German Constitutional Court: no "constitutional blank cheque for further aid packages"

German Constitutional Court rejects challenges against bail-outs

The German Constitutional Court has ruled against the claims that the euro-zone bail-outs are illegal.

However, the court stressed that the verdict “should not be misinterpreted as a constitutional blank cheque for further aid packages.”

The court also ruled that, in order to conform to the constitution, “the Federal Government is in principle obliged to always obtain prior approval by the [Bundestag] Budget Committee before giving guarantees.”

This means that the parliamentary budget committee will have to agree to any future bail-out packages or use of the EFSF, the euro zone’s bail-out fund. This is a big change from the present situation, where the German government needs only to reach a non-binding agreement with the budget committee over any bail-outs.

Additionally, the ruling seems likely to impose further restrictions on Eurobonds or debt mutualisation in the euro zone. The press release states that “the Bundestag, as the legislature, is also prohibited from establishing permanent mechanisms . . . which result in an assumption of liability for other states’ voluntary decisions, especially if they have consequences whose impact is difficult to calculate.”

This seems to suggest that any move towards Eurobonds would be unconstitutional, even with agreement from the Bundestag, though the ruling also hints at greater German control over the fiscal policies of other states that could circumvent such legal restrictions.

A comprehensive overview of the ruling may be found at
www.openeurope.org.uk/research/Karlsruhefactor.pdf

Greek government introduces household tax too

The Greek government has unveiled a fresh round of austerity measures, amounting to €2 billion, as pressure mounts on the country to deliver on its commitment to reduce its debt burden.

The minister for finance, Evángelos Venizélos, described the moves, which will involve a new two-year household tax and holding back a month’s pay from all elected officials, as a new “national effort.”

“We know that these measures are unbearable,” he said. “Our immediate priority is the full respect of the budget targets for 2011.” The European Commission, naturally, welcomed the announcement.

EU Commission demands even further austerity

EU countries under market pressures must be prepared to swallow even stronger doses of austerity.

Most states have slashed tens of billions from their public spending plans already, but this may not be enough, according to an annual report from the EU Commission on the state of public finances in member-states.

http://ec.europa.eu/economy_finance/publications/european_economy/2011/pdf/ee-2011-3_en.pdf

The head of the Commission’s economy department, Marco Buti, wrote in a gloomy “editorial” that, “despite the fact that a return of GDP growth, a gradual withdrawal of the temporary support measures and the start of consolidation is starting to reduce deficits, debt is still expected to continue increasing for the next year or so in most cases.

“Once it has reached its peak, the issue is not over. It will not be sufficient to stem the increase; rather, additional consolidation measures will be required to reduce it from its new level .” He argues that Europe’s ageing population will add still further pressures on public finances in the coming decades as a result of the higher costs of ageing and lower growth as a result of the smaller number of people of working age.

Despite multiple rounds of austerity already imposed, Greece for its part will see its debt burden climb to 166.1 per cent of GDP in 2012, up from 157.7 per cent this year, while our own may reach 104 per cent.

The document goes on to say that while governments can reduce debt levels through spending cuts or increasing taxes or a mixture of the two, they should embrace cuts in preference to tax increases, as “evidence from the past shows that cuts have greater success, in terms of the effect that they have on the overall public finances.”

The future in the EU does indeed look gloomy.

Hang our heads in shame and pay the German bondholders?

The EU commissioner for energy, Günther Oettinger of Germany, in an interview with the German tabloid Bild, suggested that the flags of countries with excessive deficits should fly at halfmast in front of EU buildings.

In his comments he referred to “deficit sinners,” who needed “unconventional” treatment to help them mend their ways— possibly through officials appointed by Brussels and imposed in recalcitrant capitals. “There has been the suggestion too of flying the flags of deficit sinners at half-mast in front of EU buildings. It would just be a symbol, but would still be a big deterrent.”

Would it? Really?

Another tactic for pulling a debt-stricken country out of crisis could be replacing “the obviously ineffective administrators” there, he said. Because Greek officials have failed at collecting outstanding taxes and selling state-owned assets as planned, Oettinger alleged, experts from other EU countries should be sent in to do their jobs instead.

Oettinger later denied suggesting that the flags of “deficit sinners” should fly at half-mast and said he was merely referring to a notion he heard in the office of a German tabloid. Asked how it had come about that Oettinger made such remarks, his spokeswoman said, “It just came out.”

But in a letter to the president of the Commission, José Manuel Barroso, 151 MEPs said that Oettinger’s comments “imply the symbolic humiliation of European nations. Mr Oettinger should retract and recant his words, or resign from the European Commission.”

The Government should come clean with the Irish public about the European Stability Mechanism Treaty

People's Movement welcomes call by elected representatives

The People’s Movement welcomes today’s wake up call in this morning’s Irish Times by twenty six Oireachtas members and one MEP warning about the implications of an commitment by the Government to a very significant diminution of the sovereignty of the State, hoping that it can sleep walk the country into it. We agree wholeheartedly with their demand that the issue must be put to the country in a referendum.

The Government should come clean with the Irish public about the European Stability Mechanism Treaty. Signing this Treaty last July Finance Minister Noonan committed 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 Fianna Fail Party should explain why it apparently supports the Government action and the amendment to the EU Treaties to permit the 17 Eurozone countries to set up a permanent bailout from 2013 to replace the current temporary bailout fund that was established in April last year for Greece and which has since been applied to Ireland and Portugal.

It is reasonable, given the state of our economy for people to know the full details of the cost and implications of this. Initially we will have to borrow €1.27 billion to pay into this fund and its proponents are happy that we should pay €11.1454 billion in the end.

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.

Background Information

This initiative seeks to warn the Irish public about some of the consequences that can arise from European Stability Mechanism (ESM) and the Treaty to establish it which the Government has already signed up to and which it proposes to ratify in the near future.

The ESM Treaty follows the decision of the 27 EU States to amend the EU Treaties by adding a new clause to Article 136 TFEU taken under the new, so-called "self-amending" Article 48.6 of the TEU that was inserted by the Treaty of Lisbon.

This Article 48.6 permits the European Council of EU Heads of State or Government to amend the main policy areas of the Treaties without calling an intergovernmental conference, so long as the amendment "does not increase the competences" of the EU.

The proposed amendment to Article 136 TFEU reads: "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."

The Treaty commits the State “irrevocably and unconditionally” to contribute vast sums to a permanent Eurozone Fund, the European Stability Mechanism (ESM), from 2013 without any guarantee that it will bring Ireland any benefit, and which could be used to put the Irish State under a regime of permanent austerity by “stabilisation” measures such as the Euro Plus Pact.

The post-ESM Treaty Monetary Union would be based on the possibility of significant financial resources being transferred from richer Member States to poorer ones through loans, financial guarantees, debt buy-backs, remission of interest rates and relaxation of loan maturity terms, interwoven with provisions for "strict conditionally" and supported by the structure of rules and policy enforcement mechanisms that are set out in the Euro Plus Pact currently before the European Parliament.

If the State were to receive ESM assistance, there are no limits set in the ESM Treaty to the “strict conditionality” provisions that may be attached. There is no reason that loans or grants or overdraft facilities should not have attaching to them such conditions as that an Irish Government will introduce a balanced budget constitutional amendment here or whatever Germany and France require of it in the interests of safeguarding "the stability of the euro area as a whole". 

Related Link: http://www.indymedia.ie/article/100585

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

Government plans to publish ESM bill, EU-IMF bill and household charges bill before the end of the year

The Government plans to publish a number of bills during the current Dáil session, including a number arising from the EU-IMF programme.

The Department of Finance will publish five bills in the coming months. The Fiscal Responsibility Bill will provide a statutory basis for a range of fiscal policy and expenditure management reform, while another bill will enable Ireland to ratify the treaty establishing the European Stability Mechanism. The European Financial Stability Facility (Amendment) Bill and Euro Area Loan Facility (Amendment) Bill will enable Ireland to ratify agreed amendments to the EFSF framework agreement and the Greek loan facility agreement, and will be introduced as soon as this week.

Among the other important bills to be published are two from the Department of the Environment. The Local Government (Charges) Bill will impose an annual household charge on owners of residential properties, while the Water Services (Amendment) Bill will establish a system for inspecting and monitoring the performance of septic tanks and other onsite waste-water treatment systems.

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

Important Conference - The EU in crisis: Prospects for regaining Ireland’s sovereignty. 7-8 October 2011

The EU in crisis
Prospects for regaining Ireland’s sovereignty.

Friday-Saturday 7-8 October 2011 in the Ireland Institute
27 Pearse Street Dublin 2


Friday 7 October 7.30pm
Was ‘Social Europe’ a con?

-- Speakers: David Begg, Gen Sec ICTU
Alex Gordon, Gen President RMT
Chair; Seamas Ratigan, Campaign for a Social Europe


Saturday 8 October 11.00am
Should Ireland stay in the Euro?

Speakers: Frank Keoghan, People’s Movement
Joe Higgins TD
Chair: Padraigh Mannion, PANA


Saturday 8 October 2.00pm
The EU’s emerging superstate

Speakers: Roger Cole, Chair of PANA
Declan Power, Security and Defence Journalist
Chair: Michael Youlton, Campaign for a Social Europe


Saturday 8 October 4.15pm
The struggle to regain Ireland’s sovereignty

Speakers: Alex White TD
Robert Ballagh, Peoples Movement
Aengus O’Snodaigh TD.
Chair; Mick O’Reilly, People’s Movement

Pat Cox for President?

Pat Cox is one of the elite steering group of the Spinelli Group.

They state as their aim; ‘We want to make a network of those who choose the European interest above their national interest, those who want to push the federal project in their respective environment".

Now we know why Cox wants to be President! Besides being a corporate pimp, he openly declares that he places EU interests before those of Ireland.

Do you think he’s a suitable person to be President of Ireland?

The reward for default; why don’t we just get on with it?

The credit default swap (CDS) for the Icelandic sovereign has now dropped to 200 points and has not been lower since months before the banking collapse in October 2008. The CDS has been in constant decline since January and indicates growing belief in Iceland’s economy.

Meanwhile, the CDS spread for Ireland is 683 basis points.

So it seems as if defaulting on debts run up by greedy bankers (German and French with the assistance of their Irish acolytes) and letting your currency depreciate works better — even from the point of view of investors — than socializing private-sector losses and sticking with a fixed exchange rate – the Euro?

Anybody for President but Pat Cox!

Pat Cox, an Irish MEP for fifteen years (1989 - 2004) and president of the European Parliament for two years (2002 -2004) has now set his sights on the Irish Presidency. 

It is well to remember some of Mr Cox’s connections and just to remind you of some of them, have a look at this old blog on Politics.ie; 

http://www.politics.ie/lisbon-treaty/102036-yesman-pat-cox-talks-transparency-practices-secrecy-3.html

Is this person suitable for the position of President of Ireland?

Anyone for a "Stop Pat Cox" Campaign?

What does it take?

Four short months ago Michael Noonan, called the IMF-EU deal “a downright obscenity”, now he tells us that “Europe has been very good to us . . . They’re actually treating us very well.”

The same Fine Gael that endlessly plugged five-point plan suggested that Ireland might have no choice but to “write down the value of the bonds in the Irish banks” now blithely informs us, via Noonan, that “that debate is over”, that ‘there is no stomach’ in Europe for burning the bond-holders.

And Joan Bruton and the Labour party are strangely quiet on the issue now that the ‘old guard’ of Labour have parked their rears in ministerial seats.

But, more ominously, the people are also very quiet as stealth tax follows stealth tax and the promised change from FG/Labour turns out to be a change for the worse. Do we get what we deserve in the end?