Guest Post: People’s Movement – Demand a referendum to defeat another EU stitch-up


We should waken up to the fact that the country is threatened with yet another stitch-up, by courtesy of the Government and the Fianna Fáil opposition.

But this is different.

Unlike previous stitch-ups, such as the infamous blanket bank guarantee of September 2008 and the equally discredited EU-ECB-IMF “bail-out” of last November, there is a strong case for holding a referendum on this one.

The measure in question is for the establishment of a permanent European Stability Mechanism, to which Ireland will be committed to contribute some €11 billion.

To establish this body it is proposed to amend the Lisbon Treaty by inserting an addition to article 136 of the Treaty on the Functioning of the European Union, which reads:

The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safe-guard 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.

Article 136 provides for budget discipline among euro-zone members by qualified majority, the “co-ordination and surveillance of euro-zone members,” and the setting out of economic “guidelines.” It’s a budget “harmonisation” regime tailor-made to discipline indentured debtors like Ireland and the other smaller, peripheral EU countries.

The amendment is a trigger for the establishment of the European Stability Mechanism, which is to replace the European Financial Stability Facility, the EU-ECB-IMF mechanism, when it expires in mid-2013. It was through this fund that the loan was pushed on Ireland last November by the European Central Bank and the EU Commission, in conjunction with the International Monetary Fund.

The German Constitutional Court is to rule shortly on the legality of the temporary “bail-out” facility under the German Constitution. There is strong possibility that the ESM is also open to challenge under the existing EU treaties.

The Lisbon Treaty is a self-amending treaty.

Amendments can be made either by the “ordinary revision procedure” or by the “simplified procedure.” The latter procedure is used for the ESM.

EU bigwigs insist on using the simplified procedure to maintain the pretence that the amendment represents only a “limited” change to the treaty.

Judges in the Crotty case famously reminded us that the essential nature of sovereignty is the right to say Yes or to say No; also that it is not within the competence of a Government, or indeed of the Oireachtas, to free themselves from the restraints of the Constitution, or to transfer their powers to other bodies unless expressly empowered so to do by the Constitution.

So should there be a referendum?

The effect of the change would be to alter the scope and objectives of the EU in very fundamental ways. It involves a commitment for Ireland to pay €11 billion into fund.

By ratifying the Treaty establishing the ESM, Member States legally commit [themselves] to provide their contribution to the total subscribed capital.

(Term Sheet of ESM, Conclusions of European Council, Brussels, 24-25 March 2011.)

The ESM will be established by a treaty among the euro-area member-states as an inter-governmental organisation under public international law, and will be based in Luxembourg.

Article 122.2 of the treaties limits the provision of financial assistance to –

…where a Member State is in dificulties or is seriously threatened by natural disasters or exceptional occurrences beyond its control…

– and does not seem to permit the sort of conditional loan that was foisted on this country last November.

The temporary “bail-out” arrangement under Article 122.2 is under challenge as being un-constitutional in the German Constitutional Court.

The EU heads of state and heads of government agreed that a continuation of a legally dubious procedure would not be “appropriate”; but whether Article 136 would be any better is open to question.

Certainly the question should be examined by Irish courts.

The scope and objectives of the new arrangements are very much broader than arrangements for the Greek and Irish “bail-outs,” with an emphasis on “a permanent crisis mechanism to safeguard the financial stability of the euro area as a whole” and “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… dealing with such cases of risk to
the financial stability of the euro area as a whole…

– helping to “preserve the economic and financial stability of the Union itself.

Assistance provided to a euro area Member State will be based on a stringent programme of economic and fiscal adjustment and on a rigorous debt sustainability analysis conducted by the European Commission and the IMF, in liaison with the ECB.

(Terms Sheet of ESM, Brussels.)

In effect, a complete suspension of national sovereignty.

The post-2013 arrangements will allow for the restructuring of debt in certain circumstances, but the current dispensation forbids this. Is this not discriminatory against countries like Ireland and Greece?

What should you do?

  • This is an opportunity to fight back to reclaim our future.
  • Urge your friends, your TDs, your trade union to demand a referendum now.
PEOPLE’S NEWS, No. 46
News Digest of the People’s Movement
5/April 2011, www.people.ie
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This entry was posted in Accountability, Action Stations, Bankers' Bailout, Budget, Civil Rights & Liberties, ECB/IMF, Economy, EU, Euro / Sovereign Money, Independence/Nationalism, ireland and tagged , , , . Bookmark the permalink.

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