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.
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”.