#EUREF: Souveraineté ou survie du déluge?

FitzJamesHorse was in Dublin yesterday. His description of the way the yes camp (by his lights, ‘the establishment’) for Referendum on the Fiscal Compact as a Hobson’s Choice”:

The legacy for European democracies is that their politcians have actually managed to restrict REAL CHOICE. In Ireland for example, no mainstream political party has been articulating the “No” case…it has fallen to Sinn Féin …..still somewhere between the margins and the mainstream……to rail against the notion of Austerity and loss of Sovreignty…..rather than to make a “reasonable” argument. The Irish Electorate are presented with a choice between Reason and Romance………Pragmatism and Gesture.

I’d disagree only to the extent that it applies to the government parties. In actual fact, this restriction of choice is an illusion. As pointed out here before, no one in Europe needs Ireland to signup to this treaty to make it work.

Ireland can reject the terms, and perhaps look for ‘a better deal’ on bank debt by September. It’s simply a matter of whether you think that’s a gamble worth taking. Or even that poor fiscal control is something that will help Ireland gain future traction in the bond markets.

Micheal Martin and Fianna Fail have had much more time to prepare to this referendum (in inverse proportion to the little time they spent preparing for Lisbon I)… And has he has repeatedly said, the reasons for Yes are much more limited than the government is claiming… That’s not even to say that the prospects for the success of it ultimate objects far from certain…

But it’s already clear that this is neither a common nor garden, nor even strictly speaking an EU problem; despite the fact that the Euro was very much part of the centralising agenda laid down by those at the heart of the pan European project.

As we saw in the case of David Cameron’s ‘veto’ it was less a veto, than a signal to the wider world, that he was getting his country involved in a situation in which the main protagonists were doing little other than watching their own backs.

Germany and France have continued to carry on their own sweet way. It’s notable too that Brussels has barely been involved in any of these matters. Tony Connolly, who is generally solidly fixed in Brussels has been flitting between Berlin, Paris and Athens. He may be seeing even more of Madrid and Rome before this is over.

For all Herr Schauble’s references to the democratic checks and balances of the Commission and the European Parliament the time has long since past when Irish journalists began to wonder what on earth those 12 Irish MEPs are doing over there right now.

David McWilliams’ prediction that the strain of holding north and south together will be too much for Germany is not unreasonable…

As Stephen Kinsella notes there are other pressure points (namely Spain) which could extend and upscale Ireland’s economic problems, not least by beginning to suggest that Ms Legarde’s umbrella is nowhere near big enough to damn back the markets

In other words, there is a process afoot that will be driven by sheer pragmatism, possibly even sheer terror… avant le deluge… and a drowning man’s instinct for survival…

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  • Alanbrooke

    The irony is that Irish can vote and be as “good” europeans as the commission wants, but the whole Euro project can still fall apart for reasons that have nothing to do with Ireland, leaving the country back where it was 4 years ago.

  • aquifer

    Ireland’s economy depends on being a Euro area base for multinational companies, so it may just have to be yes.

    Knowing that if it all falls apart it can still be a European base for these companies.

    Maybe even as part of a Sterling currency area!

    Or Sinn Fein can have us grow our own potatoes, or else.

  • Old Mortality

    The Republic is a very open economy, heavily dependent on exports, most of which are generated by multinationals. That is why fiscal stimulation makes little sense for Ireland — most of it woudl be dissipated on imports. Therefore, the treaty is no threat to Irish economic well-being whereas the risks from rejection are considerable, if only to the extent that it might call into question Ireland’s membership of the Eurozone, not to mention an escalacting cost of debt.

  • Drumlins Rock

    http://www.bbc.co.uk/news/business-18101338

    It seems like France might not even pass it! I think it won’t matter at the end of the day, treaty or not Germany pulls the strings, Ireland has to pass it for face saving if nothing else. SF know this as well as anyone, it suits them to oppose this time, but as they get drawn further into the real world such luxuries will become less common.

    Ireland has did well to date, but is still at risk if the dominoes fall, can it be by-pass with the focus on Spain & Italy now? time will tell.

  • Mick Fealty

    There is an important point of principle here, but no one who ‘supports’ it wants to come out and say what it is…

  • Old Mortality

    Mick
    ‘There is an important point of principle here, but no one who ‘supports’ it wants to come out and say what it is…’

    What is it, then?

  • Mick Fealty

    That you don’t want to go where the Eurozone is taking Ireland…

    http://www.bbc.co.uk/news/business-18088540

  • I think my reference to the “Establishment” was more nuanced than that
    “Politics is about CHOICE. And the key thing is that those people who we might call the Political “Establishment”………and here I might add the business community, financial experts, journalists……are asking the people of Ireland to vote “Yes”.

    I think its reasonable to say that they represent a POLITICAL Establishment. It is not necessarily by “my lights”…..merely a reasonable opinion that could be held by reasonable people.

  • Neville Bagnall

    Ronan Lyons has given us a decision tree:

    http://www.ronanlyons.com/2012/05/17/the-austerity-games-irelands-fiscal-treaty-referendum-redux/

    Not much to disagree with there from where I sit.

    I’m a big fan of Choice. And of Dissent. But sometimes, when all is said and done, the alternative on offer may simply not be credible.

  • Mick Fealty

    Thats worth pinning to the top. My only question is how easy is it to defenestrate once in the Constitution?

  • Neville Bagnall

    The people are Sovereign. We can change our constitution any time we want. With two caveats.

    First we’d have to elect a government that would pass a Referendum Bill to withdraw.

    Secondly, withdrawing from any international treaty (or any other contract for that matter) usually has consequences. Political/relational and possibly financial.

  • Neville Bagnall

    Oh, and by the way, it could even be legal to withdraw without another referendum. But IANAL.

  • Neville Bagnall

    The key to interpreting Article 29 of the Constitution I believe is the distinction between the words shall and may.

    That and Section 4, subsection 1°.

    The executive power of the State in or in connection with its external relations shall in accordance with Article 28 of this Constitution be exercised by or on the authority of the Government.

    Article 28 sets out the limits of the authority of the Government.

    But again, IANAL.

  • wee buns

    Mick – the treaty has seemingly benign financial consequences (because the commitment to economic program is already being adhered to) yet by its ratification there shall certainly be future political consequences for a whole host of economic decisions to be taken out of the hands of elected governments.

    So the principle is a democratic one.

  • Alias

    Ronan Lyons is spinning the line that national debt is the same thing as a derogation of sovereignty (it’s the first option in his chart). If this falsehood was true, there would, of course, be no need for a treaty to derogate the sovereignty. He starts from a false premise.

    Also, the Lisbon treaty was annexed to the Constitution with a clause that states that no provision of the Constitution takes precedence over the provisions of the treaty where they conflict. As the treaty sets out how Ireland can withdraw from the EU, that is the method that takes precedence. It is therefore wrong to claim that it can occur by any other method, since all such alternative and ad hoc methods would be unconstitutional.

    Incidentally, a similar provision it is also why the government is able to violate Article 6 of the Constitution without sanction from the Supreme Court in regard to bailing-out eurosystem banks – the Article is secondary to the conflicting provisions of the Maastricht treaty which require the state to act to promote the “common good” of the eurozone and not the Irish nation.

  • Neville Bagnall

    wee buns – The treaty does allow for “exceptional circumstances”

    “exceptional circumstances” refers to the case of an unusual event outside the control of the Contracting Party concerned which has a major impact on the financial position of the general government or to periods of severe economic downturn as set out in the revised Stability and Growth Pact, provided that the temporary deviation of the Contracting Party concerned does not endanger fiscal sustainability in the medium-term.

    But if it had been in place before 2008, as best I can tell, the main effects would have been:

    1) We’d have had to get the agreement of the other states that the collapse of the property market and resultant hole in our budget was an “exceptional circumstance”. As a result the Troika would have come in earlier.

    2) We wouldn’t have been able to extend the bank guarantee and recapitalise the banks without getting the agreement of the other states. As a result the Troika would have come in earlier.

    Other than that I’m hard pressed to see what we’d have done differently.

    The property bubble is what made any sort of debt financed stimulus unavailable to us.

    However, given that we are a small open peripheral economy, our deficit/surplus swings tend to be larger than for the bigger core states. (“When the UK/US/EU catches a cold, we get pneumonia”)

    Given that, if we are to live with the treaty long term we will have to develop automatic stabilisers (sovereign wealth fund, infrastructural and/or social investment banks) that can respond to the downturn without affecting the budgetary or debt status of the state.

    We need a regular flu jab. Doing that requires longer term thinking and higher taxes & investment than some might argue for.

    If we want to keep our economic sovereignty in future we have to plan out how to do it and develop a cross party consensus around it similar to that enjoyed by our corporation tax policy.

  • Neville Bagnall

    Alias:
    Ronan Lyons is spinning the line that national debt is the same thing as a derogation of sovereignty.

    It is. If I depend on an external actor, I’m not independent.

    It doesn’t matter whether its the EU or a bunch of bankers, if the state finds itself unable to carry on without financial support, its not economically sovereign. If borrowing is done because its the most cost effective way of investing, that’s one thing. If its done out of necessity that’s entirely different.

    Sovereignty has to be de facto as well as de jure.

    Re: withdrawal, I was referring to the Fiscal Treaty, not the EU. But yes, the Lisbon Treaty has an EU withdrawal procedure and as part of our Constitutional Law, that would be the obvious approach to take.

    However, our Constitutional Law is subservient to the People. The People are Sovereign, not the Constitution. If we voted in a referendum to modify the Constitution to make all EU law invalid (or subservient) within the state, it would be. No arguments.

    Its just that doing that would have consequences. The least of which would be that we would no longer be in the EU or the EEA. We can become de jure an icon of pristine Sovereignty whenever we want. But could we de facto back it up? It didn’t work out so well in the 30’s.

    Ireland has never proven able to fulfill the political promise encapusated in the name Sinn Féin. I’ve never understood why we’d want to try. Nationhood and Statehood, yes; Insular Nationalism, no.

  • Neville Bagnall

    To clarify: since the Fiscal Treaty is not an EU Treaty, it’s not part of the European acquis and withdrawal from it is not the same as withdrawal from the EU. Its importance to the Eurozone on the other hand…

  • Alias

    “It is. If I depend on an external actor, I’m not independent.”

    Misguided semantic games at best, and anti-democratic fraud at worst.

    Sovereignty is not derogated by borrowing. If it was, no state would be sovereign since all states borrow. Sovereignty is derogated ONLY when an applicable treaty has been ratified.

    Contrary to the nefarious claim, sovereignty has not been derogated; and if it were, there would be no need to ratify the treaty wherein it is derogated.

    The fraud has the purpose of leading the gullible to believe that it is a futile act to object to the surrender of sovereignty to the EU because the sovereignty has already been surrendered.

    “However, our Constitutional Law is subservient to the People. The People are Sovereign, not the Constitution. If we voted in a referendum to modify the Constitution to make all EU law invalid (or subservient) within the state, it would be. No arguments.”

    It’s not that simple. If the intent is to withdraw, you can’t just pass an amendment that removes reference to the treaty. The Constitution already specifies how withdrawal is to occur and that method takes precedence over all other provisions of the treaty (including the Article which declares the people to be sovereign – 6). That is for the Supreme Court to decide but I don’t see it. I recall asking Lord Norton (acknowledged as the UK’s greatest constitutional authority) on his blog whether Dicey’s doctrine meant that parliament could simply repeal the European Communities Act 1972 as the UK’s exit route and he said there is doubt about whether the courts would allow it: “You are quite right that the doctrine of parliamentary sovereignty is under challenge. It has been under challenge for some time from those who query Dicey’s interpretation of the doctrine and is now queried in respect of our membership of the EU. Though it still appears to be the case that most jurists accept that if Parliament repealed the European Communities Act 1972, the courts would enforce that, there are some who now challenge this assumption.”

    “We can become de jure an icon of pristine Sovereignty whenever we want.”

    In reality, only 27 of the world’s 193 states have derogated their sovereignty. The 27 that have now top the list of the world’s most indebted states (with over 40% of eurozone members verging on bankruptcy), whereas the other 166 states that glow in “pristine” sovereignty are, unlike their backward and retarded counterparts in the EU, doing rather nicely for themselves. The bizarre idea that there is no viable alternative to EU rule originates, unsurprisingly, in the EU’s propaganda department (which soaks up 2.3 billion of taxpayers’ money every year).

    “To clarify: since the Fiscal Treaty is not an EU Treaty, it’s not part of the European acquis and withdrawal from it is not the same as withdrawal from the EU. Its importance to the Eurozone on the other hand…”

    And to clarify your clarification: it will be incorporated into law within 5 years at the latest but will be enforceable by the ECJ and other institutions immediately in those provisions that expand upon provisions existing under Lisbon.