- National Platform EU Research & Information Centre – Two Steps to a Fiscal Union for the Eurozone… & A Third Step to Distract Attention from the First Two
- The 27-Member European Council “Decision” to make the Art.136 TFEU Amendment to the EU Treaties;
- The European Stability Mechanism (ESM) between the 17 Eurozone States;
- A Third Step that has distracted attention in Ireland from the First Two…
The “Fiscal Compact Treaty” (Treaty on Stability, Coordination & Governance in the Economic & Monetary Union)
- National Platform EU Research & Information Centre – “We Are Treated Like Mushrooms – Kept in the Dark and Fed Shit!”: Did you know…?
- Ireland could hold the Eurozone at our mercy regarding our national debt, the Anglo-Irish promissory notes and the terms of the Troika’s Memorandum of Understanding? This can be done by requiring a referendum instead of Oireachtas approval of the “Decision” of the EU 27 to amend Art.136 of the EU Treaties [this is not the referendum on the Fiscal Compact Treaty] so as to authorize the establishment of a permanent €500 billion fund for the Eurozone, the “European Stability Mechanism Fund”, to which Ireland must contribute €11 billion?
- … approval of this “Decision” [Art.136] is the only thing on which Ireland has the power of veto?
- the Government has invited submissions from the public on this Fiscal Compact Treaty… This will distract attention from the Government’s failure to insist that the amendment it has agreed to make to Art.136 of the EU treaties requires a referendum in Ireland because it makes a radical change to the scope, objectives and character of the Economic and Monetary Union which the Irish people agreed to sign up to under the Maastricht and Lisbon Treaties?
- … a motion to approve the “Decision” of the European Council to amend Art.136 of the EU Treaties
+ A motion to approve ratification of the European Stability Mechanism Treaty
+ A European Communities Amendment Bill to bring the provisions of the latter into Irish domestic law,
will all be put before the Oireachtas probably on Tuesday or Wednesday week?
- … by holding a referendum in Ireland on the Art.136 amendment to the EU treaties – without which the €500 billion ESM fund cannot be established – we could not only insist on our sovereign debt situation being transformed, but that a better solution to the whole Eurozone economic crisis could be adopted?
- Peoples’ Movement – The EU Permanent Austerity Treaty (Fiscal Compact Treaty): The Government seems determined to push ahead in the next few months with the ratification of two important treaties: the “Treaty on Stability, Coordination and Governance in the Economic and Monetary Union” [AKA Fiscal Compact Treaty] and the revised “Treaty on the European Stability Mechanism” (ESM).The two treaties would make member-states of the euro zone into regimes of economic austerity, involving deeper and deeper cuts in public expenditure, increases in indirect taxes, reductions in wages, a sustained liberalisation of markets, and the privatisation of public property.It would really be more accurate to call the first treaty the EU Permanent Austerity Treaty and the second the Conditional Support Treaty. Whatever they are called, the two treaties represent a seriously dangerous threat, and democrats should be mobilising to resist them.The cumulative effect of being bound by both treaties would be an obligation to insert a balanced-budget rule“through provisions of binding force and permanent character, preferably constitutional or otherwise guaranteed to be fully respected and adhered to throughout the national budgetary processes.”It would put Irish budgets under permanent and detailed supervision by the euro zone; make the existing subordination of Ireland’s interests to those of the “stability of the euro area as a whole” even more systematic and pronounced; impose conditions of “strict conditionality,” without limit, for ESM “solidarity” financial bail-outs; and require Ireland to contribute some €11 billion to the ESM fund when it is established later this year.
- Peoples’ Movement – Commentary on the EU Permanent Austerity Treaty (Fiscal Compact Treaty): the EU Permanent Austerity Treaty will make a permanent feature of that external interference in our economic governance that was so obnoxious when Fianna Fáil surrendered sovereignty to the European Central Bank and the International Monetary Fund. But if it’s bad in the short term—and it is—it’s even worse when it’s made permanent.The fact that the British and Czech governments are not going to ratify the treaty is clear evidence that an EU member-state can stay outside it and still remain within the European Union…
- Brian O’Reilly – 10 things you need to know about the Eurozone Austerity Treaty: On January 31st the Government signed up to a Eurozone austerity treaty. On Thursday 28th the Government announced its intention to hold a referendum on the Treaty.Here are 10 things you need to know about the new agreement.
- The reason we have this Treaty is because “core” EU member states, like Germany and France, want to impose stricter fiscal discipline on “peripheral” EU economies like Ireland, Portugal and Greece. The aim of the treaty is to strengthen the enforcement of existing rules and impose some new rules on government deficits, debt and budgetary policy.
- The Eurozone austerity treaty is not a European Union treaty. The British government refused to allow the treaty to become EU law. It now takes the form of a separate non-EU inter-governmental treaty. This means that it sits outside the scope of EU law though controversially it alters the way in which EU policy and institutions operate.
- Article 3 of the treaty is the most important. It states that governments budgets must be balanced or in surplus. The article makes significant changes to the existing EU treaty rules on fiscal policy known as the Stability and Growth Pact. Some of these changes were included in an EU legislative proposal agreed in November 2011 known as the “six-pack”. However by placing them in an inter-governmental treaty they are more binding and permanent. This means that if ratified future governments will have to implement pro-austerity anti-stimulus budgets in perpetuity. This significantly limits the freedom of decision making of governments in the future irrespective of the mandate they receive from the electorate.
- The key provisions of Article 3 include a new structural deficit target of 0.5%; a restatement of the existing Stability and Growth Pact deficit target of 3% and debt target of 60% of GDP; a requirement for states who breach these targets to return to them rapidly; and an option for breaching these targets in “exceptional circumstances”. Put in plain English this means that the ability of future government to borrow or run deficits at times of recession will be severely limited if not removed outright. It also means that the current Government will have to implement austerity budgets beyond 2015.
- Article 4 restates the existing Stability and Growth Pact requirement for states that breach the 60% debt ceiling to reduce the excess portion of that debt by 5% annually.
- The preamble to the treaty reminds us of the existing mechanism for enforcing the Stability and Growth Pact targets, known as the “excessive deficit procedure”. Article 5 of the treaty goes further and introduces new measures aimed at compelling member states in breach of the targets to take action deemed necessary by the Commission and Council. There is a new obligation to enter a “budgetary and economic partnership programme” involving detailed structural reforms aimed at reducing debt and deficit levels. This is essentially a Eurozone version of the Troika austerity programmes that member states will be legally obliged to accept when they breach the debt and deficit targets.
- Articles 7 and 8 make three more changes. The first is that the excessive deficit procedure becomes automatic requiring a majority of the European Council to block it. The second is that member states can now take each other to the European Court of Justice if they believe that the debt and deficit rules are not being respected. The third is that the European Court of Justice can fine an errant member state for not complying with the rules, a fine being up to but not exceeding 0.1% of a member states GDP, which in Ireland’s case would be approximately €155million based on 2011 GDP figures.
- Article 12 creates a new parallel governance structure for the Eurozone, based on the existing Eurozone summit meetings, but outside the framework of the existing Euro governance framework. This will apply to all Eurozone countries irrespective of whether they ratify the treaty or not.
- Article 16 states that the content of the austerity treaty will be incorporated into EU treaty law within five years of coming in to force.
- Finally the preamble of the treaty makes ratification a condition for accessing future EU bailout funds from the European Stability Mechanism. The treaty governing the ESM funds has also been amended. This means that if we say no to this treaty we could be excluded from applying for ESM funds in the future however it is unlikely that the European Council will enforce this rule as it would have serious implications for the member state concerned and the Eurozone as a whole.
- There are two key arguments against this treaty. The first is that it will impose greater levels of austerity on citizens for an indefinite period of time. One economist has estimated that it will require, at a minimum, a further €6bn of cuts and tax hikes post 2015. The second is that it significantly undermines the choices available to future governments to manage the state’s economic affairs and in doing so undermines our sovereignty.
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