The fiscal compact and referendum mechanisms in Ireland

This post was written by Aidan Kane

The Minister for Transport, Mr Varadkar, in commenting on whether a referendum will be necessary for Ireland to sign up to the fiscal compact is reported to have made the commonplace point that

There’s only one reason why you have a referendum and that’s where there is a requirement to change the constitution.

Em, not quite.

Apart from a political view that a referendum might be desirable in any event, there is a particular mechanism in the Constitution of Ireland for holding a referendum, even when a measure does not require constitutional amendment. This is set out in Articles 27 and 47, whereby one-third of the Dáil and a majority of the Seanad could petition the President to decline to sign and promulgate a Bill “on the ground that the Bill contains a proposal of such national importance that the will of the people thereon ought to be ascertained.”

The detailed provisions of Article 27 envisage that if such a petition were successful, the will of the people could be ascertained either by referendum (in which at least one-third of those on the register would have to vote “no” in order to veto, by virtue of Article 47) or, in effect, by a general election.

I guess the fiscal compact itself may not in fact be a Bill, but presumably the detailed fiscal provisions of the agreement will have at least that legal form. Apart from whether the required numbers of TDs and Senators would line-up for the petition which Article 27 envisages, whether or not this mechanism will be applicable seems to me, as a non-lawyer, to turn on whether the Bill in question is a “Money Bill”. Money Bills appear to me to exempt from Article 27 (reading back to Articles 23 and 22) but I may be mis-reading that, so perhaps we might get some legally informed views in comments.

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49 Responses to “The fiscal compact and referendum mechanisms in Ireland”

  1. Dave W Says:

    It’s irrelevant anyway. The government control the Senate. Even if 1/3 of the Dail voted against it, the Senate would simply block it down. Never going to happen.

    If the government do decide to press forward without a referendum (and considering the latest drafts, they may well), the Supreme Court would be the only possible block on it.

  2. DOCM Says:

    Until the text of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (the title according to the latest leaked draft) is finally agreed, it is difficult to see how there can be any meaningful discussion of what is required in terms of final ratification.

    The issue of whether or not a referendum will be necessary has become a political footbal. Such footballs require no logical context to allow them to be kicked around. It is in their very nature.

    It is instructive to note, however, that the debate in Ireland is well on its way towards beating the records of insularity and myopia revealed at the time of the Lisbon Treaty. It will be recalled that the treaty became necessary because the Constitutional Treaty was rejected by way of referendum in France and the Netherlands. Evey effort was , therefore, made to confine the Lisbon Treaty, as a follow-up to the failure of the Constitutional Treaty, to a tidying up and codification of existing treaty provisions, i.e. without the transfer of additional competences, to ensure that ratification by way of referendum would not be required in any Member State. Nobody in Ireland paid a blind bit of attention while all the other Member States proceeded to ratify the treaty in accordance with normal parliamentary procedures.

    It seems that we may well be on the way to repeating this performance in much less favourable circumstances and when the stakes could not be higher.

    P.S. The new title of the proposed treaty may be linked directly to Article 5.1 of the TFEU in the opening title dealing with the “Categories and Areas of Union Competence”.

  3. The Alchemist Says:

    A referendum on the Fiscal Compact would simply provide an opportunity for drum beating, shroud waving and keening on an epic but bogus scale. If the government had any sense it would take soundings from ISME, the IFA and others that are providing jobs and exports. I have excluded IBEC as it seems to have semi-permanent say in things.

  4. DOCM Says:

    I should correct my conclusion by saying that we may be beaten on this occasion by the UK. cf.

    http://www.fco.gov.uk/en/global-issues/european-union/eu-act/

  5. William Phelan Says:

    I will just repeat what I said in the previous Referendum thread (below) - the test that the Irish Supreme Court has applied to whether a referendum is required does not depend, as one view of Leo V’s statement would suggest, on whether the substance of the treaty commitment is required by the international agreement to be placed in the Irish Constitution. Even if the content were to be implemented by statute, a constitutional amendment (and thus referendum) may be required, per Crotty.

    http://www.irisheconomy.ie/index.php/2012/01/11/new-fiscal-compact-draft/

  6. Michael Hennigan - Finfacts Says:

    A referendum would provide a month of gas for the windbag industry.

    Deposits would flow from the banks as the main shouting matches would be on leaving the euro and defaulting.

    Viktor Orbán could be enlisted to give advice on the fun of reverting to our own currency.

    The one certainty is that none of the protagonists would have to fund a payroll in these times or have the foggiest notion what it’s like to stay afloat.

    I saw an interview this week with a guy from the Athens chamber of commerce. He was talking about the problem of foreign suppliers asking for cash in advance before shipping supplies.

  7. Paul Hunt Says:

    There can be little doubt that a majority of Irish voters absolutely relish any opportunity they get at the polling booths to express its judgement on the government or to impose some restraint. Indeed, they will demand opportunities outside of the normal cycle of local, European or Presidential elections. This does not mean that voters ignore the substantive issues on which they are voting, but, if they are so minded, a large number often seizes the opportunity to ’send a message to government’. Ireland is not unique in this respect, but it seems to happen more frequently than in other established democracies where voters rely on their members of parliament to exercise some restraint on government on a day-to-day basis. Irish voters seem to prefer to have their TDs as constituency advocates and mini-ombudspersons and to retain the right for themselves to impose some restraint on an overmighty government directly. This is a potent weapon - and voters, quite rightly, guard it jealously - but it is crude, inefficient and often ineffective - and may, on occasion, generate outcomes unintended by a majority of voters.

    So, irrespective of what form this ‘fiscal compact’ takes, or of the constitutionally appropriate means of ratifying it, I am reasonably confident that there will be a massive public clamour to hold a referendum which the Government will be unable to refuse.

    I have a sense that a majority of voters may not wish to derpive the government of its democratic legitimacy, but they would like to bloody its nose. And a majority would also like to convey to the EU’s Grand Panjandrums their anger at being forced to pay off the Anglo bondholders.

    It’s democracy, Jim, but not as we know it..not as we know it.

  8. Colm Brazel Says:

    Varadkar I heard on the radio this am, a government minister, who hasn’t even read the leaked proposals for fiscal harmonisation and opting in for ESM we’ve debated in a post here.

    Could someone wake him up, and give him a copy. So he won’t go on radio and make fool statements like, ‘ we cant debate the question if we don’t know what the question is ‘.

    Tags on this post should have puppet government, bailiff/bailout minister….

    So here’s the link to previous on this topic

    http://www.irisheconomy.ie/index.php/2012/01/11/new-fiscal-compact-draft/#comments

    RE the Fiscal Compact, I posted on it:

    “The Contracting Parties shall in particular put in place at national level, on the basis of principles agreed on a proposal from the European Commission, a correction mechanism to be triggered automatically in the event of significant deviations from the medium term objective or the adjustment path towards it, as specified in the revised Stability and Growth Pact. The mechanism shall include the obligation of the Contracting Parties to implement measures to correct the deviations over a defined period of time. It shall fully respect the responsibilities of national Parliaments”.

    I can see it being challenged in the High Court by any member of the public on grounds relating to the following:

    Article 1 The Irish nation hereby affirms its inalienable, indefeasible, and sovereign right to choose its own form of Government, to determine its relations with other nations, and to develop its life, political, economic and cultural, in accordance with its own genius and traditions.

    “article 2.1

    2. Institutions with executive powers and functions that are shared between those jurisdictions may be established by their respective responsible authorities for stated purposes and may exercise powers and functions in respect of all or any part of the island.

    Article 5 Ireland is a sovereign, independent, democratic state.

    Article 6 1. All powers of government, legislative, executive and judicial, derive, under God, from the people, whose right it is to designate the rulers of the State and, in final appeal, to decide all questions of national policy, according to the requirements of the common good.

    Article 10 1. All natural resources, including the air and all forms of potential energy, within the jurisdiction of the Parliament and Government established by this Constitution and all royalties and franchises within that jurisdiction belong to the State subject to all estates and interests therein for the time being lawfully vested in any person or body.

    Article 21 1. 1° Money Bills shall be initiated in Dáil Éireann only. 2° Every Money Bill passed by Dáil Éireann shall be sent to Seanad Éireann for its recommendations. 2. 1° Every Money Bill sent to Seanad Éireann for its recommendations shall, at the expiration of a period not longer than twenty-one days after it shall have been sent to Seanad Éireann, be returned to Dáil Éireann, which may accept or reject all or any of the recommendations of Seanad Éireann. 2° If such Money Bill is not returned by Seanad Éireann to Dáil Éireann within such twenty-one days or is CONSTITUTION OF IRELAND – BUNREACHT NA hÉIREANN returned within such twenty-one days with recommendations which Dáil Éireann does not accept, it shall be deemed to have been passed by both Houses at the expiration of the said twenty-one days.

    Article 26 This Article applies to any Bill passed or deemed to have been passed by both Houses of the Oireachtas other than a Money Bill, or a Bill expressed to be a Bill containing a proposal to amend the Constitution, or a Bill the time for the consideration of which by Seanad Éireann shall have been abridged under Article 24 of this Constitution. 1. 1° The President may, after consultation with the Council of State, refer any Bill to which this Article applies to the Supreme Court for a decision on the question as to whether such Bill or any specified provision or provisions of such Bill is or are repugnant to this Constitution or to any provision thereof. …….

    26.3

    3. 1° In every case in which the Supreme Court decides that any provision of a Bill the subject of a reference to the Supreme Court under this Article is repugnant to this Constitution or to any provision thereof, the President shall decline to sign such Bill.

    Article 27 This Article applies to any Bill, other than a Bill expressed to be a Bill containing a proposal for the amendment of this Constitution, which shall have been deemed, by virtue of Article 23 hereof, to have been passed by both Houses of the Oireachtas. 1. A majority of the members of Seanad Éireann and not less than one-third of the members of Dáil Éireann may by a joint petition addressed to the President by them under this Article request the President to decline to sign and promulgate as a law any Bill to which this article applies on the ground that the Bill contains a proposal of such national importance that the will of the people thereon ought to be ascertained.

    29.5

    5. 1° Every international agreement to which the State becomes a party shall be laid before Dáil Éireann. 2° The State shall not be bound by any international agreement involving a charge upon public funds unless the terms of the agreement shall have been approved by Dáil Éireann.”

    It should be apparent this government is even less familiar
    with the Irish Constitution than it is with the ‘Fiscal Compact’ proposals for ESM opt in.

  9. DOCM Says:

    @ Colm Brazil

    With God and the genius of the Irish people on your side, how can you go wrong!

  10. The Alchemist Says:

    @Paul H

    There can be little doubt that a majority of Irish voters absolutely relish any opportunity they get at the polling booths to express its judgement on the government or to impose some restraint.

    The economy won’t be helped off its knees by expressing a judgement on government performance, poor and shaky though it be in some areas. Banging the bin lids may create a lot of noise, music possibly in the ears of some, but the net effect is likely to be destructive.

    The credit situation in endebted countries is unlikely to improve in the short term. That will strangle a lot of trading companies. Italian banks are beginning to catch a chill, Unicredit being down with the ‘flu for some time. An Italian timber processor, good track record, we have a connection with had a six figure credit line granted in December, only to be withdrawn last week. The same in one shape or form has been happening in Ireland for three years now.

    Europe is in a long dip, though in Ireland the debate is conducted in such a semi-detached manner I wonder at times if the implications grasped. The days of boasting about being closer to Boston than Berlin need perhaps to be replaced with the likely emerging reality of closer to Botswana than Berlin.

  11. Paul Hunt Says:

    @Alchem,

    The alliteration may be enticing, but please don’t diss Botswana.

  12. The Alchemist Says:

    @Paul H

    It alliteration was serendipitous. My wife worked there in the early 80s.

  13. SJ Says:

    The legality (or indeed constitutionality) of any government bill is a matter for the courts.

    Whether the Government presses ahead without a referendum will hinge on whether the Attorney General thinks, in his expert legal opinion, that a constitutional challenge of the bill in the Supreme Court would be successful.

    It is entirely inevitable that such constitutionality would be tested by any or many of the interest groups, parties and activist individuals that abound in the state.

    No matter what the AG’s advice, it would be a risky strategy to agree to anything that could be considered a ‘transfer of competence’

    Cf:
    http://www.ucd.ie/law/news/name,103484,en.html

  14. Colm Brazel Says:

    @ DOCM

    “It seems that we may well be on the way to repeating this performance in much less favorable circumstances and when the stakes could not be higher.”

    So anybody who disagrees with DOCM, the genius (term used apropos suitable irony I guess) of the irish people, the people of France and the Netherlands, have all got myopia…

    ….I’m guessing its the other way round :-)

    I was pro Lisbon last time round. Given the shafting of this country with a drop dead horror bailout and subsequent fall out from EMU mismanagement stemming in large part from the ECB and the current mess made of the euro by the europhiles in government, I won’t be making that mistake again.

    @The Alchemist

    “The same in one shape or form has been happening in Ireland for three years now…”

    This is the killer blow to economic growth and makes comparisons with the eighties redundant.

    Many of these companies are hanging on by their finger nails if not liquidating. The eighties had not anything like the debt weight public and private currently stifling growth along with other aspects of our euro membership…we should leave before further damage is done.

    RE “likely emerging reality of closer to Botswana than Berlin.”

    Nope, we’ve a strong economic footprint with strong FDI and a fairly intact system of government and public services. If we leave now, I’m optimistic we can do a Finnish style turnaround. But only if we leave the euro and do a Greek writedown with our lenders.

    Uncool, myopic europhiles, their heads buzzing with new regulations based on further mismanagement and mess are only Greek sirens. Plug your ears. They are the ones who got us into the mess; they should be the last listened to on how to get out of it.

    Unfortunately, the rules of socialism for the banks dictate, in this country, the bankers and fools misled by them, still reign. In true capitalism, they would have gone a long time ago. So we got to endure Fiscal Compact rubbish in place of structured default; in the hopes that the bankers will get their money back and the FIRE economy of Europe can continue.

  15. Colm Brazel Says:

    @SJ

    “that a constitutional challenge of the bill in the Supreme Court would be successful.”

    Its not a matter of whether the challenge would be successful. I think you are confusing this with the role of the DPP who would assess in a criminal case if enough evidence and grounds were in a case to give it some chance of success.

    The AG, on the other hand, has a role to eg in Article 26, see below, also

    “or a Bill expressed to be a Bill containing a proposal to amend the Constitution,”

    What I understand would happen, correct me if I’m wrong, is the President could refer the bill to the supreme court, the supreme court would take the advice of the AG as to the constitutionality of the proposed bill; nothing to do with a basis of the bills success, or otherwise.

    Ahem, your interpretation is incorrect and flawed.

    http://www.attorneygeneral.ie/ac/ac.html#role

    Reference of Bills to the Supreme Court

    Article 26

    This Article applies to any Bill passed or deemed to have been passed by both Houses of the Oireachtas other than a Money Bill, or a Bill expressed to be a Bill containing a proposal to amend the Constitution, or a Bill the time for the consideration of which by Seanad Éireann shall have been abridged under Article 24 of this Constitution.

    1. 1° The President may, after consultation with the Council of State, refer any Bill to which this Article applies to the Supreme Court for a decision on the question as to whether such Bill or any specified provision or provisions of such Bill is or are repugnant to this Constitution or to any provision thereof.

    2° Every such reference shall be made not later than the seventh day after the date on which such Bill shall have been presented by the Taoiseach to the President for his signature.

    3° The President shall not sign any Bill the subject of a reference to the Supreme Court under this Article pending the pronouncement of the decision of the Court.

    2. 1° The Supreme Court consisting of not less than five judges shall consider every question referred to it by the President under this Article for a decision, and, having heard arguments by or on behalf of the Attorney General and by counsel assigned by the Court, shall pronounce its decision on such question in open court as soon as may be, and in any case not later than sixty days after the date of such reference.

    2° The decision of the majority of the judges of the Supreme Court shall, for the purposes of this Article, be the decision of the Court and shall be pronounced by such one of those judges as the Court shall direct, and no other opinion, whether assenting or dissenting, shall be pronounced nor shall the existence of any such other opinion be disclosed.

    3. 1° In every case in which the Supreme Court decides that any provision of a Bill the subject of a reference to the Supreme Court under this Article is repugnant to this Constitution or to any provision thereof, the President shall decline to sign such Bill.

    2° If, in the case of a Bill to which Article 27 of this Constitution applies, a petition has been addressed to the President under that Article, that Article shall be complied with.

    3° In every other case the President shall sign the Bill as soon as may be after the date on which the decision of the Supreme Court shall have been pronounced.

  16. Colm Brazel Says:

    Note I’m taking the view above that the AG does advise the government can go ahead with the bill and the government goes ahead with the bill; also, if the AG says not good idea, the government refuses the advice and goes ahead anyway.

    In simples, everything doesn’t necessarily stop with the AG saying ‘yes’ to going ahead with the bill.

    So, in one sense, his advice does not matter.

    If the government decide to go ahead with the bill, irrespective of the advice of the AG, it will be challenged in the high court.

  17. Bryan G Says:

    Finns don’t do subtlety. Here’s what the Finnish foreign minister thinks of it all:

    “The whole contract is at best unnecessary and at worst harmful, and Finland has reason to oppose the whole treaty and at least remain outside it.”

    One of the measures to be applied by the new treaty - a “structural deficit” of 0.5 percent of GDP - would be a “completely nonsensical straitjacket” that would only deepen recession and increase unemployment, he added.

    In his opinion, the whole agreement is a concession made to Germany so that the EU’s paymaster lets the European Central Bank intervene more forcefully to stem sovereign debt problems from spreading to more euro-countries.

    “We should not be taking orders from anybody,” Tuomioja said.

    This is not the view of the Finnish government as a whole, however at some point the loss of sovereignty that the treaty entails will reach a breaking point with the electorates of “well governed” countries, like Finland and the Netherlands, who will be asking why they should be taking orders from people that are obviously less competent than themselves.

  18. Tullmcadoo Says:

    God bless the Finns for calling a spade a (expletive deleted) shovel.

  19. SJ Says:

    Yes and no - you outline the procedure of the president referring the bill to the supreme court - if this is done and the bill is approved, the question of constitutionality is put to bed definitively.

    However I suspect that a president from one of the Government parties would be very unlikely to refer a bill to the supreme court. In that case, the Bill would be signed, become an Act of the Oireachtas and be in force until a ruling on foot of the inevitable challenge.

    The point I was making was that the AG - who sits at the cabinet table - will offer an opinion during the discussion of the bill while it is in the drafting stage, before it gets to the Oireachtas at all.

    It would be extraordinary indeed if the AG’s advice on constitutionality were to be ignored at that point.

  20. DOCM Says:

    @ William Phelan

    As a layman, I do not see the connection between this proposed treaty and the Crotty judgement. As an international treaty, there can be no doubt as to which article of the Constitution it falls under. Colm Brazil has kindly supplied the relevant text (with a lot of other texts the relevance of which must be in doubt).

    “5. 1° Every international agreement to which the State becomes a party shall be laid before Dáil Éireann. 2° The State shall not be bound by any international agreement involving a charge upon public funds unless the terms of the agreement shall have been approved by Dáil Éireann”.

    To the extent that there might be a problem, it should refer to any conflict between the obligations accepted by Ireland under the EU treaties and the new treaty. Were such a conflict to exist, it would be a problem for all participating countries.

    There seems little risk of this, especially having regard to the recent coming into force of the so-called six-pack of financial measures designed to strengthen the Stability and Growth Pact, notably the Regulation on the Excessive Deficit Procedure which is part of the law of the land since 23 November 2011.

    http://ec.europa.eu/europe2020/pdf/regulation_excessive_deficit.pdf

    The Secretary-General of the Commission during a recent address at the IIEA drew attention to the implications for Member States.

    The question may then be raised as to why all the fuss about the new treaty!

    It is, in my opinion, a statement of additional, very public, readily understood and undeniable, political commitment in the context of resolving the crisis of the euro (or, rather, to meet concerns in Germany where it is seen as a quid pro quo for more relevant action in other areas to actually come to grips with the real problems).

    It also has the sting in the tail that countries that do not sign up cannot benefit from the European Stability Mechanism which is, incidentally, also being established by way of international treaty (referendum, anyone!).

    P.S. As to why the UK blocked other avenues remains for me a bit of a mystery. The explanation may possibly be found in the manner in which the Conservatives have constrained the UK’s freedom of action (see link to FCO site above).

  21. SJ Says:

    Also, you say the supreme court would ‘take the advice of the AG’ - I would rephrase this and say that the supreme court would ‘hear the argument of the AG’ - important distinction!

  22. DOCM Says:

    @ Paul Hunt

    “Irish voters seem to prefer to have their TDs as constituency advocates and mini-ombudspersons and to retain the right for themselves to impose some restraint on an over mighty government directly”.

    You hit the nail on the head there! Your comment goes to the heart of the government’s political dilemma.

    Maybe Ireland could become a mini-Switzerland with each county - which draws the most loyalty - turned into a canton! Of course, it would only work if there was also a Swiss level of attention to who pays for what, rather than having the local government TD(s), or even better, Minister, coming home with extra goodies which a deluded electorate seemed hitherto to think were cost free.

    However, the times they are a’changing! Cf. excellent article by Marian Harkin in today’s IT.

    http://www.irishtimes.com/newspaper/opinion/2012/0118/1224310399562.html

  23. Eureka Says:

    Strategically better not to have referendum but need to consider what happens when the IMF goes broke.
    How’s it going to play out. Troika becomes duo of ECB and EC.
    Interesting to think about this. Britain will lend but only to save itself and not the Euro. What does that mean? Do we end up with a world of more bilateral loans? A world where the value of a currency depends on the quality of country it is lent to? So Sterling, by selective lending, could become surpass the Euro as a reserve currency. This is getting very interesting.

  24. DOCM Says:

    @ Bryan G.

    Finns do not do subtlety as you point out but they usually get their facts right.

    The 0.5% structural deficit rule is now part of the legislative armoury of the EU cf. page 18 of the relevant Regulation in the “six-pack”.

    http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2011:306:0012:0024:EN:PDF

  25. DOCM Says:

    @ Bryan G.

    Some more positive news from Finland (despite the True Finns).

    http://www.reuters.com/article/2012/01/18/us-eurozone-esm-idUSTRE80H17P20120118

  26. Colm Brazel Says:

    Anyone able to say whether the advice of the AG to government can be made available under ‘Freedom of Information’ at a later stage?

    In the matter of ‘take the advice of the AG’ - I would rephrase this and say that the supreme court would ‘hear the argument of the AG’

    Re rephrase, as its a more correct refinement of the former phrase, it does restate the phrase better. So, once again, the word of the AG does not reign supreme. The high court could choose to disagree with the advice.

    IT would be extraordinary if the AG did decide the Fiscal Compact did not require constitutional change to endorse it. But we live in extraordinary times.

  27. Finbar Lehane Says:

    I doubt that article 27 applies to international treaties. Article 27 is quite an appealing constitutional provision. Unfortunately, how the Seanad is structured ensures that it’s almost certain never to be used. Am not a lawyer, but to the best of my knowledge, the signing of international treaties is exclusively a power of government. If treaties place a demand on the public purse they’d also need Dáil approval (but presumably this would be in the form of a resolution rather than a bill). So I’d guess that article 27 wouldn’t apply.

    For an article 27 referendum on a bill to be called quite a few hurdles have to be jumped. The president, a third of TDs and a majority of Senators all have to be on board. Plus there could be a final court challenge to test if the bill really “contains a proposal of such national importance that the will of the people thereon ought to be ascertained”.

    One of the ways De Valera hobbled the Seanad in his 1937 constitution was its composition. The 11 Taoiseach’s nominees ensure an almost automatic government majority. Plus the constitutional rules on who gets to elect the 43 panel seats are very vague. Currently, this is set by legislation to be local councillors, TDs and Senators. There’s actually no reason this couldn’t be thrown open to the general public. But also, in the very unlikely event that the Seanad actually started putting up some long term resistance to the Dáil, then a government could very easily change the electors to be only incoming TDs (ensuring a Seanad composition almost perfectly mirroring the incoming Dáil, even before the 11 Taoiseach’s nominees are added).

    It would also seem that money bills might not come under article 27. But that’s perhaps not as big an obstacle as it would seem. Who decides what bills are money bills? Initially it’s the Ceann Comhairle who makes that call. In our system this position is in the gift of government (neither a secret ballot or a supermajority is required). But the Seanad does actually have the power to challenge the designation of a bill as a money bill. But this requires at least half of all Senators. Then, if the President is minded, he can form a Committee of Privileges, chaired by a supreme court judge, and composed of equal numbers of Senators and TDs. This is one of the President’s few powers where he doesn’t have to take government advice (he only consults with the council of state). So, I’d guess, the actual composition of the committee is ultimately up to him. Hence, as you can see, if the President and a majority of Senators were already on board for an article 27 referendum, then getting a bill designated as not being a money bill probably wouldn’t be too difficult. Of course, given the Seanad being the way it is, this is all most unlikely. Though, that said, from 1994-7, uniquely the Seanad was not government controlled. This occurred when Labour withdrew from the Rainbow Coalition and formed a new government with Fianna Fáil. On money bills, I’d actually be curious to know how many times such a Committee of Privileges has been formed to rule on a money bill. Wouldn’t be at all surprised if the answer was never.

    Article 27 will present an interesting conundrum for the government when they’re drawing up their Seanad abolition amendment. They could just decide to delete it. IMO that would be a real pity. It would be a useful provision in conjunction with a genuinely independent Seanad. But it would also be very usable if there was no Seanad at all. It would then be rather similar to a provision in the Danish constitution (section 42) where a third of MPs can ask the speaker/president of the parliament to put a bill to a binding referendum.

    Anyway, apologies for this long tangent on article 27. But it’s a topic that was also raised around the times that both the bank guarantee and NAMA bills were being enacted.

  28. Noneu Says:

    Well. David David power says just now on rte that the government have tendered for millions of ballot papers…so a referendum is on it seems.

  29. Colm Brazel Says:

    This is not a proposal for a money bill. This is a proposal to extend the jurisdiction of the EMU to oversee and control the very fabric of sovereign budgetary decision and freedom. This is an austerity decree that ensures austerity will be radically adhered to. It goes further and guarantees that e.g. the Troika recommendations for Ireland will be carried out to the letter. Its also a guarantee that bondholders or renegotiation of debt including restructuring of this debt will not be carried out.

    There is no provision for any restructuring of debt in this document. Budget deficits include the repayment provisions for banking debt and ELA. It gives nothing and gives away everything. Its a reassurance that Ireland’s squeals will not be listened to. It makes a mockery of our negotiating stance on government external debt.

    Article 3,4,5,8 I’ve objection to.

    See 4 here:

    When the ratio of their general government debt to gross domestic product exceeds the 60 % reference value mentioned under Article 1 of Protocol (No 12), the Contracting Parties shall reduce it at an average rate of one twentieth per year as a benchmark, as provided for in Article 2 of Regulation (EC) No. 1467/97 as amended by Regulation (EU) No. 1177/2011.

    http://www.openeurope.org.uk/research/100112fiscalpactdraft.pdf

    Its an economic missile of destruction for the Irish economy. Overall, its a very stupid document, as its a recipe to kill the goose that lays the golden egg.

    Are we not supposed to have a negotiating team in Europe? ITs impossible to see any fingerprint from any Irish input in these disastrous proposals.

  30. PR Guy Says:

    Today’s “growth” watch report (meaningless statements about growth by any European with frequent access to journalists):

    Jean-Claude Juncker - “I think there’s no alternative to an approach of budget consolidation, but attention also needs to be paid in Europe to a real policy of growth.”

    Mario Monti - “The UK and Italy both believe that adherence to fiscal consolidation is a necessary condition for growth.”

    José Manuel Durão Barroso - “it is important to use all the levers available to stimulate growth – structural reforms”

    Van Rumpuy - “fiscal consolidation in order to enhance economic growth and employment”

    I could go on but I’m losing the will to live.

  31. Colm Brazel Says:

    @ Finbar Lehane, Article 27, as you say, does not apply; its never ever been invoked, but its included for the sake of completion, to cover even the remote possibilities inherent in 27.

  32. Jesper Says:

    http://euobserver.com/19/114906

    “One expert has warned that if any euro-using country, such as Finland, does not sign the fiscal compact, it would see its borrowing costs soar and could ultimately be excluded from the single currency.

    “Even if this provision is not included it should become politically untenable for a non signatory of the inter-governmental agreement to stay in the euro,” Peter Sutherland, a former EU competition commissioner and the head of the European Policy Centre, a Brussels-based think tank said on Monday.”

    One the Fear Uncertainty Doubt strategy is used then it is almost certain that the ones using that strategy has a bad proposal.

  33. SJ Says:

    The AG’s advice to Government, as part of cabinet discussions, would be considered under the same rule as cabinet papers - I expect it would be 30 years before we saw it.

    Colm I think we are in accord about the role of the AG in this case.

  34. Bryan G Says:

    @DOCM

    Finns do not do subtlety as you point out but they usually get their facts right.

    The 0.5% structural deficit rule is now part of the legislative armoury of the EU cf. page 18 of the relevant Regulation in the “six-pack”.

    I believe our Finnish friend did get his facts right. The way I read the six-pack Regulation is that the 0.5% GDP measure refers not to a target structural deficit, but instead refers to the size of the annual *improvement* in the structural deficit that is required. For countries with gross government debt greater than 60% GDP, the annual improvement required to the structural deficit would be greater than 0.5% GDP. The medium term target deficit value (non-structural) remains 3% GDP.

    The Fiscal Compact treaty uses the 0.5% GDP value as a target deficit, and not as a measure of how quickly or slowly you are moving towards the target. This is because the Fiscal Compact treaty is modelled after the German Schuldenbremse, which Germany is now trying to enforce on everyone else. Mr. Tuomioja has valid grounds for his complaints, which happen to be shared by a wide range of commentators and organizations, ranging from S&P to the Bruegel Institute.

  35. Bryan G Says:

    @DOCM

    Following up on my previous comment, it looks like the six-pack specifies a structural deficit target of 1%. This is definitely different to the Fiscal Compact treaty target of 0.5%, though not by that much (or 100% greater, depending on your perspective).

    So it does appear that the six-pack mandates a measure that could be stricter than the 3% limit, which gets most of the airtime. So one question would be - what additional measures, if any, are needed for Ireland be compliant with the 1% cyclically adjusted limit?

  36. DOCM Says:

    @ Bryan G

    My point was that the Finnish FM implied that the idea was entirely new when his government has already signed up to it, or at least a version of it. Aligning the SCG Treaty with the amended SGP is, as I understand it, one of the remaining major bones of contention, the reference to “at market prices” being a difficulty (the reasons for which go beyond me).

    However, your comment explains for me what lies behind the dispute.

  37. Colm Brazel Says:

    http://www.openeurope.org.uk/research/100112fiscalpactdraft.pdf

    I think there’s a piece missing from my version of the draft. It should come after the following in the draft.

    TITLE VI GENERAL AND FINAL PROVISIONS Article 14

    Should there not be also:

    TITLE VII

    AMENDMENTS AND BURDEN SHARING

    1. This Treaty shall be ratified by the Contracting Parties in accordance with their respective legal requirements. It will include a burden sharing structured agreement between contracting parties, the ECB and government of Ireland. A sum of ¢34 bn through ELA and promissory repayment mechanisms will be set to null and void. Instead this debt will be collateralised through the EFSF and later through the ESM to ensure the citizens of Ireland are not held legally responsible for the debt of Anglo and associated banks.

    2. This Treaty shall further include clauses and amendments to be agreed as part of an overall restructuring agreement for Ireland’s debt based on ability to repay. These clauses and agreements on burden sharing will be put to the Irish people in a referendum; the support for these amendments and clauses requiring possible further burden sharing will include a decision to leave the euro currency if such conditionality is not accepted and such burden sharing losses are not to be freely accepted by all parties to the agreement.

    ——————

    Wonder why the above is not in your copy of the Fiscal Compact? :-) :-) Where’s Honahan , Cardiff et al…The Sleepers

    Do

  38. Colm Brazel Says:

    Meanwhile the Irish government are in some confusion regarding the Draft. Enda Kenny has flagged in the Dail that it is not his intention to do anything regarding sending the draft to the Attorney General, developing a position on a possible referendum, until he gets advice from the next meeting of EMU leaders at the next summit, end of January, Jan 30. This might explain Leo Varadkar stating that he could not discuss the question of the Fiscal Compact as it had not been finalised. It would appear Kenny and Varadkar are both in the dark on the matter; they intend to keep the country in the dark on this as well.

    So next meeting of the summiteers held to discuss the Fiscal Compact should be fun?

    Sarkozy: ‘Have you examined the Fiscal Compact, Mr Kenny?’

    Kenny: ‘No, I was waiting to get its final wording today from you and Angela?’

    Merkel: ‘You did not examine the proposed Draft and put it to the Irish Attorney General for his opinion?’

    Kenny: ‘No point, it isn’t the final wording.’

    Merkel: ‘The journalists did not release it in the media for general discussion and further advice”

    Kenny: ‘Now we don’t want to go upsetting people with referendums and complex decisions that even I can’t understand!’

    Kenny: ‘Just go ahead and add in any final changes there. I’ll rubber stamp them.’(Winks at Merkel, who is appalled)

    Sarkozy/Merkel in chorus:

    ‘Ooh la, la…….’

    Uncomfortable, embarrassed laughter ensues…

    ______________________________

    You know what, folks, I’m not laughing!

    End.

    I blog here http://wp.me/pBbF3-gB

  39. name required Says:

    DOCM Says:
    January 18th, 2012 at 4:42 pm
    @ Colm Brazil

    With God and the genius of the Irish people on your side, how can you go wrong! ”

    Without God or the genius of the Irish people there would not be an Irish Constitution…..

  40. Colm Brazel Says:

    @ name required

    Rather than have this debate hijacked by militants on the right/left, might be as good a time as any to take out the sections referring to God in the Constitution, in order not to offend any particular religion or group.

    Include a respectful clause respecting a multicultural society and the religious beliefs of different groups….
    but noting the multi ethnic and diverse differences in religious belief and cultural heritage practiced in our society.

    No problem with inserting a clause in the referendum to gauge the people’s wishes on this from me :-)

    But the above is a tangent to the matters to be dealt with in the disenfranchising terms of the Fiscal Compact.

  41. DOCM Says:

    @ Bryan G

    The German debt brake is not, it would seem, quite the exemplar that Berlin would like to suggest.

    http://www.spiegel.de/international/germany/0,1518,808268,00.html

    http://www.spiegel.de/international/europe/0,1518,803923,00.html

  42. Joe Noonan Says:

    http://www.telegraph.co.uk/finance/financialcrisis/9026142/The-EU-fiscal-draft-treaty-in-full.html

  43. DOCM Says:

    @ All

    The list of topics, rather short, that are still outstanding, again courtesy of the Telegraph.

    http://www.telegraph.co.uk/finance/financialcrisis/9026209/EU-fiscal-treaty-draft-key-issues.html

  44. Colm Brazel Says:

    @DOCM

    From your telegraph link:

    “the current draft gives the Court the authority to impose financial sanctions (not exceeding 0.1% of GDP) in case a Contracting Party was found by the Court not to have taken the necessary measures to comply with its judgement.”

    How can the above make sense in the case of debt restructuring for Greece? They’ve neither money to pay their debt never mind endure absurd financial sanctions.

    No solutions to the quandary of inability to pay down immoral, odious debt that is a deception then?

  45. DOCM Says:

    @ Colm Brazel

    I can only repeat what I said above.

    “It is, in my opinion, a statement of additional, very public, readily understood and undeniable, political commitment in the context of resolving the crisis of the euro (or, rather, to meet concerns in Germany where it is seen as a quid pro quo for more relevant action in other areas to actually come to grips with the real problems).

    It also has the sting in the tail that countries that do not sign up cannot benefit from the European Stability Mechanism which is, incidentally, also being established by way of international treaty (referendum, anyone!)”.

    Defined in these terms, the new treaty will be a “success”.

    I am also of the opinion that correcting the imbalances, especially between Germany and France (half the Euro Area), is the key consideration against which all else is so much window dressing. We have been here before! The problem was then corrected by revaluations of the Dm. This option is no longer available.

    Apart from the internal devaluation in France now required, the excessive internal devaluation in Germany has to be corrected. Both Sarkozy and Merkel continue to skirt around this issue. However, Merkel is clearly preparing to dump the FDP with another Grand Coalition with the SPD being the objective to avoid being dumped herself, as all other governments have been since the crisis opened. She is also trying to help Sarkozy back to power given the uncertainty associated with a new Socialist government almost certain to make the same mistakes as Mitterand made during his first years in power.

    The SPD is also preparing the ground to get rid of the albatross that Schroeder left hanging around its neck with the Hartz reforms of the labour market which have pushed a fifth of the workforce inro low-paid jobs cf. study by an Institute linked to the main trade union movement.

    http://www.boeckler.de/cps/rde/xchg/hbs/hs.xsl/38664_38677.htm

  46. DOCM Says:

    @ Colm Brazel

    FYI

    http://www.spiegel.de/international/germany/0,1518,809584,00.html

  47. Colm Brazel Says:

    @DOCM

    You show an admirable interest in the politics of France/Germany. You truly believe the efforts to rebalance
    disparites and impose future disciplines can achieve better outcomes.

    Not so, the project and global financial system are far too flawed at the present time to be satisfied and fixed by the small efforts of those trying to save the euro.

    I’m sure those beliefs are shared by europhiles supporting the euro project, who see it as an enhancement of integration and cooperation among states in Europe. But the euro has undermined such efforts.

    The real problem with the euro lie elsewhere. They lie in the global financial system. The euro itself in 1999 fed off the false belief that regulation could be left to the markets, to individual states to regulate themselves; that financial markets would always give vibrant support to the euro.

    Instead, the euro has shown itself to be profoundly vulnerable in a global downturn. My own efforts are to delve deeper on a very small scale into how currencies/monetary systems work.

    Political solutions and footwork such as those you describe are admirable in themselves; but they are insuffient to deal with a global debt problem currently extracting its pound of flesh from the euro…Unless the real challenges of burden sharing are addressed, to manage debt, to enable countries escape their debt burden…your guess is as good as mine :-)

  48. DOCM Says:

    @ Colm Brazel

    I take an abiding interest in Franco-German relations because that is where the action is.

    I am making the point that political solutions and footwork will not do the trick. As the departing Stark pointed out, major problems of structural imbalances both within and between euro countries cannot be resolved by monetary and fiscal measures. They can only be resolved by actions that impact directly on economies and which by their nature are politically unpopular.

    You would be in a minority in considering the problems affecting the euro as anything other than endogenous.

  49. Jesper Says:

    The Swedish parliament will not ratify the fiscal compact, the government lacks a parliamentary majority and all the other political parties have publicly said no. Although one party has said that if Sweden gets a permanent opt out of the Euro and is not bound by the fiscal compact then it can be voted through.

    I’ve read some of the pieces for signing the fiscal compact in Sweden and Finland. The spirit of the argument is: If we don’t sign it, others will stop thinking we’re cool. Similar argument to what parents get to hear from children wanting to do something.

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