Patrick Kinsella on the Treaty

Wow. Someone advocating a no argument in the Irish Times? BoI must have upped the interest rates on its corporate overdrafts last week! Either that or Stephen Collins is gearing himself up for one last almighty frightener of a column come Monday.

And in case you think this post is offtopic, the continued support of Irish Media organisations for the treaty, the banks, and government policy is always the topic.

As to Kinsella’s arguments on the Labour party

On this issue, the Labour Party in Government has abandoned its traditional constituency, signing up to support the banks at the expense of equality, jobs and fair working conditions.

I guess he didn’t get the memo about the former Anglo Irish bankers on the Labour front-benches. Labour are the party of erudite political influence, nothing more.

“Those of us with no great wealth other than our education worry for our children: where will they work, how will they live?”

That should be the key question for all elder generations.
Europe has answered definitively with 50% youth unemployment rates in Greece and Spain being acceptable in order to retain, increase and concentrate wealth in the core of Europe.
The present younger generation will not be impressed with that answer.
But they have youth on their side, if nothing or nobody else.

It get worse…

“Speaking this morning, Mr Gilmore said insisted that Ireland does not have a contingency plan in place “There are always ‘what if’ scenarios that are worked through by people at a technical level. Ireland doesn’t have a contingency plan in relation to Greece leaving the euro,” he said.

Later, Minister for Finance Michael Noonan told Radio 1’s Today with Pat Kenny show that a working group that operates in support of EU finance ministers held a conference call on Monday.

Ireland, he said, was represented during the call by a senior civil servant from the Department of Finance.

While Greece was discussed during the call, Mr Noonan said “there was no instruction given to anybody to bring forward a contingency plan.”

Mickey is waiting for instructions….

Apologies I forgot to tag wisdom.

It’s a decent article,

“and all to protect the integrity of a banking system that failed in its primary duty of prudence in lending….

” In the meantime, those of us who think that on balance the European Union has been good for Ireland, and do not want to see that balance overturned, have compelling reasons to vote No to this treaty.”

The article doesn’t enter into the seemingly arcane topic(in Ireland) of shadow banking or the dynamics of global debt Finance or the global debt bubble or the undemocratic and totalitarian nature of the ESM Trojan Horse, but it does recognise the Faustian Pact with banking and financial services about to sacrifice European taxpayers on the altar of the ESM.

As for UTurn Gilmore, he’s lost the plot, vocabulary reduced to empty invocations re ‘investment’ or ‘stability’ dire warnings on the Titanic filled with veiled threat. Its difficult not to see him as a contradiction, a Labour Party spokesperson for the banking cartel, but one who people voted in to represent the democratic needs of taxpayers. For sure he’s NO Hollande.

To me there is a plan B, closing of the deficit by the end of next year.

Perhaps the sooner we get through it the sooner we will come out the other side?

As for Labour losing their support, that is hardly surprising. What is more surprising is that FG have not lost more support.

I can’t see FG or Labour winning from this term in Govt. FF are kaput, so that leave SF, I sense their day is “approaching”.

I think imports tell far more about what is going on in the Irish economy then exports.
Lets look at 2003 and imports as a % of total imports.

Food drink & Fags :
Y2003 : 6.2% of total . 2,952 million

Y2010 : 9.2% of total , 4,190 million

Oil
Y2003 :3.3% of total , 1,592 million
Y2010 :9.3% of total , 4,269 million

There is very little internal business activity that services or substitutes for internal domestic consumption…… this is a Euro phenomena.

Even just a paper issuance of Punts for internal payments only would stimulate domestic demand and business / infrastructure would grow that would cater for this new internal base money demand.

@Alchemist
Thats 23 and a half Youghal scale railways by my calculations (85m~)

An interesting article containing many points on which there would be general agreement, whether one was favourably inclined towards the TSCG or not.

But the conclusion one is forced to is that the author wishes to vote no not mainly because of what the treaty contains – which does not meet with his approval – but what it does not.

The idea that political parties in Germany, of whatever hue, are signing up to something that would end the social market economy in Germany is naive. The indications are that a deal will be agreed between the parties on the ESM next month. The SPD has also retreated from its support of eurobonds and is now toing the government line.

What will change the German approach is a decline in its own economy as the result of the downturn in the EU economy to which excessive German reliance on exports – engineered through a variety of measures, notably wage deflation – has largely contributed. This decline seems to be arriving earliar than anticipated.

http://www.bloomberg.com/news/2012-05-24/german-business-confidence-fell-in-may-on-greek-concern.html

Have been toying with the idea of voting yes as it is probably in my personal best interest but I am increasingly tilting to a NO for much the same reasons given by Patrick Kinsealla. I would like to leave a country for my children to work and live in and not some satrap governed sham state.
@Tull
Re SF, Pat Kenny was peddling the same line with Pearse Doherty on the radio this morning. He made the mistake of suggesting that SF had brought in water charges in NI only to have it explained to him that the opposite was the reality. Pat likes to be right, must have been a bit embarrassing for him and his producer.

@ DOCM,

i agree with you that ultimately the solution lies with countries themselves, whether it’s youth unemployment, policies for economic growth or badly needed political and administrative reform. Governments are far too inclined, particularly in Ireland, to use the EU as a figleaf; to suggest that the EU is ‘forcing’ a policy that they really don’t want, for domestic or party political reasons, to admit is both necessary and well advised inthe long term.

I’m acquainted with Patrick Kinsella, and his work both as a journalist and an educator of journalists, in which he is both courageous and innovative. In my opinion, he is second to none in those respects.

I’m also aware that he opposed the Lisbon Treaty. However, I find his arguments in this article against the FST as compelling as any pieces that have emanated from the ‘No ‘ side of the argument thus far. I think he is a very independent thinker – dear god, I wish we had more of those engaged in our political debates. He’s very far from some of the more ridiculous conspiracy theorists that seek to inform the ‘left’ side of the Treaty debate.

I’ve been following the debate on this site for several weeks, but not commenting because I hadn’t made up my own mind. I now have. I’m going to vote ‘no’.

It’s the government parties’ job to convince the likes of me to vote ‘Yes’. They have collectively, and singularly, made a poor job of it for reasons that I have set out elsewhere on another thread.

I happen to think that writing fiscal rules into national law is a particularly good idea in our political culture. However, it’s not enough.Because this Treaty is so fundamentally flawed, without a supporting package ratification is not a good idea at this time in my view. So I reluctantly – having campaigned in favour of every EU Treaty since 1973 – vote ‘No’ next Thursday. As I’ve said on another thread, come back to me in the autumn with a package, including eurobonds etc., and regardless of the warts and all, I’ll than happily vote ‘Yes’ to the FST.

@Tull

The NAMA plan is ridiculous and costly. The first you might live with it, since few independent wallets would fund it, the second is the problem since you and every other taxpayer will fund it.

There is no shortage of commercial and residential property within 50km of the Treasury Building. It is just another pre-election card shuffle to satisfy Estabishment Ireland. The silence of the givernment speaks volumes.

Maybe there aren’t buildings to the third decimal place in square metres for unique companies, whatever they are, but for the 99.9 percent, there is plenty of space.

Ask the IDA about occupancy.

The speech by Draghi. A quote:
“into an arrangement whereby national sovereignty on economic policy is replaced by the Community ruling”

does seem to indicate his view on what he believes needs to be done: Subsidiarity principle should not apply to economic policy (taxation and government spending?).

An observation on technocratic rule in Brussels:
http://www.euractiv.com/pa/pa-boss-power-brussels-shifting-bureaucratic-level-interview-493908

@Tom Healy

NERI has just released an information note on the Treaty

Very reasonable. My favourite quote.

“It is not obvious that having rules such as those contained in the Treaty would have averted the economic crisis which erupted and spread across much of Europe in 2007-201”

C’est drôle, n’est ce pas?

@ Dod,

You are a disgrace. Your racusm is appalling. how can we deal with serious issues from your perspective? I’m astonished that you, or appear to be,so extraorinarily ignorant of basic politics within the eurozone.

@Veronica

I’m shocked meself – truly shocked – me cosmopolitan gene is acting up no end and roightly shattered … but the empirics from Der Spiegel suggest that Angela’s rule has taken the ‘joy’ out of life throughout the euro-zone …. hence Blind Biddy’s suggestion of a RAVE in the Neu CB HQ (aka Shawnee’s Folly) in the IFSC – to coincide with the next EU Summit and Ireland’s leading Growth_Industry will supply a couple of ton of €eez with the smoked salmon … where Biddy will explain to Angela that the billions to build the folly came from Germany and that the bill has been passed on to the cousins of those emaciated bouncers on the door …. proper dress sense essential and all desiring entry must wear a Fiskal Korset and nothing else … I reckon the EZ crisis could be well sorted by 5.30 am with a decent restructing of vichy_financial system debt done and dusted before all adjourn to the Early Houses to drink Dublin dry in certainty and confidence. I’d say the Irish economy will go off like a rocket after such a RAVE ….

The final Banner—Vote No

No vote a first step towards growth

By Michael Taft

Friday, May 25, 2012 in The Neu Paper of Record

The kernels of the crisis, bank debt and growth, are not in the treaty, writes Michael Taft

THERE are two forces driving the European crisis. The first is the continuing instability in the European banking system. The second is the spectre of low growth and stagnation. The fiscal treaty has nothing to say about the banking crisis and it will make the low-growth crisis even worse.

That is why the fiscal treaty is bad for Ireland and bad for Europe.

The fundamental flaw of the treaty is that it badly misdiagnoses the European “disease”. It mistakenly assumes the crisis started with state debt. Instead, the crisis was started by the private debt of badly regulated and profligate financial institutions — a situation we know all too well here.

http://www.irishexaminer.com/analysis/no-vote-a-first-step-towards-growth-195087.html

+1

@ All

Another tour de force byJudge Feeney on Morning Ireland just now giving the facts with regard to both the TSCG and its link to the ESM.

I see that Taft and Kinsella are very much in agreement. Both their papers highlight the fact that the treaty does not address the causes of the financial crisis i.e. deal with the social, political and economic factors which got us into this mess and will continue whether we vote yes or no. I will vote NO until we get something which actually does what it should say on the tin. Indeed the ‘markets’ might take a very different view of the Euro and its constituent states and their borrowings if a coherent policy was adopted which actually addressed the real issues.

@ Tom Healy
I very much liked the NERI information note. Thank you for posting it.
It gives a very understandable account of the treaty. Most people I know have no idea what the treaty is about and it is difficult to explain. In future I will refer them to this document (link repeated here). http://www.nerinstitute.net/blog/2012/05/24/some-fact-about-the-fiscal-compact/
I would also recommend reading Dr Karin Devine’s presentation to the Oireachtas Committee on the treaty. She suggests that confusion/obfuscation is a deliberate tactic to prevent discussion of the real content of EU treaties.
http://debates.oireachtas.ie/EUJ/2012/02/23/00005.asp

Its already been mentioned IT has given limited voice to the No campaign. So the above article is welcomed, more balance is required. Speaking of balance, The Judge Feeney Propaganda Campaign is in full swing at the moment, but its been there for quite a while already:

http://www.refcom.ie/en/News-Media/Press-Releases/Referendum-Commission-launches-its-Public-Information-Campaign-on-the-referendum-on-the-Fiscal-Stability-Treaty.html

“Describing the Fiscal Stability Treaty, Judge Feeney said, “The Treaty is about strengthening the rules designed to make governments keep a balance between their income and their spending. There are already EU rules about this which apply to Ireland. The Treaty aims to strengthen these rules and requires countries to put some of them into national law.”

It’s on their website and on the airwaves supported with public money that supposedly was earmarked to be spent on objectivity and balance. Its not apparent from bombast and the oxymoron implicit in the above, but let me elaborate 🙂
Consider “The Treaty aims to strengthen these rules and requires countries to put some of them into national law”.

Who the heck objects to good housekeeping rules? The Orwellian Newspeak of deliberately ambiguous and contradictory language used to mislead and manipulate the public has its mind bending fulcrom in the word, ‘strengthen’.

You are not informed that the Irish Constitution will be weakened; that excessive and dangerous powers are proposed to be handed over to European bureaucrats and technocrats who will police Ireland’s debt with powers requiring a Referendum:

Just maybe AG Marie Whelan noticed the following in our constitution and saw the stranglehold of the treaty’s hands on 2.1:

2. 1° The sole and exclusive power of making laws for the State is hereby vested in the Oireachtas: no other legislative authority has power to make laws for the State.”

Its completely misleading not to point out to the public that proposed changes under the FC will make national law subservient to ECB/ESM law. It deliberately conceals this subservience as many readers assume, even with the insertion of the FC into the Irish Constitution, that the Irish Constitution will take precedence in our courts.

Such propaganda now extends to an attempt by some to promote the view that no changes to the Irish Constitution are contemplated at all deliberately misleading and conconcealing the reality external ESM/FC will now comply to external decision makers over which we have powers of debt peonage only; a system by which debtors are bound in servitude to their creditors until their debts are paid.

On goes the propaganda on TV/Radio and newspapers:

For example, http://www.irishexaminer.com/analysis/who-is-right-about-the-fiscal-treaty-194708.html”

“Let’s start with the new rules on the deficit. The legal basis for these have been present since the treaty on the functioning of the EU came into force in Mar 2010.

This was made possible by the Lisbon Treaty coming in to force on Dec 1, 2009.

Articles 121 and 126 do allow for surveillance of EU states that are in “excessive deficit” and ultimately allows fines to be imposed on them if they don’t reduce it. It also empowers the EU to demand that money be lodged with it by the non-compliant state. So the Government is right to assert that the legal basis for the present treaty rules on the deficit did already exist.”

Consider the phrase, “the legal basis for the present treaty rules on the deficit did already exist..”

Oh, why are we having a Referendum then ? Please don’t say, ” The Treaty aims to strengthen these rules and requires countries to put some of them into national law ”

I won’t frighten you more by telling you what those austerity rules are doing to this country; or, who and what rules will be applied, when cap in hand they look for Bailout 11.

Another Propaganda falsehood is Corporation Tax, the Y campaign refuse to discuss FTT (Financial Transaction Tax). Its as safe as a house apparently. We will retain our veto. I won’t right now delve into how safe our veto is, suffice it to say our veto re Corporation Tax is about as safe as a house on fire.

There is a strong move across Europe for a harmonisation of the tax base, http://www.ceps.eu/content/harmonising-corporate-tax-bases-europe

But here’s the deal. That’s not where CT is vulnerable. Where CT is highly vulnerable is already implicit in the rules governing our present bailout and any future bailout under ESM.

Its simple arithmetic. If there is no debt writedown under ELA/PN and none is proposed; if we are to meet our deficit reduction and debt repayment obligations under current and future FC/ESM rules, if taxpayers have no more to give, or if they come visiting Dáil Éireann like protestors on the way to Dracula’s Castle, or if they are peeved with our present incumbents like Romanians under Nicolae Ceaușescu, who similarly tried to pay off all foreign debt, then, we won’t be using the veto. We’ll be delighted to comply in order to save our scalps. We’ll insert another ECB/ESM/Troika suction tube into the IFSC and Corporation Tax along with the next round of cuts to budgets for health and education.

http://bit.ly/KfzeMZ

EnuForNow 🙂

@ MH

“Beyond the point scoring, the big picture remains; Ireland is still unreformed with a parish pump electorate ready to be ravaged by any passing snake oil salesman.”

Agreed. The tendency to take the soft option every time is noteworthy. The PDs were supposed to break the mould but they were no different .

I like this quote

“When I was a soldier I thought there was logic behind things. When I became a commander I understood that there isn’t really a logic. I understood that most of it was motivated by political reasons and if you have the forces, you find the action .”

http://www.haaretz.com/print-edition/features/we-were-supposed-to-enter-quietly-instead-we-threw-grenades-1.317038

MH is partly right as is normal. We are in this mess for complex reasons largely of our own making.
We joined the euro against best advice. Our fault
The euro project was not run competently – not our fault
We ran an irresponsible fiscal policy – totally our fault.
The bank guarantee- our fault on scope but as we see else where what we did was in line with ECB de facto policy.
We can fix the fiscal short comings. Perhaps the bank debt will be revisited but how do you get out of an inappropriate union. If you ask the Pope nicely even an annulment is possible.

@Spain Don’t Pay The Ferryman! Look at us …. and weep.

Shares in Spain’s fourth-biggest lender Bankia were suspended on the Madrid stock exchange today, ahead of an evening announcement when the bank is expected to ask the state for a rescue of more than €15 billion.

http://www.irishtimes.com/newspaper/breaking/2012/0525/breaking19.html

Multiply by 20 … at least.

“History is a record of effects, the vast majority of which nobody intended to produce.” Joseph Schumpeter

Big European funds dump euro assets

http://www.ft.com/intl/cms/s/0/92f5c37a-a5a1-11e1-a77b-00144feabdc0.html#axzz1vmC0HCCb

@David O’Donnell

“Defective Joy Gene”

The defective joy gene (aka the insufferable pri*k gene) was identified/isolated by the HR department at Manchester airport in 2009. It was then embedded into their recruitment profiles for security staff at the airport and all staffing there is now 100% compliant with it. I checked it out last week and it’s still working fine there. Blame the Brits.

Bankia is looking shot. Spain is sinking fast. The Euro’s heading back to parity with the $. Fund managers I speak to are getting out of various European investments rapidly – as also put up by the FT this morning. Lots of worms trying to get out of cans everywhere – especially kicked cans. The real run on banks is being deliberately under-reported. A co-ordinated QE and inflation is coming. Sell. Sell everything. Sell it now. Buy some land with a fresh water supply and get in a good stock of vegetable seeds.*

*Does not constitute investment advice.

A number of things I have heard in the media suggests the real debate should be about the ESM.

On The Late Debate:
– Paschal Donoghue TD FG (might have been another FG TD but think ) said that this referendum was also a referendum on the ESM treaty.
– Cormac Lucey said that the ESM could take away our fiscal sovereignty for good.
– Richard Boyd Barrett read out a part of the ESM bill which suggested that ESM is immune from democratic scrutiny.

On Vincent Browne last night:
– Constantin Gurgdiev, seamus Coffey and Caroline Simons all highlighted concerns aout ESM, and questioned if Enda Kenny or Lucinda Creighton even understand it.

I am quite concerned about ESM now. John O’Hagan said we need to listen to those we trust in his guest post. I trust Cormac Lucey.

@PR Guy
I thought you were a bit over the top, after reading this from a Bloomberg article I’m not so sure….time to panic?

“The ELA is a perfect life-support system, but it’s not a system for what happens after that,” said Lorcan Roche Kelly, chief Europe strategist at Trend Macrolytics LLC in Clare, Ireland. “What you need is a bank resolution mechanism, a method to get rid of a bank that’s insolvent. In Ireland, and perhaps in Greece as well, the problem is that you’ve got banking systems that are insolvent.”
For Citigroup chief economist Willem Buiter, there is a bigger issue at stake. ELA breaks a key rule that is designed to bind the monetary union together, he said.
“It constitutes a breach of the principle of one monetary, credit and liquidity policy on uniform terms and conditions for the whole euro system,” Buiter said. “The existence of ELA undermines the monetary union.”

And this article came out of Dublin.

Link to Bloomberg article on ELA
http://www.bloomberg.com/news/2012-05-24/frozen-europe-means-ecb-must-resort-to-ela-as-finance-lights-dim.html

@PR Guy
Great Cover. Article is interesting….why did it all go wrong…

“Why did it all go wrong? Three main reasons: French grandiosity, German shame, and a universal law of bureaucratic self-aggrandizement. Together these formed a European Union that was poorly adapted to the stresses the project was sure to encounter. The EU was perhaps unlucky that the crisis came when it did—before national loyalties had diminished and an emerging European identity had begun to take their place. Yet the EU’s designers had some sense of the risk they were running. They gambled and lost.”

@PR Guy

Below is the link to the elementart property valuation error that bankrupted Spain and Ireland;

http://www.independent.ie/opinion/letters/bubble-values-3034584.html

Professor Neil Crosby’s online response to this Irish Independent letter “Bubble values” 29th February 2012

“The analysis may be simplistic but unfortunately it is not flawed. Banks ask valuers to tell them what the market value/exchange price is at a point in time and then lend vast amounts over time based on that simple number. The surveyor gives them that simple number and do not think it is their job to tell the banks that the question they have been asked is stupid on its own and what they should have asked for is the underlying value. It was obvious in 2005 and 2006 that prices in the property market were higher than could be sustained by any rational cash flow analysis. But in a culture that rewards individuals for short term performance rather than longer term perspective, it was in neither the bankers’ nor the valuers’ interests to stop it. I cannot see anything in what the UK regulatory authorities have proposed that makes me think they understand the role of property valuation in driving asset bubbles and will prevent it all happening again sometime in the 2020s.”

Neil Crosby
Professor of Real Estate and Planning
University of Reading

@Dork

whats the upshot….should we be shorting Texas sweet?

I think if you look at the reign of the two Marios – to “Structurally adjust” Italy both in the 1990s and 2000s – it follows the same pattern.

To pay off the stock of debt which is sacred to these Goldman priests they simply subtract consumption.
Very little efforts are made to build less oil / gas senstive capital as it would impact on the stock of debts yield over the short to medium term.

In reality this only comes down to 2 things.
Nukes to save NG & rail to save liquid Diesel , Petrol.

en.wikipedia.org/wiki/Montalto_di_Castro_Nuclear_Power_Station

http://www.youtube.com/watch?v=7_wroR0x2QU

@John Corcoran

“But in a culture that rewards individuals for short term performance rather than longer term perspective, it was in neither the bankers’ nor the valuers’ interests to stop it.”

Bertie would have told ’em to go out and commit suicide.

We’ll probably all be past worrying about property bubbles if this malarky continues for much longer:

http://www.independent.ie/breaking-news/world-news/inspectors-probe-iran-uranium-find-3118965.html

If any of you are planning a trip to Iran check to see if there are any moonless nights during your stay. Israelie bombers like moonless nights.

@V Barrett

“whats the upshot….should we be shorting Texas sweet?”

Depends on when (or if) you think QE3 is coming. That would be a bear squeeze that’d bring tears to your eyes if you got caught in it.

@zhou

Some people are running onto the pitch….

Who thinks it’s all over?

@ Dork,

Indeed, with petrol in Italy at 1.91 & diesel at 1.81 e/lt why are we not surprised.

Laffer curve and all that.

@Alchemist

I think you might get a job writing SF proganda given your ability to cut and paste statements without the context…

So, Catalonia thinks if the banks can hold out their grubby little mitts then so can we.

Total refinancing needs of Spanish regions (Catalonia being the biggest at 13bn) is around 36bn. How far would 36bn get you in having to underpin your banks these days? Not very.

http://www.rte.ie/news/2012/0525/spains-catalonia-seeks-government-help-to-pay-deb.html

Martian: What is this ‘fiscal treaty’ thing that everyone is voting on next week

Peripheralist: Its these strict rules being forced on us by the Germans. We don’t like it, but they say if we don’t agree to it then we can’t borrow anymore money in order to continue to pay their banks back for making bad bets.

Martian: Oh, so the Germans have already ratified and signed up to this treaty themselves?

Peripheralist: No, in fact it looks like their own parliament is going to reject the treaty in its current form

Martian: But if you pass the treaty it becomes law in Ireland no?

Peripheralist: Yeah it does

Martian: But it will not be law in Germany?

Peripheralist: Yeah thats right too

Martian: And you would rather have a better treaty that includes clear commitments to growth?

Peripheralist: Yeah thats right too

Martian: So people will reject this treaty?

Peripheralist: No, they will accept it

Martian: Why would they do that?

Peripheralist: Because Dan O Brien and Lucinda Creighton told us it woudl be LUDICROUS not too

Martian: I’m confused at your strange ways

Peripheralist: You Martian’s are crazy….sure this is all completely rational – its the way things have always been!

@zhou_enlai

Thank you for your kind words. You can evaluate the detailed European Stability Mechanism proposals for yourself. The bill setting out Irish ratification is available here:

http://www.finance.gov.ie/documents/publications/eu%20legislation/2012/ESMbill.pdf

The critical clauses, IMO, are

Article 9 (2) “The Board of Directors may call in authorised unpaid capital by simple majority decision to restore the level of paid-in capital if the amount of the latter is reduced by the absorption of losses below the level established in Article 8(2), as may be amended by the Board of Governors following the procedure provided for in Article 10, and set an appropriate period of time for its payment by the ESM Members.” (Page 43)

And …

Article 10 (1) “The Board of Governors shall review regularly and at least every five years the maximum lending volume and the adequacy of the authorised capital stock of the ESM. It may decide to change the authorised capital stock and amend Article 8 and Annex II accordingly.” (Page 44)

And …

Article 35 (1) “In the interest of the ESM, the Chairperson of the Board of Governors, Governors, alternate Governors, Directors, alternate Directors, as well as the Managing Director and other staff members shall be immune from legal proceedings with respect to acts performed by them in their official capacity and shall enjoy inviolability in respect of their official papers and documents.” (Page 53)

In Summary
Article 9 (2) allows the ESM board to require states to pay authorised unpaid capital to cover losses. Article 10 (1) allows the ESM board to change the ESM’s authorised capital stock at ay time. And Article 35 (1) gives the ESM board immunity from any legal action.

Conclusions
These proposals do not amount to full fiscal union but they do amount to (a) full risk sharing and (b) a fundamental change in the nature of the EU from a situation where member states control the EU towards (N.B. not “to” but definitely “towards”) one where the EU controls member states. If these proposals are ratified, we will have a situation where an EU body can dip into our national exchequer as and when it judges appropriate. This is a major reason why I intend voting “No” next Thursday.

Cormac PW is 100% right.

How has the NO campaign missed this. I am somewhat ashamed of myself for not have taken time to read ESM….but of course that is not what we are voting on. Even so…

Interesting article ….understanding the German attitude.

http://www.nytimes.com/2012/05/26/world/europe/german-reunification-pains-inform-stance-on-greece.html?hpw

Are we all about to be German?
http://www.spiegel.de/international/europe/german-government-wants-to-create-special-economic-zones-in-europe-a-835224.html

@MH
“It’s hardly difficult to find clauses in any statute portfolio that could have the potential of giving dictators a power unintended by legislators.”

With the greatest of respect that is truly clutching at straws in terms of trying to dilute the import of what is contained in these clauses. I’d love to see Gilmore explaint that one on Six One…..”Brian I realise what the treaty says but don’t worry the power you talk about wasn’t intended to be granted by the legislators”….hmmm, wonder how the electorate would see that….

“To suggest that funds would be at risk of being stolen, is crazy.”

Depends on what your definition of stolen is – any rational person would regard the imposition of private creditor bailouts on the shoulders of irish taxpayers as theft….of course it has been legalised so probably doesn’t constitute “stolen” in the sense you intend.

I think it would be better that you merely come clean and say you personally are perfectly happy to invest the power outlined in treaty to a largely unaccountable (certainly from a democratic point of view) board of the ESM, because that is the best chance we have of getting out of this mess.

I think the Second Amendment argument does little to advance your case – if anything it completely undermines it and highlights the dangers of the clauses identifed by CL even more!

@ Cormac J. Lucey and V. Barrett

On reading the comment adverted to by M. Hennigan above earlier in the day, I was somehow reminded of the nursery rhyme of Old Mother Hubbard. The Irish exchequer is bare and the idea of others “dipping into it” is frankly laughable.

@ MH

“Outrage was scarce when the FF-PD regimes ran the economy into the ground.”

More like dissent was co-opted and/or crushed. Just because it wasn’t in the IT doesn’t mean it didn’t happen. Even in the IT Eddie Holt was drawing attention to things a long time before it all went a-ways .

Reinventing Ireland ed Kirby is worth a read.

@MH
Point taken. But one has a choice in how to proceed and ur prognosis is easier to administer from the comfort of the ex pat armchair – and that’s not a slight, been that soldier. Change can and does happen, catholic church for e.g. It happens slowly granted, but it grinds to a halt once everyone throws in the towel. A NO vote is a real opportunity to add some momentum to a vote for change in how things in Europe and Ireland work. What cormac has highlighted is the ESM treaty is leading us further down the path of divesting power to some Quasi judicial entity without accountability a la the IMF, one of the most reprehensible organizations of the 20th century.

What makes this treaty difficult to argue for, is that it talks of balanced budgets at a time when we desperately need stimulus. But looked at in a larger context, the euro needs eurobonds to have a chance of surviving, and in the slightly longer term the eurozone needs a common fiscal policy with a minister of finance in charge. Under both these ideas there will be fiscal transfers from the core to the periphery. There have been many hints and many commentators have made the point that Merkel cannot possibly even suggest eurobonds until she can reassure German voters that irresponsible governments in other european countries won’t use German money to avoid reform and proper governance. They have a point. They mightn’t have all the logic ontheir side, but this economic crisis must have a political solution. Politics means dealing with peoples concerns whether they are totally rational or not.
I will vote YES tot hte treaty, not because I think it is great economics, but because I think it is politically necessary – not in an Ireland context but in a european context. I wish we could sometimes see things more in that broader context. Part of the crisis in europe is that fewerand fewer people are inclined to think in terms of europe at all.
I rather think that europe will move rapidly towards deep integration – fiscal union, or break up with a threat of not just economic chaos but political chaos and civil strife not just in Greece but potentially in several others. The rise of extreme right parties across europe is extremely worrying. In europe we seem to have learnt nothing about economic crises from the 1930s, there is a risk that we have learnt nothing about political crises from the 1930s.

I hear the Spanish will be bringing out a new national anthem to celebrate ratifying the FC:

Sell !

Sell everything !

Sell it now !

We are toast !

Long live our bankers !

We are ‘in a difficult position’ !

(Venta! Venta de todo! Vender ahora! Somos una tostada quemada!! ¡Larga vida a nuestros banqueros. Somos fu*ked!!!)