Are we going to have to wade through this kind of ignorance if we do have a referendum? Is the No side going to be under the impression that we're somehow voting on Lisbon again?

Seriously - and I rarely say this - WTF?

quite boggled,
Scofflaw

Happy Monday

Scofflaw wrote: »

If anything is actually proposed, it will not have anything to do with Lisbon, and any vote on it will have no impact on the Lisbon changes. It isn't, and cannot be, a "re-run.

No - I accept that it will not be a re-run of the entire treaty.
But any vote at this time on any element of the Treaty will cause problems for this discredited government.
It is an amendment to the Treaty as implemented though Scofflaw.
Else the Germans would not need a constitutional amendment to enact it.

Scofflaw

Happy Monday wrote: »

No - I accept that it will not be a re-run of the entire treaty.
But any vote at this time on any element of the Treaty will cause problems for this discredited government.
It is an amendment to the Treaty as implemented though Scofflaw.
Else the Germans would not need a constitutional amendment to enact it.

I'm glad to hear that - yes, it will of course be an amendment to the Treaties as amended by Lisbon, just as Lisbon was an amendment of the Treaties as amended previously by Nice, Maastricht, Amsterdam, and the SEA.

Assuming that anything comes of it that requires a Treaty amendment, that is.

I have to say that the Irish Times article is extremely badly written, and manages to give the impression that we're somehow reopening Lisbon - sorry, not "give the impression", rather it simply says that:

THE DECISION of EU leaders to reopen the Lisbon Treaty to create a permanent rescue scheme for eurozone countries was adopted on the basis that the move would not lead to a referendum in Ireland or any other member state, The Irish Times has learned.

Journalism at its densest.

gloomily,
Scofflaw

Avgas

Well its is far from clear what has been really really agreed. The Financial Times article in Saturday 30th edition suggests at one stage that no change in the wording of Article 125 will be undertaken instead they will add in some sentence (s) in the part of the Treaty that deals with emergency aid provided by other member states......

It does seem like the idea of voting rights suspension is gone but who really ever believed that?

Moreover, it appears that the mandate to revise the Treaty should be limited enough to invoke the Article 48 procedure...but it is not clear what that will look like....how exactly can one claim that giving the EU the right to bail out states does not amount to a new competence...there could be subsequent litigation at the national levels.....

In previous posts I(we) may have confused somewhat two different things; one is purchases by the ECB of Irish debt (which nobody AFAIK has challenged legally but there are limits to how far that can go on) and the distinct European Solidarity Fund agreed last May. I am well aware it is not a formal EU body....but the effect of a possible German negative ruling would be to prohibit the addition of German equity...which would be the lion's share no? It may even necessitate an early return of 'German' taxpayers funds advanced to Greece following the same logic. It would be a huge blow to the simple fiscal sums of putting together a big bag of money to bail people out....I don't know if it would be fatal or not, but it would be a huge blow to a fund we would like to know is secure. That was my original point and the timing of the threat remains the same...early next year NOT 2013.